Wp(C)/20243/2009 Of Tax Recovery Officer, Ernakulam v. The Income Tax Ombudsman, Cochin

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 22ND JULY 2009 / 31ST ASHADHA 1931 WP(C).No. 20243 of 2009(A) -------------------------- PETITIONERS: --------------- 1. THE TAX RECOVERY OFFICER, RANGE-I, OFFICE OF THE ADDL.COMMISSIONER OF INCOME TAX, C.R.BUILDING, I.S.PRESS ROAD, ERNAKULAM. 2. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, ERNAKULAM. BY ADV. MR. JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENTS: --------------- 1. THE INCOME TAX OMBUDSMAN, 7TH FLOOR, KERA BHAVAN, SRV H.S.ROAD, COCHIN-682 011. 2. P.PREMKUMAR, LAKSHMI, K.K.VISWANATHAN ROAD, KARUVELIPPADY, COCHIN-5. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON J.~~~~~~~~~~~~~~~~~~~~~~~ W.P. (C) No. 20243 of 2009 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 22[nd] day of July, 2009 JUDGMENT The challenge in this Writ Petition is against Exts.P3 and P6orders passed by the first respondent – Income Tax Ombdusman,whereby the petitioners/department have been directed to lift theattachment over the property in question belonging to the assesseepursuant to the orders passed by the Tribunal in favour of theassessee. The main contention of the department is that, the orderspassed by the Obdusman are beyond the power, competence andjurisdiction. 2. The property belonging to the second respondent/assesseewas attached by the department and an assessment order underSection 158 B C read with Section 158 B D and 143 (3) of the IncomeTax Act was passed. The said assessment order was set aside by theIncome Tax Appellate Tribunal as per order dated 4.6.2008; pursuantto which, the demand was reduced to 'Nil', under which circumstancethe net refund of Rs. 32,33,592/- was also ordered and granted to theassessee. It was in the said circumstances, that the assessee filed apetition before the Tax Recovery Officer for lifting the attachment, whoconsidered the same and passed Ext.P1 order stating that, the requestcould not be considered as the proceedings had not become final. The assessee approached the Commissioner of Income Tax (Central) withthe same request who also turned down the same, as per order dated19.3.2009 holding that the assessment had not become final. 3. Met with the situation, the assessee approached the firstrespondent/Ombudsman, who considered the grievance of the secondrespondent/assessee and passed Ext.P3 order dated 15.4.2009directing the department to cancel and withdraw the attachmenteffected on the assessee's residential property. Observing that theorder passed by the first respondent was not in conformity with Ext.P4guidelines, the same was sought to be reviewed by filing Ext.P5petition, which was considered and rejected by the first respondent asper Ext.P6 proceedings. The petitioners/department are challengingExts.P3 and P6 orders passed by the first respondent stating that, theyare not orders on administrative aspects, but involves interpretation ofprovisions of Section 225 (2) and 225 (3) of the Income Tax Act andhence beyond the scope and jurisdiction of the 1[st] respondent. 4. It has been pointed out from the part of the petitionersparticularly in 'Ground G' of the Writ Petition, that the remedy of theassessee was only by way of filing a 'Writ Petition' before this Court andnot by way of a 'Complaint' before the first respondent/Ombudsman. Itis however conceded by the petitioners that, in the meanwhile, theassessee had approached this Court by filing W.P.(C) No. 17321 of 2009, where interference was made by this Court and the departmentwas directed to lift the attachment (however stating that, the saidjudgment is intended to be challenged by filing Writ Appeal before theDivision Bench). 4. It has been pointed out from the part of the petitionersparticularly in 'Ground G' of the Writ Petition, that the remedy of theassessee was only by way of filing a 'Writ Petition' before this Court andnot by way of a 'Complaint' before the first respondent/Ombudsman. Itis however conceded by the petitioners that, in the meanwhile, theassessee had approached this Court by filing W.P.(C) No. 17321 of 2009, where interference was made by this Court and the departmentwas directed to lift the attachment (however stating that, the saidjudgment is intended to be challenged by filing Writ Appeal before theDivision Bench). 5. The lifting of attachment over the property in question is soughtto be resisted by placing reliance on the appeal preferred by thedepartment against the order passed by the Tribunal under Sec. 260 Astating that, the concerned appeal (ITA No. 419/2009) has alreadybeen admitted on 10.7.2009(Paragraph 1 of the Writ Petition). Withregard to the right of the department to challenge the order passed bythe Tribunal, it is beyond any doubt that there is adequate provisionunder Section 260 A of the I.T. Act to file an appeal before the DivisionBench of this Court within 4 months as prescribed and such appeal isliable to be entertained, if there is substantial question of law.Considering the fact that the concerned order was passed by theTribunal as early as on 4.6.2008, when WP (C) 17321 of 2009 hadcome up for consideration before this Court, the standing counsel forthe department was directed to get instruction as to the pendency of theappeal stated as filed, challenging the order passed by the Tribunal.Eventhough the matter was adjourned on different occasions, thedepartment could not substantiate the pendency of the appeal, norcould even furnish the number of appeal, if it were already numbered. It was in the said circumstance that the judgment was passed in W.P.(C)No. 17321 of 2009 on 1.7.2009holding that, it had to be presumed thatthe order had already become final and in the said circumstances, apositive direction was given to the department to lift the attachment. It isnow conceded in paragraph 1 of the present Writ Petition that, ITA No.419 of 2009 was admitted by this Court only on 10.7.2009, i.e. muchafter the disposal of W.P. (C) No. 17231 of 2009 by this Court. 6. The learned standing counsel for the department submits that,the statutory appeal preferred against the order passed by the Tribunal(ITA 419 of 2009) as well as the appeal stated as preferred against thejudgment passed by this Court in WP (C) No. 17321 of 2009 have beenadmitted also granting interim stay. Since the direction given by thisCourt in W.P.(C) No. 17321 of 2009 was to lift the attachment and sincethe said direction is stated as stayed by the Division Bench of thisCourt, the impugned orders passed by the Ombudsman (Exts. P3 andP6) have lost the significance. This is more so, since the petitionersthemselves have conceded in 'Ground G'as noted above, that theremedy of the assessee could only be by filing a Writ Petition beforethis Court and not by filing complaint before the Ombudsman, whichcourse stands satisfied; in view of the subsequent developments. 7. In the above circumstances, the question, as to whether the 1[st]respondent Ombudsman is having lawful authority to have passed WP (C) No. 20243 of 2009 Exts.P3 and P6 orders and whether the such orders are in conformitywith Ext.P4 guidelines is left open. Interference is declined and the WritPetition is dismissed accordingly. P. R. RAMACHANDRA MENON, JUDGE kmd