AUGUSTINE LIBIN PEOUS V. DEPUTY COMMISSIONER

WP(C)/34273/2014

AI Insights

The case revolves around the income tax assessments and subsequent property attachments involving Augustine Libin Peous and his siblings, following a search and seizure operation under Section 132 of the Income Tax Act, 1961, at their father's residence. The Income Tax Department issued notices under Sections 153A and 153C, leading to protective assessments against the children and attachments on their properties. The petitioners challenged these attachments, arguing that the final assessment on their deceased father rendered the protective assessments and subsequent attachments invalid. The court's decision emphasized the principle that income cannot be taxed in the hands of multiple assessees for the same income, and any protective measures should not override the final assessments.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 732869 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 31-01-2017
• Assessment Year: misc
• Other Referred Cases: Lalji Haridas v. Income Tax Officer and another (1961) 43 ITR 387 SC
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: ARSHAD HIDAYATULLAH; P RAGHUNATH; PREMJIT NAGENDRAN
• Keywords: Assessment finalization; Attachment Order; Income Tax; Legal heirs; Protective assessment
• Section: 132; 153A; 153C; 159

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN TUESDAY, THE 31ST DAY OF JANUARY 2017/11TH MAGHA, 1938 WP(C).No. 34273 of 2014 (H) ---------------------------- PETITIONER: ----------- AUGUSTINE LIBIN PEOUS, ROSE VILLA, PUTHANPURAYIL, THAMARASSERY, KOZHIKODE. BY SRI.ARSHAD HIDAYATULLAH (SENIOR ADVOCATE) ADVS.SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENT(S): -------------- 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, KOZHIKODE- 673 001. 2. THE COMMISSIONER OF INCOME TAX (CENTRAL), KOCHI - 682 015. 3. TAX RECOVERY OFFICER, KOZHIKODE - 673 001. BY SRI.P.K.R.MENON, SR.COUNSEL SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31-01-2017 ALONG WITH WPC.34287/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: mbr/ WP(C).No. 34273 of 2014 (H) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS: EXHIBIT-P1- COPY OF THE ORDER DATED 27/03/2014 U/S 153A R/W SEC. 153C FOR 2006-07 IN THE CASE OF PETITIONER. EXHIBIT-P2- COPY OF THE ORDER DATED 27/03/2014 U/S 153A R/W SEC. 153C FOR 2007-08 IN THE CASE OF PETITIONER. EXHIBIT-P3- COPY OF THE ORDER DATED 27/03/2014 U/S 153A R/W SEC. 153C FOR 2008-09 IN THE CASE OF PETITIONER. EXHIBIT-P4- COPY OF THE ORDER DATED 27/03/2014 U/S 153A R/W SEC. 153C FOR 2009-10 IN THE CASE OF PETITIONER. EXHIBIT-P5- COPY OF THE ORDER DATED 27/03/2014 U/S 153A R/W SEC. 153C FOR 2010-11 IN THE CASE OF PETITIONER. EXHIBIT-P6- COPY OF THE ORDER DATED 27/03/2014 U/S 153A R/W SEC. 153C FOR 2011-12 IN THE CASE OF PETITIONER. EXHIBIT-P7- ANALYSIS OF ADDITIONS MADE IN HANDS OF PETITIONER/AUGUSTINE LIBIN PEOUS/LATE P.A.PEOUS. EXHIBIT-P8- PHOTOCOPY OF THE ORDER DATED 06/01/2014 IN W.P(C) 30206/2013. EXHIBIT-P9- COPY OF THE LETTER FORWARDING BANK GUARANTEE AND BOND. EXHIBIT-P10- PROCEEDINGS OF SECOND RESPONDENT DATED 24/03/2014. EXHIBIT-P11- REPLY SUBMITTED TO THE 3RD RESPONDENT DATED 15/06/2014. EXHIBIT-P12- ATTACHMENT ORDER DATED 13/11/2014. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE mbr/ K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P(C) Nos.34273 of 2014-H & 34287 of 2014-I - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 31st day of January, 2017 J U D G M E N T The petitioners are aggrieved with the attachments made against the properties of the petitioners, who are the children of the assessee in default. A search was conducted under Section 132 of the Income Tax Act, 1961 in the residential premises of the father of the petitioners based on which notices were issued under Section 153A and 153C on the father and the children respectively. While proceeding with the assessment against the father, protective assessments were passed against the children, based on which Ext.P2 attachments were made against the two properties belonging to the children. WPC.No.34273/2014 : 2 : 2. The measure of protective assessment not being sanctioned