Mrs. Nowhera Shaik V. The Union of India and 3 others

WP/42847/2022

AI Insights

The case involves Nowhera Shaik, the director of Heera Retail (Hyderabad) Private Limited, who filed a writ petition under Article 226 of the Constitution of India against the Union of India and various income tax authorities. The petition challenged the actions of the Deputy Commissioner of Income Tax (respondent No.3) for not providing a hearing date for appeals filed by the petitioner, which she claimed was illegal and arbitrary, violating Articles 14, 19(1)(g), and 21 of the Constitution. Additionally, the petitioner sought to prevent the Tax Recovery Officer (respondent No.4) from recovering dues from her personal assets pending the disposal of the writ petition. The court found that a reasonable opportunity of hearing was necessary before imposing liability on the petitioner for the company's tax arrears and directed the third respondent to consider the review petition after hearing the petitioner.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 743873 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 12-12-2022
• Assessment Year: misc
• Other Referred Cases: Kapra Mazdoor Ekta Union v. Management of M/s. Birla Cotton Spinning and Weaving Mills Ltd. [2005 AIR (Supreme Court) 1782]
• Laws Referred To: Article 226 of the Constitution of India, Section 179 of the Income Tax Act, 1961, Section 220(2) of the Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: GADI KUMAR; K CHOUDARY
• Assessee Lawyers: M REDDY
• Keywords: Director's Liability; Income Tax Arrears; Review petition; Tax Recovery; Writ of Mandamus
• Section: 220(2); 226; 179

