2017 (12) TMI 1124 - HC - Income Tax

Immunity - Summons under Section 131 by ACIT calling upon the petitioner to attend the office of the respondent No.3 for recording his statement - Held that - Under the said provisions of Section 131 of the Income Tax Act, 1961, the designated Assistant Commissioner or other specific authorities have the powers of the Civil Court vested in them under the Code of the Civil Procedure, 1908. The said provision is applicable to any person to whom such summons are issued and the said provisions do not carve out any exception for any designation of office held by him. The alleged immunity claimed by the present petitioner under the provisions of the Diplomatic Relations (Vienna Convention) Act, 1972 cannot be claimed by the petitioner so as not to respond to the summons issued by the Assistant Commissioner in connection with the business activity of the petitioner or his company in which he is Director particularly, when the business is carried out in the same premises in which the alleged consular activities were also being carried on. The provisions of the Diplomatic Relations (Vienna Convention) Act, 1972 relied upon by the learned counsel for the petitioner also do not envisage any such immunity and Section 8 of the Diplomatic Relations (Vienna Convention) Act, 1972 The respondent-Assistant Commissioner can summon the petitioner to his own office under Section 131 of the Act. The learned counsel for the petitioner also has fairly agreed that the petitioner would not object to it. Therefore, the present petition is disposed of with a liberty and direction to both the parties to undertake the proceedings under Section 131 of the Income Tax Act in the office of the respondent-Assistant Commissioner Circle-4(1) (1), Bengaluru. The respondent Authority will be free to issue fresh summons under section 131 of the Act to the petitioner for seeking his appearance, within a period of one month from today.

Summary

Issues Involved:
Challenge to Summons under Section 131 of Income Tax Act based on claimed immunity as Honorary Consulate of another country. Interpretation of Vienna Convention and Diplomatic Relations Act in relation to summons for recording statement. Applicability of Section 131 powers to Assistant Commissioner under Income Tax Act.

Analysis:

1. Challenge to Summons based on Immunity Claim:
The petitioner challenged the Summons issued by the Assistant Commissioner of Income Tax under Section 131 of the Income Tax Act, claiming immunity as the Honorary Consulate of a foreign country. The petitioner relied on the Vienna Convention and Diplomatic Relations Act to argue that the Assistant Commissioner could not insist on his attendance at the same premises where the consular office was located. However, it was noted that the petitioner was willing to comply with the provisions of the Act and attend the Assistant Commissioner's office instead.

2. Interpretation of Vienna Convention and Diplomatic Relations Act:
The respondent, representing the Income Tax department, argued that there was no prohibition on summoning the petitioner to the Assistant Commissioner's office, especially since the petitioner's business activities were conducted in the same premises as the alleged consular activities. The court analyzed the relevant provisions of the Diplomatic Relations Act and Vienna Convention to determine the scope of immunity and restrictions on entry into diplomatic premises for legal processes.

3. Applicability of Section 131 Powers:
The court examined Section 131 of the Income Tax Act, which grants powers to designated authorities equivalent to those of a Civil Court under the Code of Civil Procedure, 1908. It was emphasized that these powers apply to any person summoned, without exceptions based on their official designation. The court concluded that the petitioner's claimed immunity as an Honorary Consulate did not exempt him from responding to the summons issued by the Assistant Commissioner, particularly when his business activities were conducted in the same premises.

4. Judgment and Practical Solution:
After hearing arguments from both sides, the court disposed of the petition by directing the parties to undertake proceedings under Section 131 of the Income Tax Act at the office of the Assistant Commissioner. The petitioner agreed not to object to attending the Assistant Commissioner's office. The respondent was given the liberty to issue fresh summons to the petitioner within a month for his appearance, with no costs imposed on either party.

In conclusion, the court upheld the applicability of Section 131 powers to summon the petitioner for recording his statement under the Income Tax Act, rejecting the claimed immunity based on consular activities conducted in the same premises as the petitioner's business. The judgment provided a practical solution for the parties to proceed with the proceedings at the Assistant Commissioner's office, ensuring compliance with the legal requirements under the Act.