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Tax Recovery Officer can direct personal attendance of a non-cooperative assessee in inquiry conducted pursuant to summons u/r 83 so as to expedite recovery proceedings: HC

2019-TIOL-1580-HC-AHM-IT

IN THE HIGH COURT OF GUJARAT

AT AHMEDABAD

Special Civil Applicatin No.12227 of 2019

MAULIKKUMAR VINODKUMAR PATEL

Vs

TAX RECOVERY OFFICER-4

J B Pardiwala & A C Rao, JJ

Dated: July 18, 2019

Appellant Rep by: Vishwas K Shah & MS Mohini K Shah, for No.1
Respondent Rep by: Mauna M Bhatt, for No. 1,2

Income Tax – Sections 144, 156 – Rule 83

Keywords – best judgment assessment – Personal attendance – Power to take evidence

IN this case, the assessee had disputed the validity of summon issued by the Tax Recovery Officer. The AO computed the income of the assessee in estimated basis and passed the best judgment assessment order. This was after the assessee failed to comply with SCNs issued u/s 142(1) during the scrutiny assessment. During the pendency of appeal before the CIT(A), the Department issued the recovery notice. The assessee’s authorised representative filed filed a letter along with the Vakalatnama seeking time. However, the Department issued the summon under challenge for personal attendance of assessee, to produce books of account alongwith other documents and not to depart without order from the concerned officer. The assessee disputes the summon requiring personal attendance of assessee even after filing of vakalatnama of assessee’s advocate.

Having heard the parties, the High Court held that,

Whether rule 83 being absolutely silent for the purpose of inquiry is able to confer powers upon the Revenue to insist upon the personal attendance of assessee even after filing of vakalatnama of assessee’s advocate – YES: HC

++ the plain reading of Rule 83 makes it clear that the Tax Recovery Officer or other officer, acting under the provisions of Schedule-II, are conferred with the powers of a Civil Court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents. Section 136 further clarifies that the proceedings before the Income Tax Authorities are in the nature of judicial proceedings;

++ once Rule 83 clarifies that the Tax Recovery Officer or any other officer, acting under the provision of Schedule-II, shall have the powers of a Civil Court while trying a suit, it necessarily implies that by virtue of summons under Rule 83 of the Second Schedule, the Tax Recovery Officer can compel the personal attendance of the assessee/defaulter;

Whether it is permissible for the Tax Recovery Officer to enforce the personal attendance of the non-cooperative assessee for the purpose of necessary inquiry pursuant to the summons u/r 83 for effective and expeditious disposal of the recovery proceedings: YES: HC

++ the assessee has invoked extraordinary equitable jurisdiction of this Court under Article 226 for the purpose of questioning the legality and validity of the summons issued u/r 83. In such circumstances, conduct of the assessee is important. From perusal of records, it appears that there was no cooperation worth the name at the end of the writ applicant. Thus, i t is permissible for the authority concerned to secure and enforce the personal attendance of the assessee/defaulter for the purpose of necessary inquiry pursuant to the summons under Rule 83 for effective and expeditious disposal of the recovery proceedings. It is always permissible for the Tax Recovery Officer to call for necessary and relevant information and conduct an inquiry by securing and enforcing the personal attendance of the assessee/defaulter. In the result, writ application fails and is hereby rejected.

Assessee’s writ application dismissed

JUDGEMENT

Per: J B Pardiwala:

1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs:

“(A) Be pleased to quash and set aside the impugned summons dated 04.07.2019 received on 11.07.2019 issued by the respondent no.1.

(B) Pending hearing, admission, and final disposal of this petition, be pleased to stay the operation, effect and implementation of impugned summons dated 04.07.2019 received on 11.07.2019 issued by the respondent no.1.

(C ) Cost of this petition.”

2. The case of the writ applicant, in his own words, as pleaded in the writ application, is as under:

2.1 Petitioner states and submits that the petitioner is having PAN No.BZZPP9015K and on 16.12.16, Respondent No.2 passed an assessment order under section 144 of the Income Tax Act, 1961 against the petitioner and against the said order of 16.12.16, petitioner preferred an appeal before the department on 15.06.2019 and currently it is pending. The copy of the said order dated 16.12.16 passed under section 144 of the Income Tax Act is annexed herewith and marked as Annexure-P/2.

2.2 The petitioner submits that the respondent no.2 has raised a demand of Rs.1,64,67,650/- under section 156 of Income Tax Act, 1961. The copy of the demand notice dated 16.12.16 is annexed herewith and marked as Annexure-P/3.

