Sh. Gurcharan Singh v. Petitio

Gurbax Singh2017.08.16 10:57 IN THE HIGH COURT OF PUNJAB AND HARY ANA: Acb 3e47-c7 |2017.08.16 10:57CHANDIGARH. CWP? No. 14318 of 2017 Date of decision: 06.7.2017. Sh. Gurcharan Singh Vs. ..... Petitio Principal Commissioner of Income Tax-1l and others ..... Responden CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTALHON’BLE MR. JUSTICE AMIT RAWAL, Present: —Mr. Rajiv Joshi, Advocate for the petitioner.Ajay Kumar Mittal,J. 1.Prayer in this petition filed under Article 226 of the|Constitution of India is for quashing the attachment order dated|06.02.2017, Annexure P.9 read with letter dated 15.03.2017, AnnexureP.10 whereby pension account of the petitioner has been attached and|recovery of alleged tax liability has been ordered against Protective|Assessment vide order dated 28.03.2016, Annexure P.1/D. Further|prayer has been made for quashing the order dated 20.06.2016 and_order dated 15.12.2016 passed by respondent Nos.2 and 1 respectively. D.A few facts relevant for the decision of the controversy|involved as narrated in the petition may be _ noticed. Thpetitioner/assessee was a bank employee during the financial year|2007-08 relevant to the assessment year 2008-09. He filed his return at the relevant time with the Income Tax Office at the place of his|employment. The petitioner was having family agricultural income| from his ancestral agricultural land. The petitioner along with other|persons entered into an agreement to sell dated 5.5.2005 with one Sh.Gurdial Singh, resident of Jalandhar, who himself and as GPA of his|family members, agreed for the sale of a piece of Agricultural land|measuring 787 Kanal 6 Marlas for a total consideration of|e2TAcrores. An advance money ofz10 lacs was paid to the vendor. Theland was intended to be purchased along with agricultural implements,irrigation system, Haveli etc for agricultural purposes only. The vendorresiled from the agreement as he entered into an agreement with|another person for a better sale consideration. The petitioner had to filea civil suit to protect his interest. The suit was decreed and individual|sale deeds were got executed as ordered by civil court in the suit for|specific performance. Respondent No.2 issued notice to the petitioner|under Section 148 of the Income Tax Act, 1961 (in short, “the Act”)|dated 20.03.2015, Annexure P.1/C without recording any reasons.|According to the petitioner, the proceedings under Section 147 by|issue of notice under Section 148 of the Act are prima facie wrong in|view of the fact that he was only an employee at the relevant time and|he could not engage himself in any business of profit. The petitioner|filed return under protest declaring income of<2,34,075/- against thenotice issued under Section 148/142 (1) of the Act. Respondent No.2|passed the assessment order dated 28.03.2016 whereby the net taxableincome was assessed and computed wrongly asY1,39,64,325/-.Respondent No.2 proceeded to pass this order as_ protectiveassessment. The petitioner asserts that he was only purchaser of the|land for a consideration of27 lacs. Besides the inter se disputebetween the parties and the judgment and decree of the civil suit| against the petitioner, in another civil suit, the petitioner had to refund|4 sum ofz60 lacs to Lakhvir Singh, which had also been ignored to make a hypothetical addition of the said amount to the income of the|petitioner from other sources. There was nothing on record to suggest|that the purchase of land in question was not for agricultural purposesand for self cultivation. The petitioner filed an application under|section 220(3)/(6) of the Act before Income Tax Officer, Hoshiarpur,praying for stay of the demand. Vide order dated 20.06.2016,|Annexure P.3, the application was disposed of in terms of order dated|20.06.2016 passed by the Income Tax Officer, Hoshiarpur. Vide order|dated 20.6.2016, an onerous demand was raised to pay 15% of the|demand relatable to the addition substantively made in the case of the|petitioner. Thereafter, the petitioner filed an application for stay beforethe Commissioner of Income Tax, Jalandhar. Vide order dated|15.12.2016, the Commissioner of Income Tax upheld the order of the|Assessing Officer dated 20.06.2016. An assessment order in the case|of AOP named as AOP comprising Sh. Gurcharan Singh and Tehal|Singh through Shri Gurcharan Singh son of Sh. Ram Singh was passedsubstantively vide order dated 22.03.2016. According to the petitioner,the orders of protective assessment are passed only with a view to|shield the taxation authorities from the laws of limitation, so that tax.recovery may not be time barred due to the pendency of some civil|case or any other reasons. However, being a protective assessment and|a high pitched assessment under the Act, such an order ought to have|been stayed for the recovery of demand by the Assessing Officer|himself. The petitioner availed of his statutory remedy of appeal beforethe jurisdictional authority. In revision of the order passed by the| AssessingOfficer,thejurisdictionalauthority1.e.PrincipalCommissioner of Income Tax failed to appreciate that the assessment|in this case being a highly pitched assessment and protective|assessment, the same was liable to be stayed for its recovery.