Smt. Seema Fulfagar V. Union of India & Ors.

CW/11839/2015

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The case involves Smt. Seema Fulfagar, who challenged the legality of demand notices issued by the Tax Recovery Officer, Bikaner, following an assessment order that created a demand of Rs.3,21,05,700 for the assessment year 2012-13. The petitioner argued that her appeal against the assessment order, which included a stay on demand application, was not being considered due to the vacancy of the Commissioner of Income Tax (Appeals) post in Bikaner since June 2015. The Assessing Officer had also rejected her request to keep the recovery proceedings in abeyance until the appeal was decided. The petitioner claimed an exemption under Section 80 IB of the Income Tax Act, 1961, which was denied as she was not the undertaking or enterprise but part of a joint venture. The court, not entering into the merits of the exemption claim due to the pending appeal, proposed a settlement to avoid coercive recovery actions pending the appeal's outcome.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 803055 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 05-01-2016
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: DINESH MEHTA
• Keywords: Appeal Pending; Assessment Order; Demand notice; Exemption Claim; Income Tax; Tax Recovery
• Section: 80-IB

Judgement Text

"SMT. SEEMA FULFAGAR VS. UNION OF INDIA & ORS. (S.B.C.WRIT PETITION NO.11839/15) 1 SMT. SEEMA FULFAGAR VS. UNION OF INDIA & ORS. (S.B.C.WRIT PETITION NO.11839/15) Dated:- 5.1.16. HON'BLE MR.JUSTICE SANGEET LODHA Mr. Dinesh Mehta, for the petitioner. Mr.K.K.Bissa, for the respondents. 1. By way of this writ petition, the petitioner has questioned legality of demand notices dated 4.8.15 and 24.9.15 issued by the Tax Recovery Officer (Income Tax), Bikaner, pursuant to assessment order dated 20.3.15 passed by the Deputy Commissioner, Income Tax, Circle I, Bikaner, creating a demand of Rs.3,21,05,700/- against the petitioner for the assessment year 2012-13. 2. Learned counsel for the petitioner submitted that the petitioner has preferred appeal against the assessment order accompanied by application seeking stay on demand, however, the same are not being considered and decided inasmuch as, since June, 2015, the post of Commissioner of Income Tax (Appeals), Bikaner, is lying vacant. Learned counsel submitted that the application preferred by the petitioner before the Chief Commissioner of Income Tax, Jodhpur seeking directions for early disposal of the appeal has been turned down without assigning any reasons. Learned counsel submitted that the SMT. SEEMA FULFAGAR VS. UNION OF INDIA & ORS. (S.B.C.WRIT PETITION NO.11839/15) 2 Assessing Officer has also rejected the prayer of the petitioner to keep the recovery proceedings in abeyance till the disposal of the appeal vide order dated 16.9.15, without entering into the merits of the case and the petitioner has been directed to deposit 50% of the entire demand immediately. It is submitted that the petitioner has wrongly been denied the claim of exemption under Section 80 IB of Income Tax Act, 1961( for short “the Act”) and therefore, the recovery of the demand raised pursuant to the assessment order deserves to be kept in abeyance. 3. Mr. K.K.Bissa, learned counsel appearing for the Revenue submitted that admittedly, the petitioner had earned profit from the joint venture business as an individual whereas, under Section 80 IB, the exemption is available only to undertaking or enterprise. Learned counsel submitted that the petitioner did not undertake any project on her own rather, the developer company carried out the entire project and therefore, even otherwise, the petitioner is not entitled for exemption. Learned counsel submitted that the Assessing Officer has already stayed 50% of the demand subject to payment of 50% of entire demand by the petitioner and therefore, on the facts and in the circumstances of the case, the petitioner is not entitled for any indulgence by this court. SMT. SEEMA FULFAGAR VS. UNION OF INDIA & ORS. (S.B.C.WRIT PETITION NO.11839/15) 3 4. Admittedly, the appeal preferred by the petitioner against the assessment order passed by the Assessing Officer is pending disposal of the appeal and therefore, this court is not inclined to enter into merits of the case as to whether the petitioner is entitled for exemption under Section 80 IB of the Act as claimed or not. However, taking into facts and circumstances of the case, this court proposed to pass an order in terms that if the petitioner deposits a sum of Rs.1 crore against the demand created, the respondents may not take coercive action against the petitioner for recovery of the remaining demand, pending disposal of the appeal. 5. Learned counsel appearing for the petitioner submitted that petitioner is ready to deposit a sum of Rs.1 crore in two monthly installments of Rs.50 lacs each. Learned counsel submitted that the petitioner shall deposit first installment on or before 31.1.16 and the second installment on or before 28.2.16. 6. Learned counsel appearing for the respondents fairly submitted that the respondents are also agreeable to the order as proposed by the court and accepted by the petitioner. 7. In this view of the matter, the writ petition is disposed of with the directions that if the petitioner deposits a sum of Rs.1 crores in two monthly installments of Rs.50 lacs each, no coercive action shall be taken by the respondents for recovery of SMT. SEEMA FULFAGAR VS. UNION OF INDIA & ORS. (S.B.C.WRIT PETITION NO.11839/15) 4 the remaining demand till the disposal of the appeal preferred by the petitioner pending before CIT (Appeal), Bikaner. The first installment shall be deposited by the petitioner on or before 31.1.16 and the second installment on or before 29.2.16. The CIT (Appeals), Bikaner is directed to decide the appeal preferred by the petitioner expeditiously. No order as to costs. (SANGEET LODHA),J. Aditya/ "