TMI Blog2019 (8) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... of three years could not be completed for some reason set out therein, then, under the proviso to rule 68B(1) extension of one more year is available for effecting the sale. Rule 68B(2) provides for exclusion of the period during which the demand is stayed by any Court. The period of limitation under Rule 68B(1) for sale of the attached property commences from the date on which the demand of any tax interest, fine, penalty or any other sum for the recovery of which the immovable property has been attached has become conclusive under the provisions of section 245 I or under the provisions of Chapter XX of the I.T. Act. We find it extremely difficult to take the view that the intimation or an acknowledgment u/s 143(1) should be construed as an order giving rise to a demand for the purpose of the applicability of Rule 68B. Under the Income Tax Act, the tax, as such, becomes due and payable only when an assessment order is passed and a liability is created followed with a demand notice u/s 156 The phrase order giving rise to a demand in Rule 68B should be construed as the final assessment order, determining the tax liability of the assessee with interest, fine, penalty or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are filed by the husband and wife respectively in their capacity as the Directors of a Company running in the name of M/s. Shivam Water Treaters Pvt. Ltd. 3. For the sake of convenience, the Special Civil Application No.285 of 2019 is treated as the lead matter. 4. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs: ( A) YOUR LORDSHIPS may be pleased to issue the appropriate writ, order or direction, quashing and setting aside the impugned orders of attachment dated 01.03.2012 and 19.12.2018, order setting proclamation dated 29.10.2018 and 19.12.2018 and proclamation of sale dated 21.12.2018 as being bad, illegal, unjust, unreasonable, arbitrary, violative of the principles of natural justice and contrary to the law. ( B) YOUR LORDSHIPS may be pleased to stay the implementation, operation and execution of Proclamation of Sale dated 21.12.2018 (Annexure- E ) issued by the Respondent pending the admission, hearing and final disposal of this Petition. ( C ) YOUR LORDSHIPS may be pleased to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e I.T Act, 1961 came to be passed by fixing the liabilities upon the directors of the company viz. Shri Gaurav H. Dave Smt. Amiben G. Dave. 2 29.11.2011 R.C. Received for certified demand of ₹ 8,71,86,510/- for A.Y. 2010 ₹ 7,25,920/- for A.Y. 2008-09 from the A.O. Thereafter ITCP-1 issued by the then TRO-8 (Now TRO-4, Ahmedabad) on 29.11.2011 and served upon the assessee on 01.12.2011. 3. 04/01/12 Show-cause notice issued to both the directors for payment of the Self-Assessment Tax u/s. 140A of the Act, for the A.Y. 2010-11. 4. 20.01.2012 Various immovable properties in the name of assessee company and director's name were attached, in ITCP-16 of the Income Tax Act. 5. 06/02/12 Notices u/s. 226(3) of the I.T. Act, 1961 were issued to various debtors and banks of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.04.2013 Order of this Court in SCA No.1866 of 2013 dated 16.04.2013 is reproduced as under:- Learned counsel Shri Tushar Hemani for the petitioner stated that upon representation of the petitioner, the commissioner of Income Tax is in the process of granting installments for payment of tax dues. At this stage, he therefore, under instructions, does not press this petition. Disposed of accordingly. Notice is discharged. 15. 24.07.2013 Payment against second charges of the Income Tax department on the securities offered to the bank and focus on dues of the company towards income tax department for repayment and schedule assessee company's letter dated 24.07.2013. 16. 11.12.2013 12.12.2013 Notices u/s. 226(3) of the I.T Act, 1961 were issued upon various debtors of the assessee company. 17. 30.01.2014 Notices u/s. 226 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Road, Navrangpura, Ahmedabad. Two bank accounts were found and the same were attached, resultant ₹ 1.87 Lakhs was recovered from the banks. During the course of survey proceeding it was stated that books of accounts were with Auditor and same would furnished on 26.02.2018. 27. 22.02.2018 Request for giving installments against payment of IT Dues for Self Assessment Tax for the A.Y. 2010-11 other years filed by the assessee before the Addl. CIT, Range- 4(1), Ahmedabad DCIT, Circle-4(1)(1), Ahmedabad. 28. 26.02.2018 Summons under Rules 83 of the Second Schedule to the Income Tax Act, issued but no one attended in the time given. 29. 22.02.2018 27.02.2018 Notice u/s. 226(3) were issued to all the debtors and bank account details gathered during the survey proceedings. 31. 20.03.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount 1. 