PRITHVI RAJ SINGH V. COMMISSIONER OF INCOME TAX ORS

CW/12980/2015

AI Insights

The case involves Prithvi Raj Singh, HUF, represented by his legal heir Smt. Jai Shree Kumari, challenging the orders related to the valuation of a commercial property and subsequent tax assessments. The property, 'Sumer Talkies', was sold, and the Sub Registrar assessed it at a higher value than declared, leading to a demand for additional stamp duty. The Income Tax Officer later assessed the property at this higher value for tax purposes. The petitioner contested these valuations and the subsequent tax demand, arguing that the assessments were arbitrary and not properly notified. However, the court found the petition to be not maintainable as the petitioner had already approached the appellate authority and did not seek a stay on the disputed orders.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 685159 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 19-01-2016
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax & Ors. vs. Chhabil Dass Agarwal, M/s. Maheshwari Agro Industries vs. Union of India & Ors
• Laws Referred To: Rajasthan Stamp Act, Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: PARINITOO JAIN; DHEERAJ TRIPATHI
• Assessee Lawyers: ABHEY BHANDARI; SAMIT BISHNOI
• Keywords: Alternative remedy; Income tax assessment; Stamp Duty; Valuation of property; Deficit stamp duty
• Section: 54; 50C

Judgement Text

"S.B. Civil Writ Petition No. 12980/2015 1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR S.B. Civil Writ Petition No. 12980/2015 Prithvi Raj Singh, HUF-Petitioner Versus Commissioner of Income Tax & Ors.-Respondents Date of Order :: 19/01/2016 Hon'ble Ms. Justice Bela M. Trivedi Mr. Abhey Bhandari Sr. Advocate with Mr. Samit Bishnoi, for the petitioner. Ms. Parinitoo Jain for the respondent Nos.1 and 2. & Mr. Dheeraj Tripathi, Deputy Govt. Counsel, for the respondent Nos.3&4. ORDER BY THE COURT : 1. The present petition has been filed by the petitioner Prithvi Raj Singh, HUF through legal heir Smt. Jai Shree Kumari W/o.Late Shri Prithvi Raj Singh, challenging the order dated 19/9/2011 passed by the Sub Registrar, Beawar, District Ajmer, and the order dated 31st March, 2015 passed by the Assessing Officer. The petitioner has also challenged the demand notice dated 31st August, 2015 issued by the Income Tax Officer, Ward No.1, Kishangarh. 2. The short facts giving rise to the present petition are that late Shri Prithvi Raj Singh, husband of Smt. Jai Shree Kumari-petitioner herein had executed a sale deed in favour of M/s. Jai Hind Build Con on 9/9/2011 in respect of his commercial property known as “Sumer Talkies” for the sale consideration of Rs.6,04,75,000/-. The Sub Registrar vide the letter dated 19/9/2011 (Part of Annexure-6) raised the demand of deficit stamp duty in exercise of the powers conferred under Section 54 of the Rajasthan Stamp Act evaluating the property in question to the tune of Rs.8,91,48,410/-. According to the petitioner, the said late Shri Prithvi Raj Singh was one of S.B. Civil Writ Petition No. 12980/2015 2 the partners in the firm M/s. Jai Hind Build Con, who had purchased the said property, however he having expired on 6/11/2011, a retirement deed was executed by the legal heirs of Shri Prithvi Raj Singh on 12/12/2011. Thereafter, the petitioner received the notice on 9/1/2015 from the Income Tax Officer Ward-1 i.e. the respondent No.2 calling upon the petitioner to explain the discrepancy as the property in question was assessed by the Sub Registrar at Rs.8,91,48,410/-, however the petitioner had computed the income showing the consideration at Rs.6,06,91,845/-. The petitioner vide the letter dated 16/1/2015 replied to the said notice and objected to the valuation of the property in question as done by the Sub Registrar. The petitioner thereafter came to know that the pruchaser M/s. Jai Hind Build Con had accepted the re-valuation made by the Stamp Department and had deposited the stamp duty on 21/11/2011 as demanded. It is further case of the petitioner that even though the petitioner had raised the objection, the Assessing Officer without considering the said objection, passed the assessment order dated 31st March, 2015, without waiting the report of District Valuation Officer as contemplated under Section 50C of the Income Tax Act. The petitioner being aggrieved by the said order has filed the appeal before the Commissioner of Income Tax (Appeals), Ajmer which is pending for consideration. The present petition has been filed by the petitioner challenging the impugned order of Sub Registrar (Stamp) Act and also the said order passed by the Assessing Officer. 3. It is sought to be submitted by the learned senior counsel Mr. Abhey Bhandari for the petitioner that the Sub Registrar had passed the impugned order without issuing any notice to the petitioner or her husband and had made valuation of the property in question without any basis. According to S.B. Civil Writ Petition No. 12980/2015 3 him, the petitioner was also not aware that the said order was already complied with by the purchaser firm by making payment of the deficit stamp duty as demanded by the Sub Registrar. Pressing into service the provisions contained in Section 50C of the Income Tax Act, the learned Senior Counsel Bhandari submitted that the petitioner had already objected against the Assessing Officer having adopted the valuation made by the Sub Registrar, Stamp Duty and therefore the Assessing Officer was required to refer the matter to the Valuation Officer, and frame assessment after receiving the report from him, however the Assessing Officer without waiting for such report had passed the impugned order. He further submitted that the petitioner having