9911796707
TMI Blog2009 (7) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1946 for a sum of Rs. 20,000 out of her stridhan. 5. It has been further stated that the name of the late Panna Bai was also registered with the Baidyabati municipality assessment list for the year 1951-52 as the owner of the aforesaid premises. From the writ petition it also appears that at that point of time she was the partner of M/s. Hari Prasad Agarwala and Co. and operated her business from the said premises. 6. According to the writ petitioner, the municipal record would demonstrate that Panna Bai was the owner of the property in question. In this regard, the writ petitioner has referred to the Baidyabati municipality assessment list for the years 1951-52 and 1961-62, which have been annexed to the writ petition. 7. It was also stated that the property in question was assessed to wealth-tax for the assessment year 1966-67 in the hands of Panna Bai of 24B, Nimtolla Ghat Street, Kolkata, by the Wealth-tax Officer, "B" Ward. The order of assessment also mentioned about previous assessment of the said property. The said assessment included other assets, being movable property as per return and jewellery. 8. It has also been contended that the wealth-tax assessment orders f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It has been further stated that a certified copy of the municipal assessment of the sale deed was submitted to the Tax Recovery Officer, Hooghly on April 23, 1992, which made it clear that the property belonged to the deceased Panna Bai and it neither stood in the name of Dwarka Prasad Agarwala nor was it gifted at any point of time. 12. Learned senior advocate, appearing on behalf of the writ petitioner, submitted that the Tax Recovery Officer, all on a sudden on April 15, 1996, issued an order of attachment in the name of Panna Devi (Bai) Agarwala, in respect of the said property for recovery of the income-tax dues of Dwarka Prasad Agarwala, who had by that time already died. 13. On April 17, 1996, the Tax Recovery Officer proceeded to issue a proclamation of sale and in the schedule of property forming part of the said proclamation, the said property was described as "H. P. of Smt. Panna Devi Agarwala, w/o. the late Dwarka Pd. Agarwala, 13, Kalipukur Road, Sheoraphully, Hooghly." 14. It has also been contended by the writ petitioner that an objection was filed in respect of the proposed sale, but the Tax Recovery Officer proceeded to hold auction in which respondent No. 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the said assessment and consequently held that she was the real owner of the property and as such the sale could not be confirmed in favour of the private respondent No. 4. 18. It has also been contended by the writ petitioner that the private respondent No. 4 herein challenged the Tax Recovery Officer's said order dated January 23, 2004, before this court by filing a writ petition, being W.P. No. 12187 (W) of 2006, on the ground that he was not heard before the order dated January 23, 2004 was passed. The learned senior advocate for the petitioner referred to the order dated June 9, 2006, passed by this court in W. P. No. 12187 (W) of 2006, whereby this court was pleased, inter alia, to set aside the order dated January 23, 2004 and directed the Tax Recovery Officer to give a reasoned decision after hearing all affected parties including the writ petitioner and respondent No. 4. 19. On behalf of the writ petitioner it was submitted that the Tax Recovery Officer while passing the impugned order dated August 6, 2007 accepted the fact that Panna Bai had shown the property in her wealth-tax return while holding that Panna Bai was different from Panna Devi Agarwala. It was furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mutated in her name in the municipal records. 22. He also submitted that if there was a question about the source of the money used to purchase the property, that question should have arisen at least half a century ago and it was the usual procedure of the Revenue authorities to look into the source of the money whenever an assessee disclosed acquisition of property in the return to find out whether such acquisition had been made out of disclosed and taxed income or not. He further submitted that in the instant case, curiously enough, the question of benami was raised in the year 1996 and that too before the High Court, fifty years after purchase of the property in question and more importantly, after both Dwarka Prasad Agarwala and Panna Devi Agarwala had died. 23. He also submitted that both Dwarka Prasad Agarwala and Panna Bai/Panna Devi Agarwala were tax assessees, the source of the money used for purchase of the said property could not be an open question fifty years after the purchase, particularly when the said property was admittedly assessed to tax. He submitted that the plea of benami was an after thought and is quite evident from the fact that even in the year 1992 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not the Panna Bai/Panna Devi who filed the wealth-tax returns disclosing amongst her other assets the said property as part of her wealth. According to him, the respondent authorities cannot now so contend about Panna Bai being a non-existent and fictitious person, seventeen years after the demise of both Panna Devi Agarwala and Dwarka Prasad Agarwala and sixtyone years after the purchase of the property, and that too on the basis of materials collected behind the petitioner's back and without disclosing the same to him in course of the proceedings or affording him any opportunity to controvert or deal with such materials. 27. Relying on the deed dated March 13, 1946, he also submitted that there was no doubt that Panna Bai was described as the wife of Dwarka Das Agarwala. Panna Bai was not a signatory to the said deed which was executed by the vendor alone. The deed was written in the Bengali vernacular and the slip with regard to the middle name went unnoticed. He also submitted that the deed correctly gave the address as Sheoraphully, Hooghly. Considering that Panna Devi Agarwala, the wife of Dwarka Prasad Agarwala, had all along shown and dealt with the said property as her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as regards possession and the Tax Recovery Officer cannot decide intricate questions of law as the title of the property. He further submitted that the question of benami can only be adjudicated in a suit upon appreciation of evidence and cannot form subject-matter of a summary investigation. 