23.01.2017 23.07.2019 ₹ 60,2016/- 2. 08/02/18 08/08/23 ₹ 2,93,663/- 3. 08/06/17 08/06/19 ₹ 5,14,861/- 4. 19.12.2017 19.02.2020 ₹ 3,17,487/- Above balances will Fds/guarantees will be collected from the bank as when it's matured 33 29.08.2018 Summons under Rule 83 of the second Schedule to the Income Tax Act, 1961was sent to Shri Gaurav H. Dave Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riate directions to CIT, Circle-8, Ahmedabad to grant permission to pay the arrears of self assessed tax for A.Y. 2010-11 amounting to ₹ 72.49 lakhs with interest of ₹ 4.35 lakhs by 31/03/2019 alongwith release of banks accounts pertaining to CBDT order OM-374/A/III/2011. It is also mentioned that a reference for the same shall be issued to the concerned institutions and banks by appropriate authorities as defined in said CBDT order. He has also received a telephonic call from Mr. Gaurav Dave, Director of the Co. from the Mob. No.9824052338 with a request to ensure that the bank does not delivered any such letter to Income-tax Department. This office has also informed to concern A.O. to take necessary action for launching prosecution against above defaulter for forged letter. 37. 02/05/18 Summons under Rule 83 of the Second Schedule to the Income Tax Act, 1961 were issued to Shri Gaurav H. Dave Smt. Amiben G. Dave on 02.0.2018 to attend in this office on 07.05.2018 at 11:00 AM 11:30 AM but they did not attend in this office on time given in summons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 20.11.2018 for Plot No. 4 to 9, Meghansh Woods, Village Chekhla, TA Sanand. 47. 20.11.2018 ITCP 17 Notice for setting a sale proclamation was issued on 20.11.2018 and served upon the assessee on 05.12.2018 by affixture and E-mail. 48. 28.11.2018 Advertisement for proclamation for sale of immovable property i.e. Vibrant Villa, Village Manipur, TA Sanand published in daily news papers on 30.11.2018 and auction proposed on 20.12.2018. 49. 30.11.2018 Form F (regarding submission of claim/proof of claim by creditors) was submitted before the Interim Resolution Professional (C.A. Hema Manoj Shah, Insolvency Resolution Professional) 50. 04/12/18 I.T.C.P.-17 Notice for setting a sale proclamation for Plot No.10 11, Meghanshwood, Village Chekhla, TA Sanand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property in daily news paper on 22.12.2018 were published and auction for the open plots in vibrant Villa, Village Manipur, TA Sanand proposed on 22.01.2019. (P/44) 9. Thus, the writ applicant is aggrieved by the action of the revenue department putting the attached properties for sale by issue of proclamation for the purpose of recovery of the tax amount due and payable by the Company, in which, the writ applicant is one of the Directors. As noted above, an order under Section 179 of the Act also came to be passed by the Assessing Officer. The order passed under Section 179 of the Act attained finality. The same was not challenged by the writ applicant at any point of time. Submissions on behalf of the writ applicant: 10. Mr. Bhati, the learned counsel appearing for the writ applicant vehemently submitted that the time limit for sale of the attached immovable property having been elapsed, the property should be released from attachment. To fortify his submission, Mr. Bhati has placed reliance on Rule 68B of the Second Schedule to the Act, 1961. According to Mr. Bhati, no sale of immovable property is permissibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (s) giving rise to demand (of any tax, interest etc.) become final, the impugned attachment order [Page No.34 to 37] may be vacated in view of the provisions of Rule 68B(4) of the Second Schedule to the Income Tax Act, 1961 because of the following: 1. The attachment of the above property was made [ITCP-16 dated 01.03.2012 19.12.2018-Page Nos. 34 36] pursuant to the demands [ITCP-l dated 14.10.2011, 29.11.2011 04.12.2018 Page Nos. 98, 100 177] raised from following three orders only and not against the order u/s 143(3) for the A.Y.2010-11 dated 18.03.2013: ( a) Intimation u/s 143(1) dated 11.04.2011 for the A.Y.2010-11 raising demand of ₹ 8,71,86,512/-, which remained unchallenged under Chapter XX and hence became final during F.Yr.2011-12 and ( b) Assessment Order u/s 143(3) for the A.Yr.2008-09 dated 14.12.2010 thereby creating demand of ₹ 7,25,920/-, the above Assessment Order was also not challenged by the assessee company as provided under Chapter XX to the Act and hence final during the F.Yr.2010-11. ( c) Order u/s 220(2) dated 16.10.2018 [Page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged from the date of the order u/s 143(3). 5. The petitioners thereafter never filed an appeal u/s 246A of the I.T. Act, 1961 (Chapter XX) against the order u/s 143(1)(a) due to which the said order became final for the purpose of Rule 68B of the Second Schedule to the Income Tax Act, 1961. 