|Subsequent to the order dated 28.03.2016 passed by the Assessing|Officer, the latter wrote to the Branch Manager, Punjab and Sind Bank,Garshankar on 06.02.2017 whereby he attached the bank account ofthe petitioner for the recovery ofy1,28,98,710/- and respondent No.3was directed under Section 226 (3) of the Act to make payments of theamount due on account of the income tax, penalty etc from the pensionaccount of the petitioner directly to respondent No.2. The petitioner|received a letter dated 15.03.2017(Annexure P.10) from respondent|No.3 whereby he was apprised about the withholding/attachment of thepension account. Hence, the instant petition before this Court by the|petitioner. 3.We have heard learned counsel for the petitioner 4According to the petitioner, the action of respondent No.2in attaching his account for making recovery of amount is illegal,|arbitrary and is liable to be quashed as attachment of the pension|account is violative of provisions of Section 11 of the Pensions Acct,1871 (in short, “the Pensions Act’). 5.Learned counsel for the petitioner had relied upon Section11 of the Pensions Act to submit that pension account could not be|attached for recovery of tax. Section 11 of the Pensions Act reads|thus:- “No pension granted or continued by Government on|political considerations, or on account of past Services or present infirmities or aS a compassionate allowance, and|no money due or to become due on account of any such|pension or allowance, shall be liable to seizure,|attachment or sequestration by process of any court at the|instance of a creditor, for any demand against the|pensioner, or in Satisfaction of Decree or Order of any|such court. | This Section applies to pensions granted or continued|after the separation of Burma from India, by the|Government of Burma.” 5.Learned counsel for the petitioner had relied upon Section11 of the Pensions Act to submit that pension account could not be|attached for recovery of tax. Section 11 of the Pensions Act reads|thus:- “No pension granted or continued by Government on|political considerations, or on account of past Services or present infirmities or aS a compassionate allowance, and|no money due or to become due on account of any such|pension or allowance, shall be liable to seizure,|attachment or sequestration by process of any court at the|instance of a creditor, for any demand against the|pensioner, or in Satisfaction of Decree or Order of any|such court. | This Section applies to pensions granted or continued|after the separation of Burma from India, by the|Government of Burma.” 6.A perusal of the above provisions clearly spells out that|no pension granted or continued by Government on_ politicalconsiderations or on account of past services or present infirmities or aS a compassionate allowance shall be liable to seizure, attachmentor |sequestration by process of any court at the instance of the creditor for|any demand against the pensioner or in satisfaction of decree or order|of any such court. The present is a case of sovereign dues which wouldnot fall in any of the categories enumerated therein which are free fromattachment. In other words, the attachment with which we are|concerned in the present case was neither by a creditor nor founded|upon a decree or order of the Court. It is thus, not of the nature|contemplated by Section 11 of the Pensions Act. Learned counsel for|the petitioner has not been able to show as to how his case is covered|by the above provision. Further, the Assessing Officer vide order dated|20.6.2016 (Annexure P.3) and the Commissioner of Income Tax vide|order dated 15.12.2016 (Annexure P.5) have stayed the demand|relatable to additions made to income of the petitioner on protective| basis and directed the recovery of 15% of the amount due on the|addition made to the income on substantive basis as per the provisionsof the Act. 7.Learned counsel for the petitioner has not been able to|point out any error in the impugned order passed by the respondent|authorities on the stay application or to substantiate his claim that his|case iS covered by Section Il of the Pensions Act. Consequently,|finding no merit in the petition, the same is hereby dismissed. (Ajay Kumar Mittal)Judge July 06, 2017) Whether speaking/reasonedWhether reportable (Amit Rawal)JudgeYesYes.