2.3 The petitioner states and submit that on 30.05.2019, Respondent No.2 issued a letter of recovery of arrear demand to the petitioner. By virtue of the said letter, petitioner was asked to file reply/attend the office of respondent no.2 as in person or through an authorized representative within 7 days from the receipt of the letter. The copy of the letter of recovery of arrear demand dated 30.05.2019 issued by respondent no.2 is annexed herewith and marked as Annexure-P/4.

2.4 The petitioner states that on receipt of the letter dated 30.05.2019, petitioner preferred an appeal before the Commissioner of Income Tax (Appeals). The said appeal was filed on 15.06.2019 which is currently pending. The said appeal filed in Form No.35 before the Commissioner of Income Tax (Appeals). The copy of the appeal filed on 15.06.09 before the Commissioner of Income Tax (Appeals) is annexed herewith and marked as Annexure-P/5.

2.5 The petitioner states and submits that in response to letter dated 30.05.2019, petitioner’s lawyer has filed a letter along with the Vakalatnama seeking time on 17.06.2019. The said letter is received by respondent no.2 on 18.06.2019. The copy of the letter dated 17.06.2019 issued by the petitioner’s lawyer to respondent no.2 is annexed herewith and marked as Annexure-P/6.

2.6 Despite the aforesaid, petitioner states that the respondent no.1 has issued a summons dated 04.07.2019 which is received by the petitioner on 11.07.2019 by virtue of which petitioner has been directed to personally attend the office of respondent no.1 on 16.07.2019 at 11:30 A.M to give the evidence and to produce books of account and other documents and not to depart until petitioner receives permission to do so.”

3. Thus, the writ applicant seeks to question the legality and validity of the summons dated 4th July, 2019 issued by the Tax Recovery Officer-4, Ahmedabad in exercise of his powers under Rule 83 of the Second Schedule to the Income Tax Act, 1961. The summons is as follows:

“SUMMONS UNDER RULE 83 OF THE SECOND SCHEDULE TO THE INCOME TAX ACT, 1961

To, 
Maulikkumar Vinodkumar Patel,
J-11, Virat Apartment, Nr. Mahfil Restaurent,
Sola-Road, Ghatlodia, Ahmedabad, 380061.

Whereas your attendance is required in connection with the recovery proceedings pending before me in your case, in this matter, you are hereby required to personally attend my office at the address mentioned above on 16.07.2019 at 11:30 A.M to give evidence and produce Books of Account and other documents specified below and not to depart until you receive my permission to do so.

Without prejudice to the provision of any other law for the time being in force if you intentionally omit to do so, attend and give evidence or produce the books of account documents, you shall be liable to the consequences mentioned in section 32(*) of the C.P:.C 1908.

SPECIFICATION OF DOCUMENTS AND BOOKS

1. Personal attendance is compulsory

2. Copy of Return of Income alongwith the account and Bank statement of last three years.

3. Details of Movable/Immovable property alongwith description and address in the name of individual alongwith complete details.

Given under my hand and seal at Ahmedabad on this 04.07.2019.

(Dilip M. Sarvaiya)
Tax Recovery Officer-4,
Ahmedabad.”

4. Mr. Vishwas K. Shah, the learned counsel appearing for the writ applicant has raised the following issues for the consideration of this Court:

“1. Whether the impugned summons issued under Rule 83 is within the power and authority of Tax Recovery Officer?

2. Whether the impugned summons is proper and just seeking personal attendance when Vakalatnama of lawyer is filed and petitioner is inclined to cooperate to produce all documents, if reasonable time is given?

3. Whether the impugned summons can stipulate that petitioner will not depart until directed by Tax Recovery Officer when he attends the office on direction of personal presence?”

5. Mr. Shah give us a fair idea about the sequence of events that has taken place in the present matter:

Sr. No.DateEvents
1.16.12.16Assessment order is passed against the petitioner under section 144 of the Income Tax Act, 1961 for A.Y.2014-15
2.16.12.16Notice of demand of Rs.1,64,67,650/- under section 156 of the Income Tax is issued to the petitioner. The demand has remain unpaid by the petitioner.
3.30.05.2019Letter of recovery of demand of arrears is issued by respondent no.2 to the petitioner.
4.15.06.2019Appeal is filed in form No.35 before the Commissioner of Income Tax (Appeals). The said appeal is pending for adjudication.
5.18.06.2019Petitioner’s lawyer has filed letter along with Vakalatnama and sought for time before the respondent no.2
6.11/07/19Petitioner has received impugned summons dated 04.07.2019 under Rule 83 of the second schedule to the Income Tax Act-1961 to remain personally present on 16.07.2019 at 11:30 A.M.

