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Judgment
R.M. Savant, J.—Rule. With the consent of the parties made returnable forthwith and heard.
By the above petition filed under Article 226 of the Constitution of India, the Petitioner which is a Hindu Undivided Family challenges the debit of Rs. 63,59,240/- from the account of the Petitioner for the liability of Naresh B. Chheda who is the Karta of the Hindu Undivided Family. The Petitioner also prays that the Respondent No. 1 be directed to re-credit the said amount in the account of the Petitioner.
Shorn of unnecessary details, the facts necessary to be cited for adjudication of the above Petition can be stated thus:
As stated hereinabove, the Petitioner is a Hindu Undivided Family (HUF for short), consisting of one Naresh Chheda as its Karta, his wife Nandita Chheda, son Master Pranav Naresh Chheda and daughter Rujuwalika Naresh Chheda, as an independent legal entity, the Petitioner has a Permanent Account Number and is assessed to Income Tax.
The Karta of the Petitioner Naresh Chheda in his individual capacity and under his PAN number filed his Income Tax Return for the Assessment Year 2007-2008 with the Department. In respect of the said return, an assessment order dated 29-12-2009 came to be passed under the signature of the Respondent No. 1 herein and by the said assessment order, an addition of Rs. 1,49,01,030.00 was made and the said Naresh Chheda was directed to pay further Tax. A notice of demand u/s 156 of the Income Tax Act, 1961 (for short the said Act) was issued calling upon the said Naresh Chheda to pay further tax of Rs. 63,59,240/-. The said Naresh Chheda filed an Appeal u/s 246(A) before the Commissioner of Income Tax (Appeals)-29, challenging the said order dated 29-12-2009. The said Naresh Chheda, by a letter dated 20-1-2010, addressed to the Respondent No. 1 requested that the demand of tax be kept in abeyance in terms of Section 220(6) of the said Act, till the Appeal is finally disposed of. Thereafter, a demand notice u/s 226(C) of the said Act came to be issued to the Respondent No. 2 Bank by the Respondent No. 1 to forthwith pay to the Respondent No. 1 a sum of Rs. 63,59,240/- from the account of the said Naresh Chheda, being Saving Account No. 623701063436. Simultaneously, the Respondent No. 1 also issued the demand notice to the Respondent No. 2 directing the Respondent No. 2 to forthwith debit the account of the Petitioner HUF being account No. 623705016782 for a sum of Rs. 63,59,240/- and pay the same to the Respondent No. 1. It is the case of the Petitioner that the Respondent No. 2 without even informing the Petitioner or verifying in whose name the alleged demand notice dated 3-3-2010 was issued, debited the account of the Petitioner and remitted to the Respondent No. 1 the said sum of Rs. 63,59,240/-. The Petitioner came to know of the said debit on 5-3-2010. The Petitioner immediately issued an Advocates Notice dated 10-3-2010 calling upon the Respondent No. 2 bank to give explanation for the said illegal debit. The Respondent No. 2 replied to the said notice by its reply dated 22-3-2010 and stated that the debit has been made pursuant to the demand notice dated 3-3-2010 issued by the Respondent No. 1 towards the payment of income tax. The Respondent No. 2, it seems, along with its reply, also enclosed a communication dated 5-3-2010 addressed by the Respondent No. 1 to Respondent No. 2 withdrawing its purported demand notice dated 5-3-2010, concerning the Petitioners account. The Petitioner thereafter, issued its Chartered Accountant�s letter dated 31-5-2010, addressed to the Respondent No. 1, requesting to refund/return the amount of Rs. 63,59,240/- which according to it, was wrongly debited from the account of the Petitioner. The Respondent No. 1 in turn, addressed a communication dated 7-6-2010 to the said Naresh Chheda in his individual capacity, contending that the account of the Petitioner, which has been debited, stands jointly in the names of the Petitioner as well as the said Naresh Chheda. As indicated above, aggrieved by the fact that the Petitioner�s account has been debited for the liability of the said Naresh Chheda in his individual capacity that the Petitioner has invoked the writ jurisdiction of this Court.
We have heard the Learned Senior Counsel Mr. Pardiwala for the Petitioner and the Learned Counsel Shri Vimal Gupta for the Respondent No. 1. The short question which arisen in the above Petition is whether the account of the HUF i.e. Petitioner could be debited for the tax liability incurred by Naresh Chheda , in his individual capacity.
It is an undisputed position that the said Naresh Chheda is the Karta and the HUF, is constituted of his Wife, Son and Daughter, who are the other members.
We are also informed at the bar that the daughter is a minor. The said Naresh Chheda a constituent of the HUF would, therefore, have an undivided share in the amount lying in the bank account of the HUF. The Respondent No. 1, therefore, would not be entitled to attach and appropriate entire amount which was in the account of the HUF for the liabilities of the said Naresh Chheda as an individual, it can only attach and appropriate the amount in credit in the bank account of the HUF only to the extent falling to the share of the said Naresh Chheda. The said legal position was also not disputed by the Learned Counsel appearing for the parties.
The Learned Senior Counsel for the Petitioner, Shri Pardiwala, during the course of the hearing of the above Petition, upon taking instructions, agreed to intimate the amount falling to the share of the said Naresh Chheda in the bank account of the HUF, so that the amount excluding the amount falling to the share of Naresh Chheda, could be returned by the Income Tax Department to the Bank so as to credit the same in the HUF account from which the amount was withdrawn by the Income Tax Department. The Learned Senior Counsel fairly submitted that the same would be done by the Petitioner within the time that will be stipulated by this Court.
In our view, considering the fact that the tax liability was that of Naresh Chheda in his individual capacity, the action of the Respondent No. 1 claiming the amount from the account of the HUF with Respondent No. 2 to the extent it does not fall to the share of Naresh Chheda in the HUF, is unsustainable, is required to be set aside.
On the Petitioner�s intimating the share of the said Naresh Chheda in the said account No. 623705016782 of the HUF to the Respondent No. 1 by 30-10-2010, the Respondent No. 1 shall redeposit the amount, excluding the share of Naresh B. Chheda within two weeks of the intimation by the Petitioner failing which the amount shall carry interest @ 12% per annum till the payment in full and final.
The said debited amount coming to the share of Naresh Chheda would lie with the Respondent No. 1, subject to the result of the Appeal filed by Naresh Chheda and the orders that may be passed in further proceedings that may be adopted by the parties.
Rule is accordingly made absolute in the aforesaid terms with parties to bear their respective costs.