M.V.JOY V. ASST.COMMISSIONER OF INCOME TAX ,KOZHIKODE

WP(C)/30157/2012

AI Insights

The case revolves around the proceedings initiated against M.V. Joy under Section 158BD of the Income Tax Act, following a search conducted on his brother's premises in 1999. The initial assessment against the petitioner's brother was overturned, and subsequent assessments were also challenged and eventually led to the Tribunal's decision in 2011. The notice to the petitioner was issued in 2012, leading to his objection based on the alleged delay in proceedings, which was rejected by the Assistant Commissioner. The petitioner challenged this rejection in the High Court, arguing that the delay rendered the proceedings arbitrary. However, the court found that the proceedings were within the statutory time limits and there was no unreasonable delay.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 699661 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-12-2012
• Assessment Year: misc
• Other Referred Cases: ITA NO. 982 OF 2009
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; MAHESH MENON
• Keywords: Block assessment; Delay in proceedings; Income Tax; Search and seizure
• Section: 132; 158BD; 158(BC); 158 BE(2)(b)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC TUESDAY, THE 18TH DAY OF DECEMBER 2012/27TH AGRAHAYANA 1934 WP(C).No. 30157 of 2012 (T) --------------------------- PETITIONER(S): ------------------------- M.V.JOY, MANICKATAN HOUSE, EDAVOOR, KOOVAPPADY P.O., ERNAKULAM DISTRICT - 683 544. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON RESPONDENT(S): ---------------------------- 1. ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOZHIKODE 673 001` 2. ASST.COMMISSIONER OF INCOME TAX, CIRCLE 1, 2ND FLOOR, KAP COMPLEX, RAILWAY STATION ROAD, ALUVA - 683 101. R1 & R2 BY ADV.SRI.JOSE JOSEPH, SC,INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18-12-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.30157/2012 T APPENDIX PETITIONER'S EXHIBITS: EXT.P1 COPY OF ASSESSMENT ORDER PASSED BY THE 1ST RESPONDENT DATED 18/07/2001. EXT.P2 COPY OF APPELLATE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), KOCHI DATED 10/03/2003. EXT.P3 COPY OF ASSESSMENT ORDER PASSED BY THE 1ST REPSONDENT DATED 28/06/2005. EXT.P4 COPY OF APPELLATE ORDER PASSED BY THE CIOMMISSIONER OF INCOME TAX (APPEALS), KOCHI DATED 24/11/2005. EXT.P5 COPY OF ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL KOCHI BENCH DATED 28/06/2011. EXT.P6 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT DATED 8/8/2012. EXT.P7 COPY OF OBJECTION SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 01/10/2012. EXT.P8 COPY OF REPLY ISSUED BY THE 2ND RESPONDENT DATED 19/11/12. EXT.P9 COPY OF JUDGMENT IN ITA NO. 982 OF 2009 OF THIS HON'BLE COURT DATED 29/03/2012. RESPONDENTS' EXHIBITS: N I L /TRUE COPY/ P.S.TO JUDGE Kss ANTONY DOMINIC, J. -------------------------------------------------- W.P.(C) NO.30157 OF 2012(T) -------------------------------------------------- Dated this the 18th day of December, 2012 J U D G M E N T Heard the counsel for the petitioner and the Standing Counsel for the respondents. 2. A search in the premises of the petitioner's brother under Section 132 of the Income Tax Act was conducted on 29.7.1999. Proceedings were initiated under Section 158 BC of the Act and finally Ext.P1 order of assessment was passed on 18.7.2001. In an appeal filed against Ext.P1 order, Ext.P2 order dated 10.3.2003 was passed cancelling Ext.P1 and holding that the steps should be taken under Section 158BD. Thereupo Ext.P3 order dated 28.6.2005 was passed against the petitioner's brother under Section 158BD. 3. Petitioner's brother filed appeal and by Ext.P4 order, the appellate authority cancelled Ext.P3 order taking the view that the proceedings should have been initiated against the petitioner. Against that order the revenue filed an appeal before WPC.No.30157/2012 :2 : the Tribunal which was dismissed by Ext.P5 order dated 28.6.2011. 4. Thereafter Ext.P6 notice dated 8.8.2012 was issued to the petitioner under Section 158BD of the Act. Thereupon the petitioner filed Ext.P7 objection contending that the proceedings against him are time barred. That objection raised by the petitioner was rejected by Ext.P8 stating that Section 158BD did not provide for any time limit for initiating proceedings and therefore the plea of limitation is without substance. It is challenging Ext.P8 the writ petition is filed. 5. Contention raised by the counsel for the petitioner is that although there is no limitation for issuing notice as stated in Ext.P8, assessment proceedings should be completed within a reasonable time of search. It is stated that search in this case was on 29.7.1999 and the proceedings against the petitioner are initiated by Ext.P6 notice dated 8.8.2012. This according to the counsel shows that there has been unexplained and inordinate delay which renders the proceedings against the petitioner WPC.No.30157/2012 :3 : arbitrary as held by this court in Ext.P9 judgment. 6. Section 158 BE(2)(b), provides that the period of limitation for completion of block assessment in the case of other person referred to in Section 158BD shall be 2 years from the end of the month in which notice has been served on such other person in respect of the search conducted under Section 132 of the Act. Therefore, it is obvious from this provision that the limitation starts only from the service of notice and not from any point of time prior thereto. Admittedly, notice in this case was served on the petitioner only by Ext.P6 dated 8.8.2012 and if it is so counted, the proceedings are well within time. This view has been accepted by the Division Bench of this court in Ext.P9 judgment also. 7. In so far as the case of the petitioner that the assessment proceedings has not been completed within a reasonable time and therefore is arbitrary, it has to be stated that proceedings against the petitioner's brother culminated only by Ext.P5 order of the Tribunal rendered on 28.6.2011. If that be WPC.No.30157/2012 :4 : so, as held in Ext.P9 judgment itself, proceedings could have been initiated against the other person, viz the petitioner, only thereafter. If that be the case, on facts I am unable to agree with the counsel that there has been any unexplained or inordinate delay in this case. Therefore Ext.P8 order has to be upheld and I do so. Writ petition fails a and is dismissed. (ANTONY DOMINIC) JUDGE vi/ "