6. Mr. Shah submitted that the respondent no.1 is not empowered to insist for the personal attendance of the writ applicant by issue of summons under Rule 83 of the Second Schedule to the Act. He further submitted that the respondent no.1 is also not empowered under Rule 83 to issue direction that the writ applicant shall not depart without the prior permission of the respondent no.1. According to Mr. Shah, Rule 83 only speaks of the power to take evidence. The argument is that Rule 83 does not confer the respondent no.1 with the power to secure the personal attendance of the applicant. He submitted that although the impugned summons refers to the Civil Procedure Code, yet the same is not, at all, applicable to the case on hand. Mr. Shah submitted that the whole object of issue of summons under Rule 83 is to gather or collect necessary information as regards the assets, books of accounts, documents etc. of the assessee. Mr. Shah clarified that his client would definitely honour the summons served upon him under Rule 83, but the insistence on the part of the respondent no.1 for the personal attendance of the writ applicant is something illegal. According to Mr. Shah, whatever information is required or necessary, the writ applicant is duty bound to furnish the same through his legal representative or his chartered accountant.

7. Mr. Shah also invited our attention to Rule 73 of the Second Schedule to the Act, 1961. Section 73 falls within part- V of the Second Schedule. It talks about notice to show-cause. Part-V is with respect to arrest and detention of the defaulter. Mr. Shah tried to draw a fine distinction between Rule 83 and Rule 73 by pointing out that in Rule 73, the Tax Recovery Officer is empowered to call upon the defaulter to appear before him in person on the date specified in the notice, whereas Rule 83 does not confer with any such power. Rule 83 only confers with the power to take evidence.

8. Mr. Shah, in the last, invited our attention to Section 131 of the Act, 1961. Section 131 is with respect to the power of the Assessing Officer regarding the discovery, production of evidence etc. Mr. Shah pointed out that Section 131 very clearly provides or stipulates that for the purposes of the Act, 1961, the Assessing Officer shall have the same powers as are vested in a Court under the Civil Procedure Code when trying a suit in respect of matters like discovery and inspection; enforcing the attendance of any person; compelling the production of books of account and other documents and issuing commissions. Rule 83 is absolutely silent as regards the aforesaid. In such circumstances, according to Mr. Shah, although the respondent No.1 may be empowered to issue summons under Rule 83 of the Second Schedule to the Act, 1961, yet he cannot insist for the personal attendance of the writ applicant. To put it in other words, according to Mr. Shah, the personal attendance cannot be made compulsory.

9. Mr. Shah, in the last, submitted that summons under Rule 83 of the Second Schedule to the Act could have been issued, provided any proceedings could be said to be pending with the Income Tax Officer, Ward-4(2)(3), Ahmedabad. In the absence of any proceedings before the Income Tax Officer, no summons under Rule 83 of the Second Schedule to the Act could have been served upon the writ applicant.

10. In such circumstances, referred to above, Mr. Shah prays that there being merit in this writ application, the same be allowed and the reliefs as prayed for in the writ application may be granted.

11. On the other hand, this writ application has been vehemently opposed by Ms. Mauna Bhatt, the learned senior standing counsel appearing for the respondents. Ms. Bhatt submitted that no error, not to speak of any error of law, could be said to have been committed by the respondent No.1 in issuing the summons under Rule 83 of the Second Schedule to the Act, 1961 for the purpose of inquiry and for that purpose to compel the personal attendance of the writ applicant. Ms. Bhatt submitted that Rule 83 makes it explicitly clear that the authority concerned shall have the powers of a Civil Court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents. According to Ms. Bhatt, there is no merit in the principal argument of Mr. Shah that by virtue of summons under Rule 83 of the Second Schedule to the Act, 1961, the personal attendance of the assessee cannot be made compulsory. Ms. Bhatt invited the attention of this Court to the assessment order passed by the respondent No.1. According to Ms. Bhatt, the writ applicant failed to appear before the respondent No.1 during the course of the assessment proceedings, and in such circumstances, the respondent No.1 carried out the assessment in exercise of his powers under Section 144 of the Act, 1961, i.e., by the best judgment assessment. Ms. Bhatt, from the record available with her, pointed out the following:

(i) Penalty notice under section 271(1)(c) read with section 274 of the Act, 1961 along with the demand notice under section 156 of the Act was served upon the assessee through speed post.

