M/s Sujeet Builders India Private Limited V. The Union of India through the Commissioner, Income Tax, Muzaffarpur and Deputy Commissioner, Income Tax Circle 1 at Bela Kothi and Assistant Commissioner, Income Tax Circle 1, At Bela Kothi and Income Tax Officer, Ward Motihari

CWJC/17494/2014

AI Insights

The case involves M/s Sujeet Builders India Private Limited, which faced demands from the Income Tax Department for the assessment years 2010-11 and 2011-12. The petitioner argued that the Department's failure to expedite the appeal process for the 2010-11 assessment and the rectification application for the 2011-12 assessment, coupled with the enforcement of demands, was unfair and unjust. The court referenced a precedent to highlight that the Department cannot benefit from its own default and must uphold the legal rights of the assessee.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 701260 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 15-10-2014
• Assessment Year: misc
• Other Referred Cases: All India Groundnut Syndicate Ltd. V. Commr. Of Income Tax, Bombay city reported in A.I.R. 1954 BOMBAY 232
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: RISHI SINGH; ARCHANA PRASAD
• Assessee Lawyers: NAND SINGH
• Keywords: Assessment Year; Demand; Error apparent; Income Tax; Interim relief; Interlocutory Application; Rectification; Refund; Statutory Duty
• Section: 154

Judgement Text

"IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.17494 of 2014 ====================================================== M/s Sujeet Builders India Private Limited having office at Belbanwa, P.O.- Motihari,P.S.-Motihari Town, District- East Champaran through its one of Director Sri Subodh Sharma .... .... Petitioner Versus 1. The Union of India through the Commissioner, Income Tax, Muzaffarpur, P.O. District- Muzaffarpur 2. Deputy Commissioner, Income Tax Circle 1 at Bela Kothi, P.O.- District- Muzaffarpur (the then assessing officer) 3. Assistant Commissioner, Income Tax Circle 1, At Bela Kothi, P.O. District-Muzaffarpur 4. Income Tax Officer, Ward Motihari, P.O. District- Motihari .... .... Respondents ====================================================== Appearance : For the Petitioner/s :Mr. Nand Kishore Singh, Advocate For the Respondent/s :Mr. Rishi Raj Singh, Sr. SC Mr. Archana Prasad, Jr. SC ====================================================== CORAM: HONOURABLE MR. JUSTICE NAVANITI PRASAD SINGH and HONOURABLE MR. JUSTICE JITENDRA MOHAN SHARMA ORAL ORDER (Per: HONOURABLE MR. JUSTICE NAVANITI PRASAD SINGH) 2 15-10-2014 Interlocutory Application No. 7653 of 2014 has been filed for interim relief. Income Tax Department (hereinafter referred to as the Department) is represented and has been heard. Instead of deciding the question of interim relief, in our view, writ petition can be disposed of as such. Having heard learned counsel for the petitioner and learned counsel for the Department at length, we dispose of this writ petition upon following facts in the following terms. In the assessment year 2010-11 assessment having been framed, a demand was raised against the Patna High Court CWJC No.17494 of 2014 (2) dt.15-10-2014 2 petitioner. Petitioner availed his statutory remedy of appeal. He filed before the Commissioner an application for stay. Partial stay was granted with an understanding that the appeal would be disposed of expeditiously. The appeal was finally heard but no orders could be passed as the appellate authority superannuated. The result is that petitioner’s appeal is not being disposed of and the demand by which he was aggrieved stands. The assessee was then assessed for assessment year 2011-12 and a small demand was made. He filed an application in terms of Section 154 of the Income Tax Act (hereinafter referred to as the Act) for rectification of error apparent on the face of the record which, if allowed, would entitle him to a very substantial refund. That application which is mandatorily to be dealt with is not being attended to by the authorities. The result is the huge anticipated refund is not fructifying. The assessee, in the past, has been assessed for the assessment year 2003-04 onwards up to assessment year 2008-09 and as per those concluded assessments, there are substantial refunds that are due to the assessee. Thus, seen there are demands and there are refunds. The grievance of the petitioner is that though legally there cannot be any connectivity between the assessment years as each assessment year is an independent entity, still the department which is a statutory authority Patna High Court CWJC No.17494 of 2014 (2) dt.15-10-2014 3 cannot ignore its obligation while enforcing the obligation of the assessee. In other words, what is submitted by the petitioner is that while keeping the petitioner’s application in respect of assessment year 2011-12 under Section 154 of the Act pending by virtue of which petitioner would become entitle to substantial refund and by not making refunds for already concluded assessment years as per assessment order itself, the Department is withholding substantial money of the petitioner without reasonable cause. On the other hand the Department without deciding the appeal is trying to enforce the assessment demand which is subject matter of appeal. That, on the face of it, is unfair. The Department says that it may have not refunded any amount but that cannot be a ground to stay recovery of the demand. In other words, if we understood, the Department says that because we have committed a default or slept over the matter in some parts, the right of the assessee is lost. All we can say in the words of Chief Justice Chagla in the case of All India Groundnut Syndicate Ltd., V. Commr. Of Income Tax, Bombay city reported in A.I.R. 1954 BOMBAY 232 (Vol. 41, C.N.63), that would be unfair and unjust, which is as follows: “But the most surprising contention is put forward by the Department that because their own officer failed to discharge his statutory duty, the assessee is deprived of his right which the law has given to him under sub- Patna High Court CWJC No.17494 of 2014 (2) dt.15-10-2014 4 section (2) of S. 24. In other words, the Department wants to benefit from and wants to take advantage of its own default. It is an elementary principle of law that no person-we take it that the Income-tax Department is included in that definition- can put forward his own default in defence to a right asserted by the other party. A person cannot say that the party claiming the right is deprived of that right because “I have committed a default and the right is lost because of that default.” ” We are cognizant that Income Tax Act is a Code by itself but at the same time, we must realize that the assessee also has rights and those rights cannot be frustrated by the Department sleeping over the matter. It is for the Department to see that assessee’s appeal and application under Section 154 of the Act are disposed of expeditiously. If these two matters are disposed of, then, there would be no controversy left. The controversy is because of inability of the Department to take up matters and disposed expeditiously. We are therefore, constrained to direct that so long as the assessee’s appeal for the assessment year 2010-11 and assessee’s rectification application under Section 154 of the Act in relation to the assessment year 2011-12 are not disposed of, no coercive steps would be taken to enforce the demands. It would be open to the Department to expedite Patna High Court CWJC No.17494 of 2014 (2) dt.15-10-2014 5 the proceedings, if they want to enforce the demand. In the mean time the Department would also be advised to look into the matter of past assessment years where refunds are due to the petitioner and ensure that the refunds are duly made. Consequently, Annexure-20 series which are attachment orders would stand in abeyance till the two proceedings aforesaid are not finally concluded. It is entirely within the control of the Department to expedite and conclude the proceedings at the earliest. With these observations, this writ petition is disposed of. avin/- (Navaniti Prasad Singh, J) (Jitendra Mohan Sharma, J) U "