VALLEY ESTATE V. THE AGRICULTURE INCOME TAXE OFFICER

WP(C)/28373/2011

AI Insights

The case involves Valley Estates, a partnership firm, which challenged the revenue recovery proceedings for agricultural income tax dues for the years 1986 and 1987. The petitioner argued that the firm was assessed as an unregistered entity, leading to a higher tax liability on the firm as a whole, rather than apportioning it among the partners as would be the case if assessed as a registered firm. The court had previously directed the Assessing Officer to redo the assessment as a 'registered firm'. The main legal contention was whether the subsequent assessments and the recovery proceedings were correctly applied following the court's earlier judgment.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 699520 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 25-08-2014
• Assessment Year: misc
• Other Referred Cases: OTC NO. 26/2005, O.P NO. 1166/1998
• Laws Referred To: Agricultural Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: BOBBY JOHN
• Assessee Lawyers: RAMESH JOHN
• Keywords: Agricultural income-tax; Assessment; Liability to pay tax; Revenue recovery; Unregistered Partnership Firm; Registered Partnership Firm
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 25TH DAY OF AUGUST 2014/3RD BHADRA, 1936 WP(C).No. 28373 of 2011 (V) ---------------------------- PETITIONER : --------------------- VALLEY ESTATES, THEKKETHATTIL, KEEZHUKUNNU, KOTTAY AM REP. BY MANAGING PARTNER SANTHAMMA ABRAHAM. BY ADV. SRI.RAMESH CHERIAN JOHN RESPONDENT(S) : ---------------------------- 1. THE AGRICULTURAL INCOME TAX OFFICER, SULTHAN BATHERY, W AYANAD DISTRICT. 2. THE TAHASILDAR (REVENUE RECOVERY), AMBALAVAYAL, IRULAM, SULTHAN BATHERY R1 & R2 BY GOVT. PLEADER SRI. BOBBY JOHN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 28373 of 2011 (V) APPENDIX PETITIONERS' EXHIBITS : -------------------------------------- EXHIBIT-P1- TRUE COPY OF THE ORIGINAL ORDER OF ASSESSSMENT DATED 24/06/1991. EXHIBIT-P2- TRUE COPY OF THE JUDGMENT IN OTC NO. 26/2005 DATED 21/07/2005. EXHIBIT-P3- TRUE COPY OF THE REVISED ORDER WHICH IS A COMMMON ORDER FOR THE ASSESSMENT YEARS 1987-88 TO 1988-90 DATED 09/05/1995. EXHIBIT-P4- TRUE COPY OF THE JUDGMENT IN O.P NO. 1166/1998 DATED 22/11/2007. EXHIBIT-P5- TRUE COPY OF THE REVENUE RECOVERY NOTICES ALONG WITH NOTICE BEFORE ATTACHMENT. EXHIBIT-P6- TRUE COPY OF THE REVENUE RECOVERY NOTICES ALONG WITH NOTICE BEFORE ATTACHMENT. EXHIBIT-P7- TRUE COPY OF THE LETTER DATED 20/10/2011. RESPONDENTS' EXHIBITS : NIL ----------------------------------------------------------- //TRUE COPY// P.S. TO JUDGE Mn K.Vinod Chandran, J. -------------------------------------- W.P.(C).No.28373 of 2011-V ------------------------------------- Dated this the 25th day of August, 2014 JUDGMENT The petitioner is aggrieved by the revenue recovery proceedings initiated, as indicated in Exhibits P5 and P6, for the agricultural income tax dues for the years 1986 and 1987; which is indicated in the schedule to the demand notices. The petitioner's contention is that the petitioner was a registered partnership firm; but, however, the assessment was completed as an unregistered partnership firm. The petitioner took statutory remedies and eventually, in the revision before this Court, Exhibit P2 judgment was passed, directing the Assessing Officer to redo the assessment as a 'registered firm'. 2. The learned counsel for the petitioner would point out that when a firm is assessed as a registered firm, the liability to pay tax would be apportioned amongst the partners in accordance with their individual shares. However, in assessment as an unregistered firm, the liability would be on the firm, on the entire income so assessed. It is in such circumstance, the WP(C).No.28373 of 2011 - 2 - petitioner challenged Exhibit P1; which concluded in Exhibit P2 judgment. It is the specific averment of the petitioner that nothing has transpired after Exhibit P2 and no further assessment was made, for the assessment year 1986-87. If at all the assessment order has been passed, it can only be on the individual partners and not as against the firm, as is indicated in Exhibits P5 and P6, is the short contention. 3. It is to be noticed that, with respect to agricultural income tax, the income assessed is of the previous year of the assessment year. Hence, the assessment year 1986-87 would take in the income of 1985-86. The income of 1986-87 would be assessed in the assessment year 1987-88. It is not discernible either from Exhibit P5 or Exhibit P6 as to the specific assessment year, to which the revenue recovery authorities have proceeded for recovery. If the petitioner's contention that Exhibit P2 has not been acted upon is correct, definitely it cannot be acted upon at this point of time. But, however, it has to be seen, as to what are the dues with respect to the earlier years and whether the petitioner was assessed as a registered firm or an unregistered firm. This, definitely, would require further clarification from the part of the WP(C).No.28373 of 2011 - 3 - taxation authority. Exhibits P5 and P6 could not be proceeded with, especially since there was an interim order of status-quo passed by this Court at the time of admission of this writ petition. At present Exhibits P5 and P6 cannot be proceeded with, for, there is absolutely no clarity as to the period for which the demand is raised. The respondent too has not thought it fit to file a counter affidavit. The 1st respondent, however, shall be reserved liberty to initiate recovery, if any demand is due as per the assessment passed in any of the years within the limitation period. That shall be done only after a written communication to the petitioner. The revenue recovery proceedings initiated as per Exhibits P5 and P6, however, are set aside. Reserving such liberty to the 1st respondent, the writ petition is disposed of. Sd/- K.Vinod Chandran, Judge vku. ( true copy ) "