Pragada Sai Sudha V. The Commissioner of Income Tax, Ayakarbhavan, Hyderabad and Others

WP/32134/2010

AI Insights

The case involves Pragada Sai Sudha, the petitioner, who contested the attachment of her property (Flat No.GF1, Sai Kuteer Apartments, Visakhapatnam) due to tax arrears by M/s. Surabhi Builders, a partnership firm. The property was purchased from Smt. Surabhi Subhashini, a partner in the defaulter firm, after the service of a tax demand notice (Form No.ITCP-1) but before the actual attachment. The court's decision focused on the legal effect of the tax demand notice, which it held took precedence over the property transaction, rendering the sale deed inoperative.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 796994 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 19-01-2011
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Income Tax; Property Attachment; Writ petition; Legal Course
• Section: 222; 322

Judgement Text

"THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.32134 of 2010 19.01.2011 Between: Pragada Sai Sudha …. Petitioner AND The Commissioner of Income Tax, Ayakarbhavan, Hyderabad And others. … Respondents THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.32134 of 2010 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) In this second round of litigation invoking Article 226 of Constitution of India, the cause of action for the petition is the same, namely, the attachment of the immovable property (Flat No.GF1, Sai Kuteer Apartments, Akkayyapalem, Visakhapatnam) purchased by the petitioner on 01.12.2008. In the earlier writ petition being W.P.No.19252 of 2009 assailing the order of attachment by the Tax Recovery Officer – third respondent herein; for recovery of the tax dues of the fourth respondent, was disposed of by this Court directing the official respondents to consider the objections raised by the petitioner within the stipulated period and restrained them from disposing of the subject property till objections are considered. In this writ petition, the grievance is inaction on the part of the official respondents especially the third respondent. At the stage of admission itself, the Junior Standing Counsel for Income Tax has placed before this Court a letter of the third respondent dated 17.11.2009, rejecting the objections. The contents thereof cover the fact of the matter and the reasoning for rejection, and we need to excerpt herein below. It is brought to your notice that M/s.Surabhi Builders, Visakhapatnam a partnership firm is in Income Tax arrears to the tune of Rs.1,97,23,000/-. Sri S.A.S.V.Prasad is the Managing Partner and Smt Surabhi Subhashini, W/o Sri S.A.S.V.Prasad is the other partners of the defaulter firm. As the assessee did not pay the tax within the time allowed, the case was referred to the undersigned by drawing a Certificate U/Sec 222 by the Income Tax Officer, Ward-4 (1), Visakhapatnam. Soon after receipt of the Certificate u/Sec. 322, notice of Demand to the defaulter in Form No.ITCP-1 and Form No.57 were issued on 24.10.2008 and the same were served on the Managing Partner of the defaulter firm on 30.10.2008. The first referred to in your letter was attached on 27.07.2008. In the objections raised by you, it is mentioned that you had purchased the Flat GF-1, D.No.49-39-9/1, Sai Kuteer Apartments, NGGO’s Colony, Visakhapatnam on 01.12.2008 from Smt S.Subhashini under a Registered Sale Deed. In this connection, it is brought to your notice that under Rule 51 of Second Schedule in Income Tax Act, 1961 the attachment of immovable property, deemed to be effect from the date of service of Form No.ITCP-1 and not from the date of attachment. Any charge created before the attachment, but after the service of Form No.ITCP-1 will have to give precedence to the attachment. In the instant case, the ITCP-1 was served on 30.10.2008 on Smt.Surabhi Subhashini, Partner in M/s.Surabhi Builders, Visakhapatnam whereas the Registered Sale Deed was executed on 01.12.2008 i.e., after the date of service of ITCP-1. Therefore, though the actual attachment was made on 27.07.2008 if taken affect from 30.10.2008 i.e., date of service of ITCP-1. In the above circumstances, it is brought to your notice that the sale deed executed by Smt.Surabhi Subhashini on 01.12.2008 is null and void and the same is inoperative in the eye of law. Hence, the Order of the attachment made on Flat No.GF-1, D.No.49-39-9/1, Sai Kuteer Apartments, NGGO’s Colony, Visakhapatnam on 27.07.2009, by serving ITCP-16 on Smt.Surabhi Subhashini, is in force and very much operative in the eye of law. Accordingly, the objections raised by you vide reference (2) cited above, are hereby rejected. The counsel for the petitioner having regard to the above communication does not pursue the matter further. We give liberty to the petitioner to take such legal course as is available under law and express no opinion on the contentions raised herein. The writ petition with the above observations stands dismissed. There shall be no order as to costs. _______________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 19.01.2011 Pln "