6. Answering to Para-1 of the Synopsis filed by the respondents, section 156 of the IT Act creates a deeming fiction that the intimation u/s 143(1) shall be deemed to be demand notice . Furthermore, a demand notice cannot be issued by the department in absence of an order raising the said demand, reliance is placed on the Hon ble Bombay High Court s decision in the case of Rasiklal Amritlal Doshi vs. A Nundy [42 ITR 35 (Bom)]; which further supports the petitioner's contentions that intimation u/s 143(1)(a) for this purpose is an order'. 7. Answering to Para 2 of the respondent s synopsis; the assessment order u/s 143(3) [Page No. 123] does not even whisper about the unpaid self-assessment tax. The said assessment order merely takes ₹ 21,50,24,470/- as the base for making additions and disallowances. The demand which c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isional attachment can be extended but again the compliance of mandatory conditions laid down therein have not been brought on record. 9. Answering to para 5 of the respondent's synopsis; the judgements in the cases of Rajesh Jhaveri stock broker and Zuari Estate Development will not apply as the above judgements were in the context of re-opening of assessment and for that purpose alone the court has said that the intimation u/s 143(1) of the IT Act is not an Assessment Order'. Order' is a much wider term than Assessment Order and therefore, it cannot with any stretch of imagination be construed that the Supreme Court meant that the intimation u/s 143(1) is not an order. In this connection, judgement of the Delhi High Court in the case of Epcos Electronics Components S.A. v/s UOI (2019) 107 taxmann.com 227 (Del) may kindly be referred to. 10. In pursuance to Para 6; vide the case of EPCO Electronic Components SA vs. Union of India, it is clearly seen that a revision can be made u/s 264 of the IT Act. Revision can only be made against some order'. Therefore, intimation u/s 143(1) is an order. Moreover, heading of section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reover, if the contention of the respondent is accepted, the respondent can keep issuing order u/s.220(2) to beat the limitation period in every case. Submissions on behalf of the Revenue: 12. Mr. Bhatt, the learned senior counsel appearing for the revenue submitted that the document at page-41 of the paper- book is only an acknowledgment of the return filed by the Shivam Water Treaters Private Limited. No variation/prima facie adjustment were made to the income returned by the assessee. In that view of the matter, it cannot be treated as an order giving rise to a demand of any tax, interest, fine, penalty or any other sum... for the purposes of Rule 68B of the Second Schedule to the Act. Since the returned income came to be accepted, there was no question of issuing any demand notice under Section 156 of the Act. 13. In the instant case, after Section 143(1) acknowledgment, the regular assessment took place under Section 143(3) of the Act. The returned income has been taken as the base and further additions have been made by the A0. As against the returned income of ₹ 21,60,24,470/-, ten more additions were made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case, eventually, the intimation under Section 143(1) of the Act stood merged with the scrutiny assessment under Section 143(3) of the Act. 19. In the instant case, the order under which the demand is sought to be recovered had admittedly not become conclusive and therefore, in fact, three years limit itself has not started. 20. Furthermore, order dated 27.12.2017 passed under Section 179 of the Act also provided for the recovery of dues from the writ applicants and time limit as enumerated in the Rule 68B of the Second Schedule has not elapsed. 21. In any view of the matter, Section 220(2) demand has not become final and conclusive, for which a separate order dated 16.10.2018 has been passed. 22. Strong reliance has been placed upon the decision of the Bombay High Court in the case of Rajiv Yashwant Bhale v. CIT reported in 401 ITR 408. Reliance is also placed on the decision of the Kerala High Court in the case of Mohammed Niyas v. CIT reported in (2018) 302 CTR 420(Kerala) . 