31. He also submitted that if the claimant adduces evidence to show that he was possessed of the property under some kind of a title, the property would have to be released from attachment. He submitted that in the order dated September 11, 2003, passed in the earlier writ petition, being C. O. No. 8094 (W) of 1996, the court never conferred such jurisdiction upon the Tax Recovery Officer which he did not have under the statute of which he was a creature. He further submitted that in the instant case, the petitioner has shown that his mother was possessed of the said property under the deed as owner thereof. The petitioner had also shown that the property was subjected to wealth-tax in his mother's hand and was also mutated in her name in the municipal records. The petitioner had further shown that she was receiving rent in respect of the said property and paying income-tax. In such circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warka Prasad Agarwala in his life time. The learned senior advocate also submitted that the Tax Recovery Officer had determined the issue with regard to benami transaction on the basis of the clear direction of the High Court contained in the order dated September 11, 2003, passed in C. O. 8094 (W) of 1996 and upon duly complying with the directions given by the High Court in the subsequent order dated June 9, 2006, passed in W. P. No. 12187 (W) of 2006 and hence there was no scope for any doubt in respect of the observation of the Tax Recovery Officer that the transaction was benami. He further submitted that the Tax Recovery Officer had correctly come to the final conclusion that the property could be auctioned for the recovery of the outstanding demand of Dwarka Prasad Agarwala as per the provision of rule 11 of the Second Schedule to the Income-tax Act, 1961, and had, therefore, rightly rejected the claim of the writ petitioner-Vishwanath Agarwala. 33. The learned advocate appearing on behalf of the private respondent No. 4, Kanhaiya Lal Bhagat, essentially supported the stand taken by the learned advocate appearing on behalf of the income-tax authorities. He also submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, was in accordance with law. The writ petitioner had been filing writ petitions one after another against the order and/or adjudication of the authority, being the Tax Recovery Officer No. I, Hooghly, only in order to frustrate the auction sale. 36. He submitted that the instant writ petition ought to be dismissed, being not maintainable in law, as the alternative remedy by way of filing appeal has not been availed of. Regarding jurisdiction and/or the authority of the Tax Recovery Officer concerned, he submitted that the said authority had acted in accordance with law and disputed question of fact has been raised by the writ petitioner, which cannot be considered and/or gone into by this court, in exercise of its power sitting in high prerogative constitutional writ jurisdiction. He also submitted that the writ petitioner had not availed of the remedy provided in law by filing a civil suit against the auction as provided under rule 11(6) of the Second Schedule to the Income-tax Act. He submitted that although several properties in the district of Hooghly were put to auction for realization of dues of the assessee, but it was only in respect of the property in question, that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benamidar. He further submitted that the Tax Recovery Officer had duly followed the ratio laid down by the Supreme Court in the case of Jaydayal Poddar (Deceased) through LRs v. Mst. Bibi Hazra reported in AIR 1974 SC 171. He submitted that entire aspect of the matter was gone into and was duly investigated by the Tax Recovery Officer who came to the conclusion that the concerned property was benami and the same was purchased in the name of a fictitious person. He, therefore, submitted that the property was liable to be dealt with like all other properties of the defaulter assessee. Finally, he concluded that in fiscal laws, the interpretation postulates strict construction and there was no scope for any imagination, thinking and/or purposive approach to a problem and in the present case the Tax Recovery Officer had dealt with the problem meticulously, literally and following the precincts of tax laws. In this regard, he also relied on the case of Geo Miller Co. P. Ltd. v. State of M. P. reported in AIR 2004 SC 3552 (paragraphs 30 and 31). He, thus, submitted that the order and the decision of the Tax Recovery Officer is quite justified and valid in law. 38. After considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s forged, as proved by the field enquiry conducted by the inspector. Therefore, the Tax Recovery Officer came to the conclusion that Panna Bai, the wife of Dwarka Das Agarwala, had no existence. The beneficiary of the property was also Dwarka Prasad Agarwala as per deposition of the tenants. Upon the death of Dwarka Prasad Agarwala, his heirs were enjoying their interest in the property and the filing of application before the High Court against the attachment and auction of the property, standing in the name of a fictitious benamidar, proves the interest of the heirs, i.e., interest of Dwarka Prasad Agarwala in the property. If Panna Bai and Panna Devi was the same person, the name of the husband must be Dwarka Das Agarwala as per the purchase deed of the disputed property, whereas the name of husband of Panna Devi Agarwala is Dwarka Prasad Agarwala. Therefore, the Tax Recovery Officer held that Panna Bai, Panna Devi and Panna Devi Agarwala could not be the same and identical person and proceeded to reject the claim of the writ petitioner, as raised in his letter dated July 