9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (1) TMI 1352 - HC - Income TaxSale of Attached property - limitation period for the sale of attached immovable property - extension of time limit as per Proviso to Rule 68B(1) - extension of the limitation period for the sale of the petitioner s attached property as valid under Rule 68B of the Second Schedule to the Income Tax Act 1961 - HELD THAT - The immovable property of the petitioner was attached on 10.02.2021. This was few days before the period expired on 31.03.2021. On 26.02.2021 a proclamation of sale was made for the sale of immovable property of the petitioner. The auction was fixed to be held on 25.03.2021. There were no bidders during the auction that was held on 25.03.2021. Since the date of auction was fixed to 25.03.2021 on which date there are no bidders it can be construed that the situation was covered by the 1st instance under 2nd proviso to Rule 68B of the 2nd schedule to the Income Tax Act 1961 i.e. where the immovable property is required to be resold due to the amount of highest pay being less than the reserve price fixed. Therefore the extension of the period for bringing the immovable property of the petitioner by one year by the Chief Commissioner of Income Tax vide order dated 02.11.2021 cannot be questioned as it is in consonance with the 2nd proviso to Rule 68B of the 2nd schedule to the Income Tax Act 1961. The argument of the petitioner that the respondent Income Tax Department was not authorised to extend the period of auction by one year to 31.03.2022 on the ground that the situation contemplated in Rule 57 Rule 58 Rule 61 of the 2nd schedule to the Income Tax Act 1961 were not attracted cannot be countenanced. Defence of the petitioner claiming that the petitioner is a labourer and therefore the property of the petitioner was exempted from attachment by virtue of Rule 10 of the 2nd schedule to the Income Tax Act 1961 read with section 60 of the Civil Procedure Code 1908 - It has to be examined from the status of the petitioner at the time of the Assessment Order / Penalty Order which has given rise to the proceedings under the 2nd schedule to the Income Tax Act 1961. Change in the status of the petitioner after the rights accrued to the Income Tax Department to attach the property of the petitioner cannot be whittled down. Therefore a reference to Rule 10 of the 2nd schedule to the Income Tax Act 1961 cannot come to the rescue of the petitioner. Challenge to the Impugned Order extending the time for bringing the immovable property of the petitioner to sale by auction by fixing the time till 31.03.2022 cannot be said to be beyond the period of limitation.
ISSUES PRESENTED and CONSIDERED
The primary issues considered by the Court were: 1. Whether the extension of the limitation period for the sale of the petitioner's attached property was valid under Rule 68B of the Second Schedule to the Income Tax Act, 1961. 2. Whether the petitioner's property was exempt from attachment and sale under Rule 10 of the Second Schedule to the Income Tax Act, 1961, read with Section 60 of the Civil Procedure Code, 1908, on the ground that the petitioner claimed to be a laborer. 3. Whether the petitioner had any alternative remedies available, and if so, whether the High Court should exercise its discretionary jurisdiction to entertain the writ petition. ISSUE-WISE DETAILED ANALYSIS Issue 1: Extension of Limitation Period under Rule 68B Relevant Legal Framework and Precedents: Rule 68B of the Second Schedule to the Income Tax Act, 1961, prescribes a seven-year limitation period for the sale of attached immovable property, which can be extended by one year under certain circumstances, such as when the property needs to be resold due to the highest bid being less than the reserve price. Court's Interpretation and Reasoning: The Court noted that the limitation period for the sale of the petitioner's property would have expired on 31.03.2021. However, since there were no bidders during the auction held on 25.03.2021, the situation was covered under the second proviso to Rule 68B, allowing for a one-year extension. Key Evidence and Findings: The Court found that the auction date was set for 25.03.2021, and no bidders were present, justifying the extension of the limitation period by one year to 31.03.2022. Application of Law to Facts: The Chief Commissioner of Income Tax's order dated 02.11.2021, extending the auction period, was deemed consistent with the legal provisions. Conclusions: The argument that the extension was unauthorized was rejected, and the extension was upheld as valid. Issue 2: Exemption from Attachment under Rule 10 and Section 60 CPC Relevant Legal Framework and Precedents: Rule 10 of the Second Schedule to the Income Tax Act, 1961, and Section 60 of the CPC provide exemptions from attachment and sale for certain properties, such as the dwelling house of an agriculturist or laborer. Court's Interpretation and Reasoning: The Court emphasized that the status of the petitioner at the time of the Assessment and Penalty Orders was crucial. The petitioner's subsequent change in status to a laborer did not affect the rights that had already accrued to the Income Tax Department. Key Evidence and Findings: The petitioner was a gold trader at the time of the relevant orders, and the exemption under Rule 10 was not applicable. Application of Law to Facts: The petitioner's argument for exemption based on current status was dismissed, as the relevant status was at the time of the orders. Conclusions: The exemption claim was rejected, and the property was not exempt from attachment and sale. Issue 3: Availability of Alternative Remedies Relevant Legal Framework and Precedents: The principle of alternative remedies suggests that courts may decline to exercise jurisdiction if adequate and efficacious remedies are available elsewhere. Court's Interpretation and Reasoning: The Court referenced the judgment of the High Court of Calcutta, which emphasized that alternative remedies should be pursued, especially when disputed facts are involved. Key Evidence and Findings: The petitioner had not exhausted available appeals against the Assessment and Penalty Orders, and the Court found that alternative remedies were adequate. Application of Law to Facts: The Court determined that the writ petition was not the appropriate forum, given the availability of other remedies. Conclusions: The Court declined to entertain the writ petition, emphasizing the importance of following available appeal processes. SIGNIFICANT HOLDINGS Core Principles Established: The Court reinforced the principle that extensions of limitation periods under Rule 68B are valid under specified conditions and that exemptions under Rule 10 depend on the status of the assessee at the time of the relevant orders. The importance of pursuing alternative remedies before approaching the High Court was also underscored. Final Determinations on Each Issue: The extension of the limitation period was upheld, the claim for exemption from attachment was rejected, and the writ petition was dismissed due to the availability of alternative remedies.
|