(ii) The certificate under Section 222 of the Act along with the notice of demand under Rule 2 of the Second Schedule to the Act was received from the Assessing Officer for the certified demand of Rs.2,88,59,337/- for the A.Y. 2014-15.

(iii) The TRC was issued by the Assessing Officer after obtaining the necessary permission from the Addl. Commissioner of Income Tax, Range-4(2), Ahmedabad vide Letter No.Addl.CIT, Range-4(2)/Approval/TRC/2018-19.

(iv) After the receipt of the TRC, the office of the Tax Recovery Officer (4), Ahmedabad issued the ITCP-1 on 25th March, 2019 for the A.Y.2014-15 and the same was served upon the writ applicant on 27th March, 2019.

(v) The writ applicant neither paid the outstanding demand nor filed any reply to the ITCP-1/Form No.57 dated 25th March,2019. In such circumstances, a letter was addressed to the writ applicant to pay demand of Rs.2,88,59,337/- plus interest under section 220(2) of the Act for the A.Y.2014-15. The said letter was duly served upon the assessee.

(vi) The assessee neither attended nor has paid the demand till this date.

(vii) In such circumstances, referred to above, a summons under Rule 83 of the Second Schedule to the Act, 1961 was issued to the writ applicant dated 4th July, 2019 for the purpose of collecting necessary details/information from the writ applicant/assessee.

12. Ms. Bhatt, in support of her submission as regards the power of the respondent No.1, has placed strong reliance on a decision of the Madras High Court in the case of G.V. Films Ltd. vs. S. Priyadarshan & Anr., (2006) 287 ITR 561 (Mad). By placing reliance on the decision of the Madras High Court, Ms. Bhatt also submitted that the Income Tax Officers are entitled to lift the veil of the corporate entity and pay regard to the realities. According to Ms. Bhatt, as the writ applicant failed to render any assistance so far as the assessment proceedings are concerned, the respondent No.1 thought fit to issue the summons under Rule 83 for the purpose of gathering the necessary information. Ms. Bhatt pointed out that on one pretext or the other, the writ applicant kept on seeking time, and during the interregnum period also tried to dispose of his properties fraudulently or surreptitiously.

13. In such circumstance, referred to above, Ms. Bhatt prays that there being no merit in this writ application, the same be rejected.

14. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the respondent No.1 committed any error in issuing the summons under Rule 83 of the Second Schedule to the Act, 1961 for the purpose of enforcing the personal attendance of the writ applicant.

15. Before adverting to the rival submissions canvassed on either side, we should look into few relevant provisions of law.

Rule 83 of the Second Schedule reads thus:

“Power to take evidence.

83. Every [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner], Tax Recovery Officer or other officer acting under the provisions of this Schedule shall have the powers of a civil court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents.”

16. Rule 73 of the Second Schedule reads as follows:

“Notice to show cause.

73. (1) No order for the arrest and detention in civil prison of a defaulter shall be made unless the Tax Recovery Officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified in the notice and to show cause why he should not be committed to the civil prison, and unless the Tax Recovery Officer, for reasons recorded in writing, is satisfied- (a)that the defaulter, with the object or effect of obstructing the execution of the certificate, has, after [the drawing up of the certificate by the Tax Recovery Officer], dishonestly transferred, concealed, or removed any part of his property, or

(b) that the defaulter has, or has had since [the drawing up of the certificate by the Tax Recovery Officer], the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same.

(2) Notwithstanding anything contained in sub-rule (1), a warrant for the arrest of the defaulter may be issued by the Tax Recovery Officer if the Tax Recovery Officer is satisfied, by affidavit or otherwise, that with the object or effect of delaying the execution of the certificate, the defaulter is likely to abscond or leave the local limits of the jurisdiction of the Tax Recovery Officer.

(3) Where appearance is not made in obedience to a notice issued and served under sub-rule (1), the Tax Recovery Officer may issue a warrant for the arrest of the defaulter.

[(3A) A warrant of arrest issued by a Tax Recovery Officer under sub-rule (2) or sub-rule (3) may also be executed by any other Tax Recovery Officer within whose jurisdiction the defaulter may for the time being be found.]

(4) Every person arrested in pursuance of a warrant of arrest under [this rule] shall be brought before the Tax Recovery Officer [issuing the warrant] as soon as practicable and in any event within twentyfour hours of his arrest (exclusive of the time required for the journey):

Provided that, if the defaulter pays the amount entered in the warrant of arrest as due and the costs of the arrest to the officer arresting him, such officer shall at once release him.

