Kawar Pal Vs ITO (Allahabad High Court)
Introduction
The Allahabad High Court recently addressed the procedural complexities surrounding re-assessment proceedings initiated against the estate of a deceased individual. While the Court declined to quash the re-assessment order under its extraordinary writ jurisdiction, it provided significant procedural safeguards to the legal representative (LR) regarding the filing of a statutory appeal and protection from coercive measures.
Background and Facts
The petitioner, Kawar Pal, challenged a re-assessment order dated March 18, 2025, passed for the Assessment Year 2016-17 in relation to the estate of the deceased, Bhagwati.
The petitioner raised two primary jurisdictional objections:
- Failure to Notify All LRs: Although the deceased was survived by four sons and three daughters, the Revenue department singled out the petitioner and failed to serve notice on the other six legal representatives.
- No Receipt of Estate: The petitioner contended that he had not received any portion of the deceased’s estate, rendering the proceedings against him improper.
The Revenue argued that because the petitioner had participated in the proceedings, submitted replies, and raised objections after receiving the initial notice on January 13, 2025, the matter should be resolved through a statutory appeal rather than a writ petition.
Findings of the Court
The Court evaluated the timing and nature of the challenge, noting the following:
- Diligence in Writ Petitions: Interference in re-assessment matters is typically offered at the notice stage. In this case, the petitioner approached the Court in May 2025, two months after the final order was passed.
- Factual Disputes: The Court held that issues regarding the status of legal representatives and the distribution of the estate require a detailed examination of evidence, which is more appropriate for a statutory appeal.
- Alternative Remedy: Since the re-assessment order is undisputed as being appealable, the Court emphasized that the petitioner should exhaust the regular statutory remedy.
Final Ruling and Directions
The Writ Petition was disposed of with specific observations to protect the petitioner’s rights during the appellate process:
1. Limitation Waiver: If the petitioner files a statutory appeal within two weeks, it must be entertained on its merits without raising objections regarding delays.
2. Protection from Coercion: No coercive measures are to be adopted against the petitioner for six months or until the conclusion of the appeal, provided he cooperates with the proceedings.
3. Electronic Filing: To facilitate the appeal process, the petitioner is permitted to use the PAN allotted by the authorities for the impugned order.
4. No Acquiescence: The Court clarified that filing the appeal using the assigned PAN would not be treated as the petitioner’s acceptance of an “altered status as an artificial juridical person”.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Nitin Gulati (through V.C.) alongwith Sri Pratik Chandra learned counsel for the petitioner and Sri Ankur Agarwal learned Standing Counsel for the revenue.
2. Challenge has been raised to the re-assessment order dated 18.03.2025 passed on the estate of the deceased Bhagwati for the Assessment Year 2016-17 under Income Tax Act, 1961.
3. Submissions have been advanced that the re-assessment proceedings are wholly without jurisdiction and/or contrary to the law inasmuch as the present petitioner Kawar Pal (Kanwar Pal) is one of the legal representatives of the deceased Bhagwati and that he has not received any part of the estate of the deceased Bhagwati. Further submission has been advanced that the present petitioner has been singled out and no notice has been served on the other legal representative of deceased Bhagwati. In that regard, it has been submitted, the deceased Bhagwati is survived by four sons (including the present petitioner) and three daughters. Though this fact was known to the respondents, no notice came to be issued to the other legal representatives of the deceased Bhagwati.
4. On the other hand, learned Standing Counsel for the revenue would submit, the petitioner was not only served with the re-assessment notice but that he participated in the proceedings inasmuch as he submitted replies and raised objections. Therefore, all issues being raised in this petition may remain to be tested in the statutory appeal proceedings. However, no interference may be offered under the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.
5. Having heard learned counsel for parties and having perused the record, in the first place, it is undisputed that the re-assessment order dated 18.03.2025 is appealable. Though, a re-assessment proceeding may remain open to challenge on ground of lack of jurisdiction, it is equally settled principle that the writ court may interfere in such proceedings on that ground, subject to the aggrieved assessee approaching the Court with diligence.
6. It is equally settled practice of the writ court that interference in such matters is normally offered at the stage of issuance of the re-assessment notice and mostly before conclusion of those proceedings.
7. In the present facts, the re-assessment notice was issued to the petitioner on 13.01.2025. The re-assessment order was passed after two months on 18.03.2025 whereas the instant petition was first filed in May 2025. Thus, the instant writ petition has been filed after conclusion of the re-assessment proceedings.
8. To the extent, the petitioner is the legal representative of the deceased Bhagwati who had been served with the re-assessment notice and had participated in those proceedings, we are not inclined to offer interference in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, at this stage. All issues being raised by the petitioner may require facts to be examined and evidence to be led and considered. That may be done, more appropriately in regular /statutory appeal proceedings.
9. At the same time, we note that the writ petition has remained pending for almost six months and interim order has also been passed in favour of the petitioner.
10. Accordingly, at present, writ petition is disposed of with the observation, subject to the petitioner filing statutory appeal within two weeks from today, same may be entertained and decided on merits, without raising any objection as to limitation.
11. Further, in view of the interim order already granted, it is provided, subject to the petitioner cooperating in the appeal proceedings, same may be concluded expeditiously within five months from the date of its institution. For a period of six months or till conclusion of the appeal proceedings, whichever is earlier, no coercive measures may be adopted against the petitioner, in view of the indulgence already granted.
12. For the purpose of filing statutory appeal through electronic mode, we further observe that the petitioner may be permitted to file his appeal against the PAN allotted by the income tax authorities for the purpose of passing the impugned order. However, that may not be treated to be acquiescence on part of the petitioner to accept his altered status as artificial juridical person.