24. It is pointed out that earlier the auction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt; or ( ii) during the proceedings of attachment or sale of the immovable property are stayed by an order or injunction of any court; or ( iii) commencing from the date of the presentation of any appeal against the order passed by the Tax Recovery Officer under this Schedule and ending on the day the appeal is decided. shall be excluded : that where immediately after the exclusion of the aforesaid period, the period of limitation for the sale of the immovable property is less than 180 days, such remaining period shall be extended to 180 days and the aforesaid period of limitation shall be deemed to be extended accordingly. ( 3) Where any immovable property has been attached under this Part before the 1st day of June, 1992, and the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has also become conclusive or final before the said date, that date shall be deemed to be the date on which the said order has become conclusive or, as the case may be, final. ( 4) Where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Ray vs. CIT , reported in (1991) ITR 634 , the Supreme Court has held as under: Assessment is one integrated process involving not only the assessment of the total income but also the determination of the tax. The ITO has to determine, by an order in writing, not only the total income by also the net sum which will be pay able by the assessee for the assessment year in question and that the demand notice under s. 156 has to be issued in consequence of such an order. The statute does not, however, require that both the computations (i.e., of the total income as well as of the sum payable) should be done on the same sheet of paper, the sheet that is super scribed assessment order . It does not prescribe any form for the purpose. It will be appreciated that once the assessment of the total income is complete with indications of the deductions, rebates, reliefs and adjustments available to the assessee, the calculation of the net tax payable is a process which is mostly arithmetical but generally timeconsuming. If, therefore, the ITO first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(a) was deemed to be a notice of demand under Section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under Section 143(1)(a), the question of change of opinion, as contended, does not arise. 34. The dictum as laid in the aforesaid decision of the Supreme Court is that the expressions intimation and assessment order are mutually exclusive. Assessment is used as meaning sometimes the computation of income; sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer . It is in this context that the Supreme Court took the view that the intimation under Section 143(1)(a) cannot be treated to be an order of assessment. 35. The very same argument as canvassed by the learned counsel appearing for the writ applicant before this Court was canvassed before the Delhi High Court in the case of Apogi International ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be any recourse to bring into existence any order under Section 143(1)(a) of the Act. (See Commissioner of Income Tax vs. Udaipur Distillery Company Ltd., reported in 2004 (267) ITR 358) 37. We may refer to a decision of the Madhya Pradesh High Court in the case of Kamal Textiles vs. Income-Tax Officer , reported in 1991 (189) ITR 339 , wherein it has been held as under: A reading of Clause (i) to Sub-section (l)(a) of Section 143 makes it clear to us that the giving of intimation in terms of that provision is without prejudice to the provisions of Sub-section (2). This expression/phrase is normally used in negotiation of compromise or offers to settle differences cause pacis in order to guard against any waiver of right should they be ineffectual and go off. Thus, where parties in the court agreed that the cause should stand adjourned and without prejudice to either of the parties it would only mean that no harm should result to the rights to either of the parties by reason of his consent to the adjournment at that time. Thus understood, in the present context, the expression shall mean only that an intimation sent to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(1)(a)(i) is not in any such prescribed form. Nevertheless, by the fiction so created, all incidents of the notice of demand shall become applicable even to that intimation, for any statutory fiction must be carried to its logical conclusion. Such being the limited purpose of the fiction, it is difficult to accept the contention that, on issuance of such intimation, the assessment proceedings can be reopened only in terms of Section 147 and the authority is not entitled to proceed under Sub-section (2) of Section 143. We are also not impressed with the argument of learned counsel that the issuance of intimation under Sub-section (1)(a)(i) of Section 143 is final because no appeal is provided against the demand of the amount of incometax or interest. This contention overlooks the fact that even if not appealable, it is clearly revisable. However, as we have noticed above, the assessment made in proceedings under Section 143(2) shall, for all purposes, be an assessment of tax made under Section 143(3) and, in that event, shall be appealable under Section 246(1) (a) of the Act. 38. We may also refer to a decision of this High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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