by statute, has all the same been held to be legally permissible; in so far as proceeding against more than one assessee for assessment of the very same income, so as to save limitation with respect to one or other, if the assessee proceeded against originally is absolved of the liability to tax of such amounts as income at his/her hands. However as has been held by the Hon'ble Supreme Court in (1961) 43 ITR 387 SC (Lalji Haridas v. Income Tax Officer and another), once it is finally assessed in the hands of one, then there could be no assessment made on another, of the same income. The attachments issued based on the protective assessments made against the children were challenged before this WPC.No.34273/2014 : 3 : Court in the above two writ petitions. Subsequently the assessment against the father has been finalised and in such circumstances, the attachment made on the basis of the protective assessment would not survive provided, the other assessment order has become final; is the contention taken by the petitioners.The petitioners also contend that though an appeal was filed against the final assessment on the father, the same was defective for reason of the admitted tax having not been paid and hence the assessment is now final. 3. I have heard the learned Senior Counsel Sri Arshad Hidayathulla on behalf of the petitioners and Sri. Jose Joseph Standing Counsel (Taxes) Government of India. WPC.No.34273/2014 : 4 : 4. The learned Standing Counsel appearing for the Revenue, would submit that, according to his instructions, the appeals are still pending, though defective. However, the petitioners categorically stated that the admitted tax has not been paid and hence there is no question of pendency of the appeal and they do not indent to pursue the appeals at all. The father is since deceased, admittedly. 5. The properties were admittedly acquired by the father in the name of the two minor children, who did not have any independent income at the time of such acquisition. It is also submitted by the learned Standing Counsel that a separate attachment order has been issued as against the properties, on the demand made against the WPC.No.34273/2014 : 5 : assessee in default; i.e, the deceased father of the petitioners; under Section 159 to recover the liability from the legal heirs. The petitioners however, contend that no such attachment order has been served on them and the recovery could only be from the estate of the deceased. However that will have to be separately agitated by the petitioners. 6. Especially noticing the fact that the Revenue has a case that there are fresh orders of attachment issued against the properties based on the finalisation of the demand against the father; there is no reason why the Revenue should be allowed to proceed against the properties on the basis of the attachments which are impugned herein. Further it has come out on the hearing WPC.No.34273/2014 : 6 : of the writ petition that the petitioners, the legal heirs of the assessee in default do not intend to pursue the appeal as against the final assessment made on the deceased father. In such circumstances, the protective assessments- Exts.P1 to P6 also would not survive as has been held by the Hon'ble Supreme Court in Lalji Haridas. Ext.P12 produced in both the writ petitions are hence set aside, leaving open the remedy of the Department to proceed against the properties in accordance with law based on the attachment said to have been subsequently made. 7. In the context of the submission made by the learned Senior Counsel appearing for the petitioners that no notice of the subsequent attachment, has been served on the petitioners, the Department is directed to serve a WPC.No.34273/2014 : 7 : copy of the order of attachment on the petitioners; subject however to any earlier service effected; which could be urged by the Department as against a challenge made by the petitioners; on the question of limitation if any prescribed under law. Leaving all such contentions of both parties open, for or against the subsequent attachment made, writ petition would stand allowed. No costs. Sd/- (K. VINOD CHANDRAN, JUDGE) jma //true copy// P.A to Judge "