9, 2007. The Tax Recovery Officer also specifically observed that the explanation as to why Panna Bai, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Agarwala) against the order dated September 11, 2003. In fact, he submitted to the jurisdiction of the Tax Recovery Officer and an order was passed by the Tax Recovery Officer on January 23, 2004 which was subsequently set aside by the order dated June 9, 2006 passed by the writ court in W. P. No. 12187 (W) of 2006 at the instance of Kanhaiya Lal Bhagat, being respondent No. 4 herein. It is noticed that while disposing of W. P. No. 12187 (W) of 2006 the court observed, inter alia, as follows : "In the order of this court dated September 11, 2003 it was specifically mentioned that the authority should give the decision regarding confirmation of sale of the property after considering the materials placed by the parties. There is no dispute that in the auction held by the authorities the petitioner purchased the property in question on May 22, 1996. There is no dispute either that in the writ petition in which the order dated September 11, 2003 was made the petitioner was a respondent. In paragraph 6 of the writ petition it has been specifically alleged that before making the impugned order dated January 23, 2004 the Tax Recovery Officer had not given any notice to the petitioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd by the specific directions given by the court in W. P. No. 12187 (W) of 2006 and the earlier order passed by the court at the instance of the writ petitioner herein in C.O. No. 8094(W) of 1996 on September 11, 2003, the order of the Tax Recovery Officer, by no stretch of imagination, can be said to be an order without jurisdiction or that the question of benami could not be gone into by the Tax Recovery Officer. In fact, in the order dated September 11, 2003, the writ court had specifically directed the income-tax authorities to take a final decision in respect of the property-in-question, which included the banamidar aspect, as well. The directions given by the High Court in the two orders made it clear that it was incumbent and obligatory upon the Tax Recovery Officer to decide the matter in terms of such directions given by the court. The contention of the writ petitioner, while relying on the judgment of the Supreme Court in the case of TRO v. Gangadhar Vishwanath Ranade (Decd.) [1998] 234 ITR 188, that the Tax Recovery Officer could not go into the question of benami since he had limited jurisdiction under rule 11 cannot stand to any reason in view of the two earlier orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 281 of the Income-tax Act, as then in force, on the assessee. The Income-tax Officer held an inquiry, recorded evidence and passed an order dated May 9, 1974, declaring, inter alia, that the transfer in favour of the wife of the assessee and his daughter of the said immovable property was void as against the Department under section 281 of the Income-tax Act. This decision was the subject-matter of challenge in an earlier proceeding before the Bombay High Court. The Bombay High Court in the earlier writ proceedings by its judgment and order dated January 9, 1981 held that the proceedings taken pursuant to the declaration or expression of an opinion by the Income-tax Officer or authority under section 281 of the Act were a mere prelude to the procedure for recovery of tax and the order of the Income-tax Officer dated May 9, 1974 did not, in any way, affect the rights of the parties pertaining to the said property which could be considered in proceedings under rule 11. Consequent thereto, the Tax Recovery Officer passed an order dated September 17, 1981 and overruled the objections and declared that the mortgage, trust deed and conveyance were illegal and void and the said property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not only the question of possession but also the question of title could be gone into. It may, however, be noticed that the judgment was rendered by the Supreme Court prior to the amendment of the Code of Civil Procedure, 1908, which was brought about by Act 104 of 1976. In my opinion, the limited scope of enquiry of the Tax Recovery Officer while proceeding to exercise his jurisdiction under rule 11 may be akin to the scope of enquiry under Order 21, rule 58 of the Code of Civil Procedure, 1908 (as it stood prior to the 1976 amendment), but that does not take away his power or authority to investigate under rule 11 to come to a finding with regard to a property being in the nature of a benami transaction, for the purpose of sale by auction of that benami property for recovering the outstanding demand of the assessee. The judgment of the Supreme Court in Sawai Singhai Nirmal Chand's AIR 1969 SC 1068 case, therefore, is not of much assistance to the writ petitioner, in the facts of the instant case. 45. The contention of the writ petitioner that the order of the Tax Recovery Officer dated August 6, 2007 cannot even stand the test of scrutiny because it was passed in violation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation postulates strict construction. In my view, if one merely glances through the provisions of the various sub-rules under rule 11, it becomes apparent that the Tax Recovery Officer is duly empowered to investigate any claim or objection in connection to attachment or sale of a property in the manner set out therein. In the instant case, it is seen that the Tax Recovery Officer has not made the slightest deviation from the strict letters of law which govern his power and jurisdiction under rule 11. 47. However, in my opinion, the writ petitioner is not without any remedy. 48. Rule 11(6) of the Second Schedule to the Income-tax Act, 1961 reads as follows : "(6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute ; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive." 49. The above rule gives ample scope and provides adequate statutory protection to the writ petitioner to establish the right which he claims to the property in question by instituting a civil suit. The writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