Judgement Text

"[ 32s5 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) IUONDAY ,THE TWELFTH DAY OF DECEMBER TWO THOUSAND AND TWENTY TWO PRESENT Between: I rlrs. Nowhera Shaik, Director Heera Retail (Hyderabad) Private Limited, H No. 12-6-212681112 3.4 Vivek Nagar, Kukatpally, Hyderabad - 50OO72 . ...PETITIONER AND 1. The Union of lndia. l /linistry of Finance, lncome Tax Department. 2. The Commissioner of lncome Tax Appeals, sth Floor,Signature Towers, Kondapur, Hyderabad - 500084. 3. The Deputy Commissioner of lncome Tax, Circle. 2(1), Room No.514, 5th Floor, Signature Towers. Kondapur, Hyderabad - 500084. 4. Tax Recovery Officer. TRO PCIT 2, sth Floor, Signature Towers, Kondapur, Hyderabad - 500084. ,..RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ, order or direction, more particularly, one in the nature of Writ of lvlandamus declaring the action of the respondent No.3 i.e Revision Authority in not faxing the date of hearing for deciding the appeals filed by writ petitioner as illegal, arbitrary, vrolatrve of Articies 14, 19(1)(g) and 21 of the Constitution of India, 1 950 lA NO: 1 oF 2022 Petition under Section 151 CPC praying that in the crrcumstances stated in the affidavjt filed in support of the petition. the High Cou{ may be pleased to dilect the Respondents No 4 in not to take steps to recover the dues from personal assets of directors of the company towards recovery proceedings vide DIN and Order No. ITBA/CO[//F/1712022-2311045776143(1) daled 11.10.2022 pending the disposal of the above Writ Petition Counsel for the Petitioner:SRl. M. GOVIND REDDY Counsel for the Respondents No.1: GADI PRAVEEN KUMAR (Dy, SOLICITOR GENERAL OF INDIA) Counsel for the Respondent No.2,3&4:M/s. K.MAMATA CHOUDARY The Court made the following: ORDER THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C,V. BHASKAR REDDY WRIT PETITION NO: 42847 OF 2022 .I'HE tIC N'B]-E EU ts. I)',4N ANI) THE H ON'BLE SRI IUSTI C I:] C.V.BHASK-^R R IIf)I)Y V'.P.No.42847 of 2022 RDI]R (Pcr. the Ho,'bh the CbielJalte llja/ tsLa1n,4 FIcard X [r. M.Govind l{eddy, iearncd cottttst:l for the pctitioncr; N r. (l.Praveen Kumxr, Iearncd f)1|11r1, Solicitor General of Ir dia for respondcnt No.1; anrl NL;. I(.N,lamata Choudary. lca rned Senior Standing C<-lunscl, n,i()mc Tax I)eparonent fo: respondcnrs No.2.3 and 4 2. By filing this petirion undcr - rticle 226,,f t}:r (l<>nstirudon of India, peti irrner secks a clirection to reip()n( t:r Lt No.3 to considcr the re ricw petition fried bl the petitioner aill inst the order dated 21.1)9.2012 passed by the saicl respondcnr ur.rrlrr Scc:tron 179 o[the Income I'ax Act, 1961 (bricflv'thc Act'htrcrr:aftr:r) 3. A perus:l o[ the order dated 21,.09.2022 w,rulcl go to show that there is income tax arrears against N1 ,/s.J Iee ra Retail (Hyderabad) lrivate Limited to the tune o[' ]ls 992 crorcs (approximatcll ) lor various assessment years. l-) r::pit,: scveral EF I . opportunities und recovery measures, the assessee fhrlr:d t,r pay thc 2 tax arrears. Thcrcfore, lctter dated 13.07.2022 was issucd through mail as well as through spccd post to the petitioner being the Director of thc asscssec company to shorv cause as to why she should not bc hcld liablc for payment of tax arrears of the assessee company under Section 179(1) of the Act. The order records that the petitioner did not hle any reply. Hence, a view was taken that petitioner had no objection to trcat her as Iiable for payment of tax arrears of the assessee company undcr Scction 119 ('l) of the Act. Accordingly, it has bcen held that petitioner being the Dircctor of assessee companv is jointlt, and sevcrally [able for Payment of tax arears of the ASSCS.SCC compan)r amounting to Rs.992 ctores (approximately). Shc has bcen directed to pay the same along with interest under Section 220(2) of thc Act trll the date of payment. In the event o[ failure, it has been mentioned that petitioner would be treated as an assessee in dclault and recovery proceedings would be initiated to recover the tax arrears: 4. Petitioner filed a peution lor review of the aforesaid order dated21..09.2022before respondent No.3 on 11.10.2022. 7ith the I I I ., grievance that nc decision was takcn on the said rcvlcrv.pcudon, the related rvrit pr tidon camc to bc hlcd by the pctr rir nr - 5. On29.11.2)22,wehad passed the following ordrrr: Pctibrncr seeks a direction to thc 3d rcspon.ler t to consi< er her application for tcview of order di tccl 21..09.20.'.2 ptssed under Section 179 of thc Incr,rle f'ar Act 1961 @riefly refetred to hercinaftcr as rl ,e 'Act'). 'Whr n rve queried learned c<>unsel f,rt rlre pentiont t as to whcthet Secdon 179 of thc ct ,,r ;ul' other p rovision of the Act pror.ides frrr ri'r ic v, learncd counsel has drawn ouf attentlon ti a judgTner rt of the Supreme Court in Kapra Mazoor Ekta Union v. Management of M/s. Birla Cctt,x Spinnirrg and Weaving Mills Ltd. [2005 AtR (Supre ne Coun) 1782] more particularly to par,r 20 thereof and submits that procedirral rcr..ic,r' is inherer t in a quasi judicial authority. Ms Mamata Choudary, learned Standing t--o,rnscl, Incom, : Tax Departrneot to qbtain instrucrions. Lis t on 12.1.2.2022 undet the same caprior-r. 6. In the rearing today, learned Senior St:rrr,l:r g Counsel, Income I'ax t epartment submits that letter dated 1i.r)7.i2022 ',vas I I 4 r issucd to the petitioner through e-mail as rvell as through spccd post and was scrvcd upon her. Notwithstanding the same, petitioner did not appear bcfore respondent No.3. 7. However, the same is disputed by lcarned counsel for the peririoner, who subrnits that pctitioner did not receive any such lettcr. B. Be that as it may, without enteflng into thc above aspect, we are of thc view that before lastcning Liability on thc I)ilcctor of the assessee company i.e., the pctitioner, a rcasonable opportunity of hearing is required to be grantecl to hcr, more so bccause the amount involved is quitc substanual. It rvill only bc in the aid of justice if a reasonable opportunin, o[ hcaring is granted to the petidoner. It is in that cofltext, we are incljned to acccpt the plea of leamed couasel for the petitioner that thc review petition filed by the pedtiooer may be considercd by respondcnt No.3 after giving an opportuniry of hearing to thc pctitioner. 5 9 'l'hat be n.q thc posiuon, rvc direct respr,nderr t irlt,.3 to givc an opportunir ' to thc petitioner to make submrssion; r eger:ding hcr liabiliw to [,ay the tax arrears o[ the asscr;li( e compatrv i.e,, M/s. llec 'a Retail (Hyderabad) Private Lirnitccl rrrd thereaftcr pass approprii tc ordcr in accordance with law. 1() Pctiuon :r shall appeal before rcspo'r Jent No.3 on 07.01.202 at 11:00 a.m. whereaftet respondr:rr Nr>.3 shall procccd rvith he matter. 11. Wc clarifv that order dated 21.09.2022 rvoul,l l>c itrbje* to thc outc()me < ,f the fresh consideration b)l resp,rn{61r' 1,-,.i 12. Writ Pe jtion is accordingly disposed of. No cr :;ts. A s a st quel, miscellaneous petitrons, pcnclin: if rLny, stand disposed ofl //TRUE COPY// SD/.N.SRIHARI A SS rS rANr$EGISTRAR r;ecir#ru oFFrcER To, 1 The DeDul r' Commissioner of lncome Tax, Circle 2(1). ioom No 514, sth rioor, sigr'ature Towers, Kondapur, Hyderabad - 5000t1. 2 one CC tc SRI M GOVINIJ REDDY. Advocate,OPUCl 3 ONC CC tC SRI, GADI PRAVEEN KUMAR (DY, SOLICIIi] I GENERAL OF INDIA), Ao r'ocate IOpUCt 3 i,xs 33 to rvr/s lvlAMArA',cHouDARY, Advocate [opUr)J BM BS ?nq, HIGH COURT DATED:1 211212022 ORDER WP.No.42f 47 of 2022 DISPOSING OF THE WRIT PETITION WITHOUT COSTS qaM^ t' ,g .44 |i(xe )': 1s STATE oA /,/ < rr' l N8 -) .j) 1\", . * -ra- rO "