TMI Blog2016 (9) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... , proceeding has to be initiated and certificate has to be issued by the Tax Recovery Officer, declaring the petitioner as defaulter, and only then, the order of attachment of immovable property of the petitioner could be effected. Writ Petition is allowed, and the first respondent/Tax Recovery Officer is directed to pass appropriate orders for lifting the order of attachment of the immovable property of the petitioner, and return the original documents given as surety to the second respondent, vide letter, dated 04.09.2012, and pass necessary consequential orders with due intimation to the Sub Registrar, Neelankarai - Writ Petition No.26821 of 2016, W.M.P.Nos.23051 and 23052 of 2016 - - - Dated:- 14-9-2016 - Mr. Justice T.S. Sivagnanam For the Petitioner : Mr.R.Sivaraman For the Respondent : Mr.T.Ravikumar Senior Standing Counsel for Income Tax Department O R D E R The petitioner is a Private Limited Company, and they filed this Writ Petition, challenging the order of attachment of the immovable property, passed by the first respondent/Tax Recovery Officer, under the provisions of the Income Tax Act, 1961 (hereinafter, referred to as 'the Act') da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Appeals -I) and the entire penalty was deleted. Therefore, the demand raised by the second respondent had substantially reduced to nil. iv) Therefore, it is the contention of the petitioner that the order of attachment effected by the first respondent on the immovable property does not survive. Pursuant to the order passed by the Commissioner of Income Tax (Appeals -I), the second respondent/Assessing Officer passed a consequential order, dated 27.09.2013, giving effect to the order of the Commissioner of Income Tax (Appeals-I). v) Challenging the order passed by the Commissioner of Income Tax (Appeals -I), the petitioner as also the Revenue Department filed Second Appeals before the Income Tax Tribunal 'C' Bench, Chennai (for short, ITAT). The ITAT, by order, dated 26.06.2015, allowed the Appeal filed by the petitioner and dismissed the Appeal filed by the Revenue Department. As a consequence thereof, the second respondent passed orders, dated 08.09.2015 and 14.09.2015, giving effect to the order of ITAT. In terms of giving effect to the order of ITAT for the aforesaid three assessment years, the demand of tax in respect of the assessment year 2009-10 was Nil, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that, where a certificate has been drawn up, and subsequently, the amount of the outstanding demand is reduced as a result of an Appeal, or other proceeding, under the Act, the Tax Recovery Officer shall, when the order, which was the subject matter of such Appeal, or other proceeding has become final and conclusive, amend the certificate, or cancel it, as the case may be. Placing emphasis on the words final'' and ''conclusive'', it is submitted that the order passed by ITAT has not attained finality, and it has not become conclusive, as the Department as filed Tax Case Appeal before this Court, under Section 260 A of the Act, and the same is to be numbered shortly, as there is a delay in re-presenting the papers. Therefore, it is submitted that, as long as the order passed by ITAT has not become final and conclusive, the question of raising the attachment does not arise. 6. Further, it is submitted by the learned Senior Standing Counsel that the procedure under Rule 12 of second schedule to the Act has to be followed, and such a contingency would arise only after finality is arrived at the proceeding, and therefore, the prayer sought for by the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery Officer may issue a certificate, specifying the amount of arrears due from the assessee, and shall proceed to recover from such assessee, the amount so specified, by one or more of the modes, which includes attachment and sale of the assessee's immovable properties. The second schedule sets out the procedure for recovery of tax. Therefore, the action, that is required to be taken prior to the property being attached is that, the Tax Recovery Officer should issue a certificate that the assessee is in default. 11. In Sri Mohan Wahi's case (supra), a house property, owned by one late B.P. was the subject matter of attachment, and the proclamation of sale was issued for sale of the property, and the property was sold and the highest bidder deposited the money. The widow of the owner of the property filed a Suit to restrain the sale, claiming that the shares of two of her sons could not have been attached, and advertised for sale. In the said Suit, order of interim injunction was granted by the Civil Court, as a result of appellate and other proceedings, all the demands against the Firm stood wiped out and reduced to nil. Therefore, the assessee addressed the Income Tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother matter for the Department to proceed in Appeal, and the Department is always at liberty to proceed for recovery, if they succeed in the Appeal before the Court. The provisions of Section 225(2) of the Income Tax Act,1961, gives a mandate to Tax Recovery Officer to pass appropriate orders based on the orders passed in Appeal, or other proceedings. 13. In such view of the matter, the first respondent Tax Recovery Officer is directed to pass necessary orders, consequent to the proceedings of the Assistant Commissioner of Income Tax, Circle XIV, accepting the order of the Tribunal. Taking note of the nil payment insfor as the assessee for all the assessment year, the Tax Recovery Officer has to release the property from attachment in terms of the order of the Tribunal, and consequent to the order of the Assistant Commissioner of Income Tax, Circle XIV. The Writ Petitions are allowed as above. No costs. 14. The learned Senior Standing Counsel for the Revenue pointed out that, in the decision rendered in Sri Lakshmi Brick Industries (supra), the Court did not interpret the expressions ''final'' and ''conclusive'', and therefore, the said d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. As on date, the Tax Recovery Officer has not issued such a certificate. Even assuming that the Tax Case Appeal filed by the Revenue is entertained, that by itself, will not make the petitioner as an assessee in default, on account of the fact that the entire tax liability is wiped of pursuant to the order of ITAT. 19. Assuming further that the Revenue succeeds in the Tax Case Appeal, automatically, the assessee will not be treated as defaulter, since the consequential orders have to be passed, notice of demand have to be issued, time has to be granted, thereafter, proceeding has to be initiated and certificate has to be issued by the Tax Recovery Officer, declaring the petitioner as defaulter, and only then, the order of attachment of immovable property of the petitioner could be effected. Furthermore, the decision in the case of Sri Lakshmi Brick Industries (supra) was challenged by the Revenue, by way of Writ Appeal, being Writ Appeal No.1527 of 2013 and it is pending, and it is submitted that the issue involved in the Writ Appeal has become infructuous. 20. Thus, the decision of this Court in the case of Sri Lakshmi Brick Industries (supra) being the jurisdictional Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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