[Explanation.-For the purposes of this rule, where the defaulter is a Hindu undivided family, the karta thereof shall be deemed to be the defaulter.]

17. Rule 82 reads as follows:

“Officers deemed to be acting judicially.

82. Every [Principal Chief Commissioner or] Chief Commissioner] or [Principal Commissioner or] Commissioner], Tax Recovery Officer or other officer acting under this Schedule shall, in the discharge of his functions under this Schedule, be deemed to be acting judicially within the meaning of the Judicial Officers Protection Act, 1850 (18 of 1850).

18. Section 131 of the Act, 1961 reads as follows:

“131. Power regarding discovery, production of evidence, etc.

(1) The Assessing] Officer, Deputy commissioner (Appeals)], [Joint Commissioner] [Commissioner (Appeals)] [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner and the Dispute Resolution Panel referred to in clause (d) of sub-section (15) of section 144C shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil the same powers as are vested in a court under the Code of Civil Procedure 1908 (5 of 1908 ), when trying a suit in respect of the following matters, namely:-

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath,

(c) compelling the production of books of account and other documents; and

(d) issuing commissions.

(1A) If the Director General or Director or Deputy Director or Assistant Director, or the authorised officer referred to in sub- section (1) of section 132 before he takes action under clauses (i) to (v) of that sub- section,] has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his jurisdiction, then, for the purposes of making any enquiry or investigation relating thereto, it shall be competent for his to exercise the powers conferred under sub- section (1) on the incometax authorities referred to in that sub- section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income- tax authority.

(2) For the purpose of making an inquiry or investigation in respect of any person or class of person in relation to an agreement referred to in section 90 or section 90A, it shall be competent for any income tax authority not below the rank of Assistant Commissioner of Income-Tax, a may be notified by the Board in this behalf, to exercise the powers conferred under subsection (1) on the Income-Tax authorities referred to in that sub-section, notwithstanding that no proceedings with respect to such person or class of persons are pending before it or any other income-tax authority]

(3) Subject to any rules made in this behalf, any authority referred to in sub- section (1) or sub- section (1A)] or sub-section (2) may impound and retain in its custody for such period as it thinks fit any books of account or other documents produced before it in any proceeding under this Act:

Provided that an [Assessing] Officer or an Assistant Director]] or Deputy Director] shall not-

(a) impound any books of account or other documents without recording his reasons for so doing, or

(b) retain in his custody any such books or documents for a period exceeding fifteen days (exclusive of holidays) without obtaining the approval of the [Principal Chief Commissioner or] Chief Commissioner or [Principal Director General or] Director General or [Principal Commissioner or] Commissioner or [Principal Director or] Director therefor, as the case may be]]

19. Section 136 of the Act, 1961 reads as follows:

“136. Proceedings before income-tax authorities to be judicial proceedings:– Any proceeding under this Act before an income- tax authority shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code, 18603 (45 of 1860 ) and every income- tax authority shall be deemed to be a Civil Court for the purposes of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974 )]

20. Section 222 of the Income Tax Act, 1961 reads thus:

Certificate to Tax Recovery Officer:- (1) When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a statement in the prescribed form specifying the amount of arrears due from the assessee (such statement being hereafter in this Chapter and in the Second Schedule referred to as “certificate”) and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule-

(a) attachment and sale of the assessee’s movable property;

(b) attachment and sale of the assessee’s immovable property;

(c) arrest of the assessee and his detention in prison;

(d) appointing a receiver for the management of the assessee’s movable and immovable properties.

Explanation

For the purposes of this sub-section, the assessee’s movable or immovable property shall include any property which has been transferred, directly or indirectly on or after the 1st day of June, 1973, by the assessee to his spouse or minor child or son’s wife or son’s minor child, otherwise than for adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid; and so far as the movable or immovable property so transferred to his minor child or his son’s minor child is concerned, it shall, even after the date of attainment of majority by such minor child or son’s minor child, as the case may be, continue to be included in the assessee’s movable or immovable property for recovering any arrears due from the assessee in respect of any period prior to such date.]

(2) The Tax Recovery Officer may take action under subsection (1), notwithstanding that proceedings for recovery of the arrears by any other mode have been taken.”

