2013 (12) TMI 145 - HC - Income Tax

Attachment of rent order Held that - The petitioner s claim as to exclusive ownership of the attached property is based upon a compromise decree. The petitioner also alleges that his wife is owner of the land pursuant to a gift deed and that she has constructed the shops, rent whereof has been attached - Apart from the legality of the decree and ownership of the property, adjudication of this petition would involve consideration of the status of Raj Kumar Basisht and his HUF, constitution of the firm on the relevant date and liability of its partners, and other disputed questions of fact which would necessarily require parties to lead evidence - The petitioner s prayer for quashing of the attachment is so intrinsically linked to answers to these disputed questions as to be inseparable. The petitioner is required to seek his remedy by approaching a civil court for declaration of his title The petition is dismissed.

Summary

Issues:
1. Validity of the order attaching rent of immovable property.
2. Disputed questions of fact relating to the constitution of the firm, ownership of the property, and validity of the decree.
3. Ownership of the property and the nature of the tax leading to the attachment notice.
4. Adjudication of the petitioner's claim to exclusive ownership based on a compromise decree.
5. Consideration of the status of Raj Kumar Basisht and his HUF, constitution of the firm, and liability of its partners.

The High Court was presented with a case where the petitioner sought a writ to quash an order attaching rent from an immovable property owned by them. The petitioner claimed to be the sole proprietor of a firm, M/s Gopal Iron and Steel Works, based on a compromise decree. The revenue had attached the rent due to a tax demand related to the personal assessment of a former partner of the firm. The petitioner argued that the attachment was illegal as the demand did not pertain to the firm. However, the respondents contended that the decree was invalid as all shareholders were not parties to it. They also raised questions about the ownership of the property, the constitution of the firm, and the liability of its partners.

The Court considered the arguments presented and noted that determining the ownership of the property and the validity of the decree involved disputed questions of fact, including the status of individuals and the constitution of the firm. The Court expressed reluctance to adjudicate on these factual disputes under Article 226 of the Constitution. The Court emphasized that the petitioner's claim for quashing the attachment was intertwined with these disputed questions and could not be separated. Therefore, the Court dismissed the writ petition, advising the petitioner to seek remedy through a civil court to establish their title to the property.

In conclusion, the High Court dismissed the writ petition, highlighting the need for the petitioner to address the disputed factual issues through a civil suit to establish ownership of the property. The Court refrained from delving into the complex factual matters and emphasized the appropriate legal recourse available to the petitioner for resolving the ownership dispute effectively.