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TMI Blog2024 (5) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... years (earlier three years) from the end of the financial year in which 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 become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX. Sub Rule-(ii) of Rule-68B provides for exclusion of certain periods while computing the period of limitation. Sub Rule-(iii) of Rule-68B provides that special provision for cases where any immovable property has been attached before 01.06.1992 and the order giving rise to a demand of any tax, interest, etc has also become conclusive or final before the said date. In such a situation the period of limitation as referred by Sub-Rule-I would commenced from 01.06.1992, this Sub-Rule (1), thus, makes it clear that limitation provided under Sub Rule-I for sale of immovable property would appear also to be attachment of immovable property and finalisation of tax demand which have occurred where from 01.06.1992. In such a case, computing the period of limitation would be 01.06.1992, i.e. the date on which the said rule was inserted. Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is a businessman who is engaged in supply of power tillers and tractors to various Departments of the State of Assam. The petitioner is the proprietor of various firms and filed his income tax returns regularly. 4. In the year 2004, the Assessing Officer made a block assessment of the income of the petitioner and vide order dated 30.12.2004, has stated that concealed undisclosed income of the assessee/ petitioner herein was Rs. 98.62,670.00 (Rupees Ninety Eight Lakhs Sixty Two Thousand Six Hundred and Seventy) only, for the Financial Year 1996-97 to 2001-02 and from 01-04-2002 to 21-112002 (Assessment Year 1997-98 to 2002-03 and 2003-04 (in part)). Thereafter, a demand notice was issued under Section 156 of the Income Tax Act, 1961 vide dated 30-12-2004, along with Assessment Order and Challan. 5. On receipt of the demand notice dated 30-12-2004, the petitioner filed a Revision under Section 264 of the Income Tax Act, 1961, before the Commissioner of Income Tax, Guwahati-I, which was disposed of by an order dated 05-12-2006. Thereafter a revised assessment order dated 11-12-2006 was issued to the petitioner by the Assessing Officer and the payable income tax by the petitioner wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Grieved, the petitioner has filed the present petition on the ground that same is hit by rule 68B of the Schedule II of the Income Tax Act, 1961. 11. Mr. R. Dubey, learned counsel for the petitioner, while not disputing the dues/liabilities of the petitioner, submits that since the impugned orders have been issued after lapse of three years, it is barred by the provision of Rule 68B of the Schedule II of the Income Tax Act, 1961. Rule 68B (1) of the Schedule II of the Income Tax Act, 1961 provides for a three years (now seven years, which has been amended in the year 2019) in view of the conclusiveness of the Assessment Year in 2010. He submits that no attachment could have been made. He submits that since the notice of sale is barred under Rule 68B (1) of the Schedule II of the Income Tax Act, 1961, the attachment would be automatically deemed to have been vacated. 12. Mr. Dubey, learned counsel, in support of his submission, has relied the following two decisions: (1) The decision of High Court of Judicature at Madras in the case of Nooruddin vs. Tax Recovery Officer, reported (2001) 251 ITR 357 and (2) The decision of the High Court of Bombay in the case of M.U. Joshi vs. Tax R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned sale notice dated 27.03.2019 and the attachment is barred by limitation under Rule 68B of the Schedule II of the Income Tax Act, 1961. 17. There would not be any dispute that proclamation for sale/ auction has to be made before the expiry of period of three years ( now seven years as amended in the year 2019) from the end of the financial year in which 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 become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX. 18. Rule 68B of the Schedule II of the Income Tax Act, 1961, provides which is reproduced here-in-below: 68B. (1) No sale of immovable property shall be made under this Part after the expiry of [seven) years from the end of the financial year in which 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 become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX: (Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the recovery of which the immovable property has been attached, has become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX. 20. Section 245-I of the Income Tax Act, 1961 provides as follows: Every order of settlement passed under sub-section (4) of section 245D shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in this Chapter, be reopened in any proceeding under this Act or under any other law for the time being in force . 21. Considered the fundamental question of sale proclamation being barred by limitation as prescribed in Rule 68B of the Second Schedule of Income Tax Act, 1961 in the context of above facts. 22. It is noticed that the relevant facts are not in dispute. The immovable property belongs to the petitioner. The immovable property put to sale was under attachment on 20.12. 2019 and the notice to sale/proclamation of sale was issued on 27.03.2019. 23. Rule-68B, which was inserted by Finance Act, 1992, w.e.f. 01.06.1992, permits sale of immovable property for recovery of unpaid taxes only within three years from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thirty days calculated from the date on which a copy of the proclamation of sale has been affixed on the property or in the office of the Tax Recovery Officer, whichever is later. Rule 56 provides that the sale shall be by public auction to the highest bidder and shall be subject to confirmation by the Tax Recovery Officer. Proviso to Rule 56 provides that no sale under this rule shall be made if the amount bid by the highest bidder is less than the reserve price, if any, specified under clause (cc) of Rule 53. Rule-58 to 65 provides for both scheme for attachment and sale of property of an SSC in default. 26. Rule 68B, which is relevant for the present case was inserted by the Finance Act, 1992 w.e.f. 01.06.1992, (which has been amended 2019, to seven years now), provides that no sale of immovable property shall be made under this Part after the expiry of three [now seven) years from the end of the financial year in which 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 become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive under the provision of Section-245-I or chapter-XX of the Act, which deals with the appeals and revisions. Proviso to Sub-Rule-I, however give some leverage in case where the immovable property is required to be sold due to the Act of the highest bids is less than the reserve price or where the case falls under Rule-57 or Rule-58 of the same is set aside under Rule-61. In such a case, the period of limitation of sale would be stand extended by one year. Sub Rule-(ii) of Rule-68B provides for exclusion of certain periods while computing the period of limitation. Sub Rule-(iii) of Rule-68B provides that special provision for cases where any immovable property has been attached before 01.06.1992 and the order giving rise to a demand of any tax, interest, etc has also become conclusive or final before the said date. In such a situation the period of limitation as referred by Sub-Rule-I would commenced from 01.06.1992, this Sub-Rule (1), thus, makes it clear that limitation provided under Sub Rule-I for sale of immovable property would appear also to be attachment of immovable property and finalisation of tax demand which have occurred where from 01.06.1992. In such a case, comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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