Provident Housing Ltd. and Mr. V. Madhu and Mr. Ramesh Kumar V. The Income Tax Officer, Ward No 1(2), Mangalore and The Commissioner Of Income Tax, Mangalore

WP/38080/2013

AI Insights

The case involves M/S Provident Housing Ltd. and Mr. Ramesh Kumar as petitioners, challenging a provisional attachment order issued by the Income Tax Officer, Mangalore, under Articles 226 and 227 of the Constitution of India. The attachment was related to properties pending assessment for the years 2011-2012 and 2012-2013, with a substantial demand likely to be raised. The petitioners argued that the order was unsustainable as it affected properties in which they had definite shares under a joint development agreement and claimed there was no tax liability as there was no transfer of property. The respondents defended the order citing the ongoing assessments and the need to prevent alienation of the properties. The court did not find merit in interfering with the provisional attachment but directed the timely completion of the pending assessments.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 794248 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-10-2013
• Assessment Year: misc
• Other Referred Cases: ITR 1979 page 852, ITR 2000 page 169, W.P.No.15764/2008, W.A.No.2045/2009
• Laws Referred To: Articles 226 and 227 of the Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: M THIRUMALESH
• Assessee Lawyers: UDAYA HOLLA; JOSHUA SAMUEL; KIRAN KUMAR
• Keywords: Income Tax; Joint Development Agreement; Provisional attachment; Assessment pending; Alienate properties
• Section: 1(2)

Judgement Text

" - 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 10th DAY OF OCTOBER, 2013 BEFORE THE HON’BLE MR.JUSTICE H.BILLAPPA WRIT PETITION No.38080/2013 (KLR) BETWEEN: 1. M/S Provident Housing Ltd., having its registered Office at No.130/1, Ulsoor Road, Bangalore 560 042. Represented by its Managing Director Mr.V.Madhu. 2. Mr.Ramesh Kumar, S/o.Choodppa Salian, 61 Years, R/o.‘Saraswathi’, Gandhinagar, Mangalore – 03. …Petitioners (By Sri.Udaya Holla, Sr. Counsel for Sri.Joshua Hudson Samuel, Adv. for Petr.1 Sri.K.Kiran Kumar, Adv For Petr.2) AND: 1. The Income Tax Officer, Ward No 1(2), Mangalore, Aayakar Bhavan, C R Building, Attavar, - 2 - Mangalore 575 001. 2. The Commissioner Of Income Tax, Aayakar Bhavan, C.R.Building, Attavar, N G Road, Mangalore 575 001. …Respondents (By Sri.M.Thirumalesh. Adv. For R1 & 2) ****** This W.P. filed praying to under Articles 226 and 227 of the Constitution of India praying to quash the impugned order dated 28.2.2013 vide Ann-J passed by the first respondent and/or consequently confine the order of attachment only to the extent of the third respondent's right in the super built up area along with proportionate undivided share in the land. This petition coming on for Orders this day, the Court made the following:- O R D E R In this writ petition under Articles 226 and 227 of the Constitution of India, the petitioners have called in question, the order dated 28.2.2013, passed by the first respondent vide Annexure-J. 2. By the impugned order at Annexure-J, provisional attachment order has been passed by the first respondent directing the assessee i.e., the second petitioner not to alienate the - 3 - properties mentioned in the order without prior permission of the first respondent as assessments for the years 2011-2012 and 2012-2013 are pending and substantial demand is likely to be raised. The order at Annexure-J has expired. Thereafter, vide Annexures Q and R the attachment order has been extended by another six months. 3. Aggrieved by that, the petitioners have filed this writ petition. 4. The learned counsel for the first petitioner contended that the impugned order cannot be sustained in law. He also submitted that the first petitioner has a definite share in one of properties under the joint development agreement and it cannot be attached and therefore, the impugned order cannot be sustained in law. 5. The learned counsel for the second petitioner contended that there is no transfer of property and therefore, there is no tax liability. The impugned order and its extension - 4 - cannot be sustained in law as it is devoid of reasons. He placed reliance on the decisions reported in ITR 1979 page 852 and ITR 2000 page 169. 6. As against this, the learned counsel for the respondents 1 and 2 submitted that the writ petition itself is not maintainable. He also submitted that the assessments for the years 2011-2012 and 2012-2013 are still pending and therefore, the provisional attachment order has been extended by another six months and it does not call for interference. He placed reliance on the unreported decision in W.P.No.15764/2008 and W.A.No.2045/2009. 7. In W.P.No.15764/2008, disposed of on 13.4.2009, the learned Sessions Judge of this court has observed that the validity of the order passed by the Income Tax Authorities cannot be examined under articles 226 and 227 of the Constitution of India at the instance of the petitioner who is a mere agreement holder. In the writ appeal in W.A.No.2045/2009 all the contentions of the parties are left - 5 - open. In the present case the assessee against whom the attachment order has been passed is one of the petitioners. Therefore, the decision relied upon by the learned counsel for the respondents will not help him. 8. Insofar as the contention of the petitioners as to whether there is transfer of property, whether there is tax liability, it cannot be gone into in this writ petition. The Assessing Authority by order dated 28.2.2013 has passed provisional order of attachment. The period of six months has expired. Thereafter, the time has been extended by another six months. Perusal of Annexures-Q and R show that Commissioner of Income Tax, Mangalore, has accorded permission for extension of time and accordingly, the time has been extended by another six months. 9. The assessments for the years 2011-2012 and 2012-2013 are still pending. Therefore, it is not appropriate to interfere with the impugned order and its extension. However, the assessing Authority can be directed to complete the - 6 - assessment for the years 2011-2012 and 2012-2013 within the extended period. Accordingly, the writ petition is disposed of directing the Assessing Authority to complete the assessments for the years 2011-2012 and 2012-2013 within the extended period of six months. The 2nd petitioner shall co-operate with the Assessing Authority to complete the assessment. The contentions of the parties are left open. Sd/- JUDGE Dvr: "