Wp/107200/2018 Of M/S. Lakshmi Picture Palace v. Income Tax Officer, Ward -2

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 21 DAY OF DECEMBER, 2018 BEFORE THE HON’BLE MR. JUSTICE R DEVDAS -WRIT PETITION NO.107200/2018(TIT) BETWEEN: M/S LAKSHMI PICTURE PALACE A PARTNERSHIP FIRM HAVING ITS OFFICE AT HAMPI ROAD, HOSAPETE-583203, REP.BY ITS PARTNER MS.P.V.AMRUTHALAKSHMI. ... PETITIONER (BY SRI.P.V.GUNJAL, ADV.) AND: 1. INCOME TAX OFFICER, WARD-2, AAYAKAR BHAVAN, M.J.NAGAR, 1 CROSS, DAM ROAD, HOSAPETE-583 203. AAYAKAR BHAVAN, M.J.NAGAR, 1 CROSS, DAM ROAD, HOSAPETE-583 203. 2. THE BRANCH MANAGER, CANARA BANK, J.M.BUILDING, 942, FIRST FLOOR, OPP.NEW BUS STAND, STATION ROAD, HOSAPETE-583203. 3. MS. P.V.SHEELA, AGED ABOUT 41 YEARS, MR.C.P.YOGESHWARA, HAMPI ROAD, HOSAPETE-583 203. (BY SRI.Y.V.RAVIRAJ, ADV. FOR R1 AND R2) ... RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED NOTICE F.NO.226(3)/ITO/W-2/HPT/2017-18 DATED 22.10.2018 ISSUED BY RESPONDENT NO.1 AS PER ANNEXURE-A TO THE WRIT PETITION. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING: ORDER R.DEVDAS J., (ORAL): Petitioner is a partnership firm comprising three partners namely, Ms.P.V.Amrutha Lakshmi holding 40% share, Ms.P.V.Sheela holding 30% share and Ms.Swetha V.Pathikonda holding 30% share. The partnership firm in carrying on the business of exhibition of films. 2.In the matter of assessment of income tax with respect to respondent No.3, who is one of the partners of the firm, as stated above, respondent No.1, invoked the provisions of Section 226(3) of the Income Tax Act, 1961 calling upon the petitioner-firm to pay Rs.2,36,62,293/-, which is said to be due from respondent No.3 to the Income Tax Department. However, after verification of the income tax return filed by the partnership firm, it was found by the Assessing Authority that the partnership firm is liable to pay a sum of Rs.2,54,083/- only to respondent No.3 and therefore, the impugned notice dated 22.10.2018, at Annexure-A was issued under Section 226(3) of the Income Tax Act, 1961 to the Branch Manager of respondent No.2-Bank freezing the account of the petitioner-firm. 3.During the course of these proceedings, the petitioner was permitted to make a representation to respondent No.1 under Section 226(3)(vi) of the Income Tax Act, 1961. Accordingly, the petitioner made a representation and respondent No.1 has passed an order dated 06.12.2018. The same has been placed on record along with a memo. 4.The learned counsel for the petitioner submits that, though the order passed on 06.12.2018 states that the petitioner is holding Rs.2,54,083/-, payable to respondent No.3, and the petitioner-firm denies the same, the petitioner-firm is willing to pay the said sum to respondent No.1, but reserving liberty to question the same on merits. 5.In the light of the above, the petition is disposed of while permitting the petitioner to pay the said sum as enumerated in the order dated 06.12.2018, while reserving liberty to the petitioner-firm to contest the matter on merits, if so advised. 6.Needless to observe that, respondent No.1 shall withdraw the notice issued to respondent No.2-bank and defreeze the account of the petitioner-firm on receipt of the said amount and allow the petitioner to operate the Bank account. MBS/- Sd/- JUDGE