2017 (10) TMI 1526 - HC - Income Tax

Income tax notice u/s 179 - alleged default of notice on the third appellant - HELD THAT - The appeal was dismissed for non-prosecution; an application for restoration was filed after two years. Notice has been issued on that application, returnable for 13.12.2017. In the meanwhile, the applicant had sought urgent orders to restrain coercive action. Having regard to the totality of the circumstances, the Court is of the opinion that it is open to the applicant - or any other party, who claims entitlement, to approach the Income Tax authorities and resist the notice or demand or any such action. Any representation made by the applicant on behalf of the Company shall not be treated as conclusive of any contentions which any party may be entitled to seek before the Court or the National Company Law Tribunal.

Summary

Issues Involved:
1. Exemption application under CM No.37680/2017.
2. Application under Section 44 of the Evidence Act read with Section 151 CPC (CM Nos.37679/2017).

Exemption Application (CM No.37680/2017):
The exemption application was allowed subject to all just exceptions. This indicates that the appellant, represented by Deepak Khosla, was granted exemption from certain requirements or obligations, with the condition that any legitimate exceptions would still apply.

Application under Section 44 of the Evidence Act read with Section 151 CPC (CM Nos.37679/2017):
1. The applicant sought various reliefs, with the trigger being an income tax notice under Section 179 issued on 22.09.2017, demanding payment for the alleged default of notice by Montreaux Resorts Pvt. Limited.
2. The contention was that due to the company's failure to file returns, it underwent default assessment leading to tax liability. The applicant, Mr. Khosla, expressed concerns that prosecution notices might be issued for other defaults in the future.
3. The appeal was initially dismissed for non-prosecution, followed by a restoration application after two years. A notice was issued on this application returnable for 13.12.2017. Meanwhile, urgent orders were sought to prevent coercive action.
4. The Court opined that the applicant or any entitled party could approach the Income Tax authorities to challenge the notice, demand, or any related actions. It was emphasized that any representation made by the applicant on behalf of the company would not be considered conclusive regarding contentions that parties might wish to present before the Court or the National Company Law Tribunal.
5. The matter was listed for further proceedings on 13.12.2017, indicating that the Court would continue to address the issues raised in the application.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Court's decisions regarding the exemption application and the application under Section 44 of the Evidence Act read with Section 151 CPC.