21. Section 30 of the CPC reads as follows:

“30. Power to order discovery and the like:

Subject to such conditions and limitations as may be prescribed, the Court may, at any time, either of its own motion or on the application of any party,-

(a) make such orders as may be necessary or reasonable in all matters relating to the delivery and answering of interrogatories, the admission of documents and facts, and the discovery, inspection, production, impounding and return of documents or other material objects producible as evidence;

(b) issue summonses to persons whose attendance is required either to give evidence or to produce documents or such other objects as aforesaid;

(c) order any fact to be proved by affidavit.

22. Section 32 of the CPC reads as follows:

“32. Penalty for default:-The Court may compel the attendance of any person to whom a summons has been issued under section 30 and for that purpose may-

(a) issue a warrant for his arrest;

(b) attach and sell his property;

(c) impose a fine upon him 1[not exceeding five thousand rupees];

(d) order him to furnish security for his appearance and in default commit him to the civil prison.”

23. The plain reading of Rule 83 makes it clear that the tax Recovery Officer or other officer, acting under the provisions of Schedule-II, are conferred with the powers of a Civil Court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents. Section 136 of the Act, 1961 further clarifies that the proceedings before the Income Tax Authorities are in the nature of judicial proceedings. In the aforesaid context, we may refer to the observations of the Madras High Court in the case of G.V. Films Ltd. (supra). Mrs. R. Banumathi, J. (as her Ladyship then was) has observed as under:

“On behalf of the plaintiff, it is mainly contended that the Tax Recovery Officer has no jurisdiction to go beyond the documents shown to him and cannot conduct any further enquiry. This contention has no substance. The Tax Recovery Officer derives his powers under the Second Schedule and the Income-tax (Certificate Proceedings) Rules. Under Section 136, Income-tax Act, all proceedings before the officer shall be judicial proceeding. Under Rule 82 of the Second Schedule, every officer acting under this Schedule shall be deemed to be acting judicially within the meaning of Judicial Officers Protection Act. Under Rule 83, every officer acting under the Second Schedule shall have the powers of a civil court for the purpose of receiving evidence.”

24. Her Ladyship also took the view that in exceptional cases, the Court/Income Tax Department may be justified or entitled to lift the veil of the corporate entity and to pay regard to the economic realities behind the corporate entity. The Tax Recovery Officer is entitled to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation or to perpetrate a fraud.

25. The attempt on the part of Mr. Shah in comparing Rule 73 with Rule 83 for the purpose of making good his submission as regards the power to compel the personal attendance of the writ applicant is, in our opinion, absolutely futile. Rule 73 is a part of Part-V of the Schedule-II. Para-V is with respect to arrest and detention of the defaulter. On the other hand, Rule 83 is within Para-VI of the Schedule-II. Part-VI is miscellaneous. Once Rule 83 clarifies that the Tax Recovery Officer or any other officer, acting under the provision of Schedule-II, shall have the powers of a Civil Court while trying a suit, it necessarily implies that by virtue of summons under Rule 83 of the Second Schedule, the Tax Recovery Officer can compel the personal attendance of the assessee/defaulter.

26. We take notice of the fact that Schedule-II to the Act prescribes the procedure for recovery of tax. In fact, the entire Schedule-II is with regard to the procedure for recovery of tax. Section 222, referred to above, provides for certificate to the Tax Recovery Officer. When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery Officer is empowered to recover, from such assessee, the amount specified in the certificate by attachment and sale of the assessee’s movable property and immovable property. Section 222 of the Act also empowers the Tax Recovery Officer with the aid of the rules laid down in the Second Schedule to arrest the assessee and detain him in prison. It also empowers the Tax Recovery Officer to appoint a receiver for the management of the assessee’s movable and immovable properties. Thus, once the recovery proceedings are initiated, the same would be governed by the provisions of Schedule-II of the Act. In this regard, section 222 of the Act should be read along with Rule 83 of the Rules. It is the case of the Tax Recovery Officer that for the purpose of proceeding further with the recovery, it is necessary to collect relevant information and details as regards the movable and immovable properties of the writ applicant, and for that purpose, his presence is required. We are of the view that it is too much for the writ applicant to say that his personal attendance should not be insisted and that whatever information is required, the same shall be furnished by him through his legal representative or his chartered accountant.