left with no remedy to challenge such arbitrary orders passed by the concerned authorities, has approached this Court. However, the learned counsel Ms. Parinitoo Jain appearing for the respondent Nos.1 and 2 submitted that the petitioner having already challenged the order dated 31/3/2015 passed by the Assessing Officer before the Appellate Authority i.e. Commissioner of Income Tax (Appeals), the present petition is not maintainable in the eye of law. She also submitted that the petitioner had not even asked for the stay against the said order passed by the Assessing Officer, before the Appellate Authority and therefore the petitioner cannot be granted any relief, as prayed for. She has relied upon the decision of Apex Court in case of Commissioner of Income Tax & Ors. vs. Chhabil Dass Agarwal, (2013) 357 ITR 357(SC) to submit that when the alternative remedy is available to the petitioner, the petition under Article 226 of the Constitution is not maintainable. She has also relied upon the decision of this Court in case of M/s. Maheshwari Agro Industries vs. Union of India & Ors, (2012) 246 CTR (Raj.) 113 to submit S.B. Civil Writ Petition No. 12980/2015 4 that the Commissioner of Income Tax (Appeals) has all the authority to confirm, reduce, enhance or annul the assessment as also to pass necessary orders for stay against the recovery of the disputed demand. The learned counsel Mr. Dheeraj Tripathi for the respondent Nos.3 and 4 has submitted that late Shri Prithvi Raj Singh being the partner of the firm M/s. Jai Hind Build Con, which had purchased the property in question, and the said purchaser having already complied with the order dated 19/9/2011 passed by the Sub Registrar, it was not open for the petitioner to challenge the same and that too after the lapse of more than four years. 4. Having regard to the submissions made by the learned counsels for the parties, and to the documents on record as also the provisions of the Rajasthan Stamp Act as well as of the Income Tax Act, it appears that admittedly, the petitioner has challenged the impugned order dated 31/3/2015 passed by the Assessing Officer, before the CIT(Appeals). Hence in view of the decision of the Supreme Court in case of CIT vs. Chhabil Dass Agarwal relied upon by Ms. Parinitoo Jain, the present petition under Article 226 would not be maintainable in the eye of law. It is held therein as under :- “Before discussing the fact proposition, we would notice the principle of law as laid down by this Court. It is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction underArticle 226. (See: State of U.P. vs. Mohammad Nooh, AIR 1958 SC 86; Titaghur Paper Mills Co. S.B. Civil Writ Petition No. 12980/2015 5 Ltd. vs. State of Orissa, (1983) 2 SCC 433; Harbanslal Sahnia vs. Indian Oil Corpn. Ltd., (2003) 2 SCC 107; State of H.P. vs. Gujarat Ambuja Cement Ltd., (2005) 6 SCC 499).” 5. In view of the above stated legal position, the petitioner having already approached the Appellate Authority and availed of the alternative remedy, this petition under Article 226 of the Constitution is not maintainable. The submission made by the learned counsel Ms. Parinitoo Jain for the respondents that the petitioner having not made any application before the Appellate Authority seeking stay against the execution of and the order passed by the Assessing Officer, the demand notice dated 31/8/2015 was issued by the concerned Income Tax Officer has also not been disputed by the learned counsel for the petitioner. It is also pointed out by the learned counsels for the respondents that in the grounds of appeal, the petitioner has already objected against the determination of sale consideration to be Rs.8,91,48,410/- instead of Rs.6,06,91,845/-. That being the subject matter pending before the Appellate Authority, the Court restrains itself from expressing any opinion on such valuation. It is needless to say that the Appellate Authority shall decide the said appeal in accordance with law. 6. So far as the impugned order dated 19/9/2011 is concerned, apart from the fact that the same is sought to be challenged after four years by the petitioner, it is pertinent to note that the said order was passed when the seller Shri Prithvi Raj Singh, who was the husband of the petitioner and also one of the partners of the purchaser firm was alive. Thereafter the said purchaser firm had complied with the said order passed by the Sub Registrar, crystalling the liability of the purchaser firm. It is therefore not open for the petitioner to challenge the said order by way of present S.B. Civil Writ Petition No. 12980/2015 6 petition, more so when the petitioner has challenged the assessment made by the Assessing officer on the basis of the said order of the Stamp Authority, before the CIT(Appeals). Though it is sought to be submitted by the learned Senior Counsel Mr.Abhey Bhandari for the petitioner that the petitioner was not aware about the deposit of deficit stamp duty made by the purchaser firm, it is difficult to accept the said submission. When the said late Shri Prithvi Raj Singh was alive at the relevant time, and subsequently when the deed of retirement was also executed on 12/12/2011 by the legal heirs of Shri Prithvi Raj Singh, it is too late in the light of the day for the petitioner to challenge the said order passed by the Sub Registrar as back as in the year 2011. 7. In that view of the matter, the Court does not find any substance in the present petition. The petition being devoid of merits is dismissed. By this order, the stay application and other pending application, if any also stand dismissed. (Bela M. Trivedi) J. Sanjay Solanki PA 33All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.” Sanjay Solanki Personal Assistant "