Purnima Jain V. Union Of India, Through Ministry Of Finance, New Delhi and Principle, Commissioner Of Income Tax, Ayakar Bhawan, Jodhpur and The Income Tax Officer, Ward- 1, Pali

CW/12971/2024

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The case involves Purnima Jain, the petitioner, who challenged the constitutional validity of Section 115 BBE of the Income Tax Act, which was used to add Rs. 1,44,52,700 to her income for tax purposes based on the disclosure of old currency. Initially, an assessment order was passed on 07.12.2019, followed by a demand for tax. The petitioner filed an appeal and a writ petition, which led to an interim order preventing coercive recovery actions. Despite the ongoing writ petition, the appellate authority upheld the assessment order. The High Court, while disposing of the writ petition, maintained that no recovery could be made until the writ petition's outcome, despite the dismissal of the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 821025 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 08-08-2024
• Assessment Year: misc
• Other Referred Cases: Purnima Vs. Union of India & Ors.
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: SUNDEEP BHANDAWAT
• Keywords: Assessment Order; Coercive Action; Constitutional Validity; Interim order; Old currency
• Section: 115 BBE

Judgement Text

"[2024:RJ-JD:33194-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 12971/2024 Purnima Jain D/o Narpat Raj Lunker, Aged About 30 Years, Resident Of 40, Juro Ka Bas, Pali, 306401, Rajasthan. ----Petitioner Versus 1. Union Of India, Through Ministry Of Finance, New Delhi. 2. Principle, Commissioner Of Income Tax , Ayakar Bhawan, Jodhpur. 3. The Income Tax Officer, Ward- 1, Pali. ----Respondents For Petitioner(s) : Mr. Sundeep Bhandawat For Respondent(s) : Mr. K.K. Bissa HON'BLE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE MADAN GOPAL VYAS Order 08/08/2024 1. Mr. K.K. Bissa appears on behalf of the Income Tax Department on advance copy. 2. Heard. 3. This petition, under Article 226 of the Constitution of India, has been preferred against the order dated 13.05.2024 passed in appeal filed by the petitioner-assessee in the matter of assessment and demand of tax pursuant to the assessment order dated 07.12.2019 passed by the assessing officer. 4. Learned counsel for the petitioner would submit that initially an assessment order was passed on 07.12.2019, making addition of Rs.1,44,52,700/-, which pertains to disclosure of the old currency. Though an appeal was preferred against the order of assessment, the assessee, upon receiving the legal advice, filed a petition challenging the constitutional validity of Section 115 BBE of the Income Tax Act, which permitted such addition. It is also [2024:RJ-JD:33194-DB] (2 of 3) [CW-12971/2024] submitted that on such petition being filed, this Court passed an interim order on 15.01.2021 in D.B. Civil Writ petition No.13656/2020 [Purnima Vs. Union of India & Ors.] to the effect that no coercive action shall be taken for recovery of the disputed amount. It is submitted that though the aforesaid writ petition is still pending consideration and an interim order is continuing, the appellate authority has proceeded to decide the appeal upholding the order of assessment which was essentially based on addition made under Section 115 BBE of the Income Tax Act. 5. Taking into consideration the background of the case, we are inclined to dispose off this petition at this stage. 6. It appears that an assessment order was passed on 07.12.2019 making addition of Rs. 1,44,52,700/- in respect of the old currency which was disclosed by the assessee. The assessee filed a petition challenging the constitutional validity of provisions contained in Section 115 BBE of the Income Tax Act, as the addition was made on the basis of the aforesaid provision. In the writ petition filed by the petitioner, as aforesaid, an interim order has been passed by this Court directing that no coercive action shall be taken against the petitioner. At that point of time, only assessment order was passed followed by demand of tax. It is quite apparent that the petitioner had filed an appeal and thereafter filed writ petition challenging the constitutional validity of Section 115 BBE of the Income Tax Act. The appellate authority has now proceeded to pass order upholding the assessment. The challenge to the order passed in the appeal is mainly on the ground that as the constitutional validity of Section 115 BBE of the [2024:RJ-JD:33194-DB] (3 of 3) [CW-12971/2024] Income Tax Act was under challenge, the appellate authority ought not to have proceeded with the matter and stayed its hand still decision of the petition. 7. Vide interim order dated 15.01.2021, this Court had directed that no coercive steps shall be taken against the petitioner for recovery of the disputed amount. 8. Be that as it may, even if the appeal has been dismissed upholding the assessment order, as long as the interim order dated 15.01.2021 is continuing, no recovery can be made against the petitioner. 9. It is only in the eventuality that the writ petition is dismissed, the order passed in appeal would take effect and it would be open for the respondents to proceed with the recovery. 10. Therefore, in these circumstances, we are not inclined to keep this petition pending but to dispose off the same with liberty to revive, in case the petitioner does not get any relief in the pending writ petition being D.B. Civil Writ Petition No.13656/2021. 11. It needs no clarification that the respondents would be bound by the interim order dated 15.01.2021, meaning thereby that even though the appeal has been dismissed, no coercive action can be taken against the petitioner for recovery of the disputed amount pursuant to the assessment order. 12. The writ petition is disposed off accordingly. (MADAN GOPAL VYAS),J (MANINDRA MOHAN SHRIVASTAVA),CJ 6-pooja/- "