27. We are also not impressed by the submission of Mr. Shah that as no proceedings could be said to be pending, as on date, before the Income Tax Officer, who passed the assessment order, the summons under Rule 83 of the Second Schedule to the Act could not have been issued. The assessment order came to be passed by the Income Tax Officer. The notice of demand under Rule 156 of the Act was also issued by the Income Tax Officer and sent along with the order of assessment to the writ applicant. Thereafter, the next step in the process is the recovery. The summons under Rule 83 of the Second Schedule to the Act has been issued by the Tax Recovery Officer. The recovery has to be undertaken in accordance with the provisions of Schedule-II to the Act. The recovery proceedings are pending as on date before the Tax Recovery Officer, and in connection with such pending recovery proceedings, the summons under Rule 83 came to be served upon the writ applicant.

28. We are also not impressed by the submission of Mr. Shah that Rule 83 of the Second Schedule to the Act only talks about enforcing the attendance of the witnesses and not the assessee himself. We may only say that when the assessee appears before the Tax Recovery Officer in response to such summons issued to him under Rule 83, he could be said to be a witness. The mere absence of the word ‘assessee’ or ‘defaulter’ would not make any difference. It is always open for the Tax Recovery Officer to seek necessary information from the assessee himself and any other witness or witnesses, if any.

29. The writ applicant has invoked extraordinary equitable jurisdiction of this Court under Article 226 of the Constitution of India for the purpose of questioning the legality and validity of the summons issued under Rule 83 of the Second Schedule to the Act. In such circumstances, we must also look into the conduct of the writ applicant. It is a settled position of law that even if some action of a quasi judicial authority is found to be not in accordance with law or without jurisdiction, still the High Court may decline to grant any relief in exercise of its equitable jurisdiction under Article 226 of the Constitution of India. Although, we do not find any illegality in the issue of summons under Rule 83 of the Second Schedule and thereby insisting for the personal attendance of the writ applicant, yet even if we believe that the summons is illegal, the conduct of the writ applicant disentitled him to any relief. In the case on hand, the return of income was filed on 6th September, 2014 declaring the total income of Rs.4,07,860/- along with computation of income, profit and loss account, balance sheet, tax audit report in Form No.3CB & 3CD etc. The return was processed under Section 143(1) of the Act. The case was selected for scrutiny and notice under Section 143(2) was issued on 3rd September, 2015 and was served on the writ applicant. A notice under Section 142(1) was also issued on the assessee dated 4th May, 2016 along with the detailed questionnaire. At this stage, we quote the relevant observations of the Assessing Officer from the order of assessment:

“Further, notice u/s. 142(1) was issued on 04.05.2016 along with detailed questionnaire, which was served on the assessee. Thereafter, notice u/s. 142(1) were issued on 12.05.2016, 26.05.2016, 14.06.2016, 05.08.2016 & 04.10.2016 along with detailed questionnaire, which were served on the assessee. However, in response to these notices neither the assessee has made any request for adjournment nor filed any other submission. Further, a show cause notice for penalty u/s.271(1)(b) of the I.T. Act, 1961 for non compliance and notice u/s. 142(1) were issued on 13.10.2016, which were served on the assessee. However, neither any compliance has been made nor any details furnished by the assessee in response to the said notices. Therefore, penalty of Rs.10,000/- has been levied in the case of the assessee by passing order u/s.271(1)(b) of the I.T. Act, 1961 on 21.10.2016. Further, again a show cause notice for penalty u/s. 271(1)(b) of the I.T Act, 1961 for non compliance was issued on 21.10.2016, which was served on the assessee. However, neither any compliance has been made nor any details furnished by the assessee in response to the said notice. Therefore, penalty of Rs.10,000/- has been levied in the case of the assessee by passing order u/s.271(1)(b) of the I.T Act, 1961 on 02.12.2016.

Vide above mentioned notices, the assessee was requested to furnish the details and information called for. However, neither any compliance has been made nor any details furnished by the assessee in response to above mentioned notices till to date. Therefore, a final opporunity of being heard was accorded to the assessee to attend the assessment proceedings personally or through representative duly authorized by him in this behalf along with the information desired by the department under the notices issued u/s.143(2) & 142(1) of the I.T Act, 1961 from time to time on or before 15.12.2016 vide show cause notice u/s. 144 dated 09.12.2016. The said notice was served upon the assessee on 12.12.2016.

But again on the date of hearing neither anybody attended nor filed any details/information. No adjournment was also sought for. It is evident from the instances cited above that the assessee has remained callous, non co-operative in the assessment proceedings and has defied all the statutory notices. Even till this date of order, the assessee has not submitted any details, documents, information and etc. to name with. Inthese circumstances, no alternative has been left with the undersigned than to proceed in the assessment on merits of the case and in the manner laid down under the provisions of section 144 of the I.T Act, 1961.”

