Wp(C)/31563/2015 Of N.p. Subair v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR MONDAY, THE 7TH DAY OF DECEMBER 2015/16TH AGRAHAYANA, 1937 WP(C).No. 31563 of 2015 (U) ---------------------------- PETITIONERS : ------------------- 1. N.P. SUBAIR, AGED 51 YEARS, MELAKAM, BISMILLA ROAD, MANJERI-676123 MALAPPURAM. MALAPPURAM. 2. M/S. A.K.FOOD PRODUCTS EAST MOOZHIKKAL, CHELAVOOR P.O., KOZHIKODE. 3. M/S. OJIN BAKES AND RESTAURANTS HAPPY TOWER, MEENCHANDA, KOZHIKODE. 4. M/S. OJIN BAKES NEAR MEDICAL COLLEGE, KOZHIKODE. 5. M/S.OJIN FOODS PVT.LTD. CONVENT ROAD, KOZHIKODE. BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH SMT.O.A.NURIYA SMT.ROSIE ATHULYA JOSEPH KUM.SOUMYA PRAKASH KUM.MEKHALA M.BENNY RESPONDENTS : ---------------------- 1. THE INCOME TAX OFFICER, WARD-1(1), AYYAKAR BHAVAN, KOZHIKODE-673001. AYYAKAR BHAVAN, KOZHIKODE-673001. 2. PRINCIPAL COMMISSIONER OF INCOME TAX, AYYAKAR BHAVAN, KOZHIKODE-673001. BY ADV. SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT BY ADV. SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07-12-2015, ALONG WITH WPC. 31573/2015, WPC. 31579/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: bp WP(C).No. 31563 of 2015 (U) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXHIBIT-P1: TRUE COPY OF THE PROVISIONAL ATTACHMENT ORDER DATED 01.04.2015 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT FOR THE ASSESSMENT YEARS 2012-13, 2013-14 AND 2014-15.01.04.2015 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT FOR THE ASSESSMENT YEARS 2012-13, 2013-14 AND 2014-15. EXHIBIT-P2:COPY OF THE ORDER DT 28/9/2015 ISSUED TO THE PETITIONER BY THE R1 FOR THE ASSESSMENT YEAR 2012-13,2013-14 AND 2014-15.THE R1 FOR THE ASSESSMENT YEAR 2012-13,2013-14 AND 2014-15. EXHIBIT-P3:COPY OF THE INSTRUCTION NO. 8/2004 OF THE TAXMAN. EXHIBIT-P4:COPY OF THE INSTRUCTION NO. 404/22/2004-ITCC DT 5/11/2004 OF THE CENTRAL BOARD OF DIRECT TAXES, NEW DELHI.THE CENTRAL BOARD OF DIRECT TAXES, NEW DELHI. RESPONDENT(S)' EXHIBITS: --------------------------------------- EXT.R2(a):COPY F THE NOTE FILE EVIDENCING THE RECORDING OF REASON BYTHE R2.THE R2. EXT.R2(b):STATEMENT OF ESTIMATED UNDISCLOSED INCOME. //TRUE COPY// P.S. TO JUDGE A.K.JAYASANKARAN NAMBIAR, J.------------------------------- W.P.(C).NOS.31563, 31573 & 31579 OF 2015 -----------------------------------Dated this the 7[th] day of December, 2015 J U D G M E N T The challenge in these writ petitions is essentially against theextension of a provisional attachment that was made in respect of theproperties of the petitioners pending the completion of assessmentunder the Income Tax Act, hereinafter referred to as the 'IT Act', forthe assessment years 2012-13, 2013-14 and 2014-15. The grievanceof the petitioners in the writ petitions is that, while the propertiesbelonging to them were attached in terms of Section 281B of the ITAct, the initial period of six months of attachment of the property hadsince expired, and the proceedings initiated against the petitionersunder the IT Act had still not been completed. It is pointed out thatthereafter, the petitioners were informed that the provisionalattachment was continued for a further period of six months in termsof Section 281B (2) of the IT Act and the proviso thereto. Thepetitioners challenge the said action of the respondents, in extendingthe provisional attachment beyond the initial period of six months onthe ground that the said extension was not preceded by an order of the Commissioner of Income Tax furnishing reasons in writing. 2. I have heard the learned counsel for the petitioners as alsothe learned Standing counsel for the respondents. the Commissioner of Income Tax furnishing reasons in writing. 2. I have heard the learned counsel for the petitioners as alsothe learned Standing counsel for the respondents. 3. The learned Standing counsel for the respondents has filed astatement, wherein, he has produced as Ext.R2(a), a proposal thatwas placed before the Principal Commissioner of Income Tax by theAssessing Officer, wherein, the Assessing Officer, after narrating thefacts that necessitated an extension of the provisional attachmentinitially made of the properties belonging to the petitioners, sought forthe Commissioner's order approving the extension of the provisionalattachment for a further period of six months. Below the saidproposal made by the Assessing Officer, there is an endorsement bythe Principal Commissioner which states that “in view of the abovefacts provisional attachment may be continued for another six monthsin order to safeguard the interest of revenue”. It is the stand of therespondents that the said endorsement by the Principal Commissionerwould answer to the requirement of the proviso to Section 281B (2) ofthe IT Act. On a consideration of the facts and circumstances of the case asalso the submissions made across the bar, I note that there aredecisions of the Gujarat High Court inIlaben Ramanlal Zariwala v. Union of India and Others -[(1979) 118 ITR 852], the MadrasHigh Court inSeshasayee Paper and Boards Ltd. v.Commissioner of Income-Tax and Others - [(2003) 261 ITR 63]and the Delhi High Court in Nimitya Properties Ltd. v.Commissioner of Income-Tax and Others - [(2010) 322 ITR 668 (Del)],which considered the issue of the nature of the orders thathave to be passed by the Principal Commissioner in terms of theproviso to Section 281B (2) of the IT Act. Although the factualsituation in the aforesaid cases are different, I find that in the decisionof the Delhi High Court, the request made by the Assessing Officer tothe Principal Commissioner of Income Tax was more or less on thesame lines as in the instant case, and there also, the Commissionerhad given his approval to the proposal for extension of the period ofprovisional attachment by stating “I have gone through the proposalof the Assessing Officer. In view of the facts mentioned in theproposal, I am satisfied that this is a fit case to extend the provisional attachment up to July 31, 2010. The Assessing Officer shall makeefforts to complete the assessments as early as possible.” The DelhiHigh Court found that the said endorsement of the Commissioner onthe proposal submitted by the Assessing Officer was sufficientcompliance with the requirements of the proviso to Section 281B (2)of the IT Act. Taking cue from the said judgment of the Delhi HighCourt, with the reasoning in which I agree, I am of the view that inthe instant case also, the endorsement by the Principal Commissionerof Income Tax on the report submitted by the Assessing officer can beseen as sufficient compliance with the requirements of the firstproviso to Section 281B (2) of the IT Act. Resultantly, I see no reasonto interfere with the extension of the provisional attachment inrespect of the properties of the petitioners in these writ petitions. Thewrit petitions fail, and are accordingly dismissed. A.K.JAYASANKARAN NAMBIAR JUDGE prp/7/12/15