Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2020 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 797 - HC - Income TaxRecovery proceedings against trust - family trust - setting aside the attachment and the garnishee notices on the primary ground that the said properties belong to the trust and do not belong to the original petitioner No.1. (trustees) - HELD THAT:- Subject properties do not belong to the original petitioner No.1 Harish R. Laliwala in his individual capacity. If that be the position then the impugned attachment orders in respect of the subject properties issued by respondent No.1 for realisation of the liability of the original petitioner No.1 either in his individual capacity or as Managing Director of M/s. Verma Extrusions Pvt. Ltd. (asseesee company) would be untenable in law and fact. Mr. Suresh Kumar appearing on behalf of the Revenue also fairly submits that pursuant to issuance of the Letters of Administration by this Court to the trustees of the trust, the above position is settled in law that the subject properties stand in the name of the trust and do not belong to the original petitioner No.1 against whom the Revenue has initiated recovery proceedings. He however submitted that the recovery proceedings being civil in nature would however continue against the original petitioner No.1 and his estate in the hands of his legal-heirs and representatives. But in so far subject properties are concerned, he has fairly accepted the position that continuance of the attachment orders would now not be sustainable in law in view of the Letters of Administration issued to the trust. It is evident that the subject properties belong to the trust which was settled by Smt. Sushila R. Laliwala’s Will before initiation of recovery proceedings by the Revenue against the original petitioner No.1. The said properties did not belong to the original petitioner No. 1 or his legal heirs / representatives. The trust being formed in the year 1978 and the Will of Smt. Sushila R. Laliwala made in 1985 much before initiation of recovery proceedings, there is no question of the said properties being diverted to the trust to evade payment of due tax. We set aside and quash the attachment orders dated 27th August 1997 being exhibits ‘O1’, ‘O-2’ and ‘O-3’ in respect of the subject properties. The demand notice dated 20th January 1994 being exhibit ‘L’ and six garnishee notices issued under Section 226 (3) of the Act being exhibits ‘R-1’ to ‘R-6’ to the Petition would also stand interfered with. Revenue is free to pursue proceedings against the estate of original petitioner No.1 in the hands of his legal-heirs and representatives in accordance with law in so far as the order dated 15th December 1993 under Section 179 (1) of the Act is concerned.
|