30. The operative part of the assessment order reads thus:

“Assessed u/s.144 of the I.T Act, 1961. Issued demand notice & challan after giving credit of prepaid taxes, if any, after the verification. Charged interest u/s. 234A, 234B & 234C as applicable. Penalty notice issued u/s.271(1)(b) r.w.s 274 of the I.T Ac, 1961 in respect of additions made as per Para 4,5,6 & 7 of the order for cancelling the particulars of income.”

31. Thus, it appears that there was no cooperation worth the name at the end of the writ applicant.

32. It is in the aforesaid set of circumstances that the Assessing Officer had to issue the summons under Rule 83 of the Second Schedule calling for the necessary information for the purpose of recovery of the demand along with the penalty.

33. We inquired with Mr. Shah, the learned counsel appearing for the writ applicant as to why his client is so reluctant to personally appear before the respondent No.1. The only reply that came was that the respondent No.1 has no power to secure or enforce the personal attendance of the writ applicant on the strength of the summons under Rule 83 of the Second Schedule.

34. At this stage, Ms. Bhatt, the learned senior standing counsel appearing for the respondents brought to our notice a Division Bench decision of the Orissa High Court in the case of K.V. Mohamad vs. Sales Tax Officer Cuttack II East Circle Cuttack, reported in Laws (Ori) 1997 118. In the said case, the petitioner was a registered dealer under the provisions of the Orissa Sales Tax Act, 1947 and the Central Sales Tax Act, 1956 and he was assessed to tax for the year 1989-90. The petitioner was reassessed for the period in question consequent upon receipt of the report from the Inspector of Sales Tax regarding suppression of purchase of betelnut from the petitioner by one third party. The petitioner therein appeared in the reassessment proceedings. It appears that summons was issued through registered post which was returned back due to refusal and the Assessing Authority treated such refusal as sufficient service. The Assessing Authority proceeded to pass order of assessment. The petitioner, being dissatisfied, came before the High Court by way of a writ petition. In such factual backdrop, Ms. Bhatt placed reliance on the following observations made by the High Court:

“It is not disputed that the sales tax authorities are clothed with the powers of the civil court. Therefore, section 32 of the Code of Civil Procedure will apply and this section give immense power to the assessing authority to compel attendance/appearance of the representative of the concerned firm, M/s. Gopinath Store. We are not satisfied that by mere issuance of a notice by registered post, the assessing authority has discharged his obligation. It is the duty of the assessing authority to secure attendance of the representative of the concerned firm. Section 32 of the Code of Civil Procedure empowers to issue warrant of arrest, attach and sell the property and imposed fine. The provision of section 32 is quoted below:

“32. Penalty for default:-The Court may compel the attendance of any person to whom a summons has been issued under section 30 and for that purpose may-

(a) issue a warrant for his arrest; (b) attach and sell his property; (c) impose a fine upon him 1not exceeding five thousand rupees; (d) order him to furnish security for his appearance and in default commit him to the civil prison.”

We hold that the assessing authority, which is a quasijudicial authority, has failed to exercise the power contained in section 32 of the Code of Civil Procedure. We hope the assessing authority would act in accordance with the Act and the Rules and keep in mind that he has not only to act fearlessly but fairly while dealing with matters concerning interest of the revenue of the State.”

35. In the overall view of the matter, we are convinced that no case is made out by the writ applicant for the purpose of getting the impugned summons under Rule 83 of the Second Schedule to the Act, 1961 declared as illegal or erroneous in law. We hold that it is permissible for the authority concerned to secure and enforce the personal attendance of the assessee/defaulter for the purpose of necessary inquiry pursuant to the summons under Rule 83 of the Second Schedule to the Act, 1961. To put it in other words, for effective and expeditious disposal of the recovery proceedings, it is always permissible for the Tax Recovery Officer to call for necessary and relevant information and conduct an inquiry by securing and enforcing the personal attendance of the assessee/defaulter.

36. In the result, this writ application fails and is hereby rejected. Notice is discharged.

37. We may clarify, at this stage, that it shall be open for the writ applicant to ask his legal representative or the chartered accountant to accompany him for the purpose of appearing before the respondent No.1. The respondent No.1 shall permit the writ applicant to remain personally present along with any of his legal representative or the chartered accountant. We would also like to say that there should not be any unnecessary harassment to the writ applicant. The writ applicant is duty bound to cooperate in the inquiry and furnish all the necessary details or information to the Tax Recovery Officer, but at the same time, there should not be any unnecessary wait or detention in the office.

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