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Informative

Auction By Based On Non-Existent Order; Punjab & Haryana High Court Imposes Cost On Income Tax Authorities

Update / Judgement Date

09 Jun 2024

Source

Live Law

Author

Team — WCP Legal Desk

Reading Time

1 min read

Income Tax

The Punjab and Haryana High Court ruled that auction proceedings based on a quashed ex-parte ITAT order are void from the beginning. Justices directed the department to restore the petitioner-HUF's properties from auction purchasers, nullifying any subsequent transfers. \r


The petitioner challenged the auction to recover assessed tax against the HUF. The court found the auction void ab initio due to the flawed ITAT order. Despite no stay, the court emphasized that auction purchasers knowingly acquired contested properties. Refunding the auction price plus 15% annual interest from 1985 was ordered. \r


Failure to comply within a month would invite contempt proceedings. \r


Additionally, the Income Tax Authorities were instructed to pay Rs. 1,00,000 as costs to the petitioner.