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Legal representative shall be liable to pay taxes etc

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25th-Feb-2017       
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Appellate Division
(Civil)
Surendra Kumar Sinha CJ
Syed Mahmud Hossain J
Hasan Foez Siddique J
Mirza Hussain Haider J
Judgment
March 29th, 2016
Assistant Commissioner of Taxes, Salaries and
anothers Appellant
vs
BM Baker Hossain and others……………. Respondents
Income Tax Ordinance (XXXVI of 1984) Section 92
Legal representatives shall be liable to pay tax or other sum payable under Ordinance but the liabilities of the legal representatives under this Ordinance shall be limited to the extent to which the estate of the deceased is capable of meeting the liability. . ..... (17)
Income Tax Ordinance (XXXVI of 1984)
Sections 169 and 17(1)(2)
Sanction and corum-non-judice-The process of sanction is all administrative act and is not subject to any judicial scrutiny. Since the Chairman of NBR is an inseparable and essential constituent part for the Board to function, the sanction given by it cannot be taken to be in any way tainted for his presence on the Board. The principle of coum-non-judice has no manner of application in the case. ………... ... (12)
Income Tax Ordinance (XXXVI of 1984)
Section 92
Tax is recoverable from the heirs of deceased as per provision of Section 92 of the Ordinance. . ..... (16)
Sections 165 and 166
Launching of criminal case against any person under Sections 165 and 166 of the Ordinance is a separate and independent proceeding of the ones provided for assessment and realization of penalty. . ..... (13)
Iqbal Hasan Mahmood vs Government of Bangladesh, 60 DLR 88 and Government of Bangladesh vs Iqbal Hasan Mahmood, 60 DLR (AD) 147 ref.
Mahbubey Alam. Attorney-General (with Mahfuza Begum, Assistant Attorney-General), instructed by Md Zahirul Islam, Advocate-on Record-For the Appellant (In both the appeals).
None appeared-For the Respondents (In CP No. 95 of 2009).
AJ Mohammad AU, Senior Advocate, instructed by Zainul     Abedin, Advocate-on-Record-For the Respondents (In CP No 96 of 2009).
Judgment
Syed Mahmud Hossain J : These appeals, by leave, are directed against the judgment and order dated 12-3-2008 passed by the High Court Division in Writ Petition Nos. 8339 and 8140 of 2007 making the Rules absolute.
2. Both the appeals involving similar questions of laws and facts having been heard together are now disposed of by this single judgment.
 3. The facts, leading to the filing of these two appeals, in a nutshell, are:
BM Baker Hossain, respondent No. 1 of Civil Appeal No. 95 of 2009, filed Writ Petition No. 8339 of 2007 challenging the legality of the initiation and continuation of the proceeding of Special Case No. 13 of 2007 pending in the Fourth Court of Special Judge, Dhaka, on the averments that on 29-9-1976, he joined Sonali Bank as Junior Clerk and was then promoted to the post of Sub-Accountant. While serving in that capacity, he was arrested by the law enforcing agency in connection with Motijheel PS General Diary No.1895 dated 27-2-2007 under Rule 16(2) of the Emergency Power Rules, 2007 and subsequently, he was sent to custody in Dhaka Central Jail with an order of preventive detention under the Special Powers Act, 1974. Being asked by notice under Section 26(1) of the Anti-Corruption Commission Act, 2004, on 22-2-2007, he furnished his statement of wealth and liability. While he was in custody, an Assistant Director of the Anti-Corruption Commission lodged Motijheel PS Case No. 113 dated 22-2-2007 against him and his wife Nazma Hossain under Sections 26(2) and 27(1) of the Act, 2004 read with Section 5(2) of the Prevention of Corruption Act, 1974 and Rule 15(gha)(5) of the above Rules, 2007, alleging, that he in his statement dated 22-2-2007, furnished untrue statements and he and his wife acquired properties worth about Taka 1,25,27,015 which were disproportionate to their known source of income and the said case is still under investigation and he has been shown arrested in the said case. He did not submit any return under Section 76 of the Income Tax Ordinance, 1984 as his salary income did not exceed the limit of chargeable tax but his wife, Nazma Hossain, being owner of properties and having taxable income, used to file income tax returns. While the above Motijhel PS Case No. 113 dated 22-2-2007 for evading tax was pending, an Assistant Commissioner of Taxes on 30-7-2007 filed a petition of complaint before the Metropolitan Sessions Judge-Cum-Senior Special Judge, Dhaka, against him under Sections 164(c) and 166 of Ordinance, 1984 read with Rule 15 of the said Rules, 2007. In the petition of complaint, it is alleged that in terms of the requisition made under Section 113(f) of Ordinance, 1984, respondent No.1 furnished statements and the contents of same regarding his Staff Saving Account maintained in the Local Office of Sonali Bank, Dhaka and MSSA Account maintained in Islami Bank Bangladesh Ltd, show that he had taxable income from salary and other sources between assessment years 2000-2001 and 2006-2007 and on 1-6-2007, TIN No. 179-109-5353/Salaries-12 was issued in his name but he stated that he had no TIN and did not file return in any view of the matter before filing the petition of compliant against him. No notice under Section 77 of the Ordinance,
1984 was issued asking him, to file return or to explain his position and/or no proceeding under Sections 93 or 124 or 128 of the Ordinance, 1984 was initiated against him. On receipt of the above- petition of complaint, the learned Metropolitan Sessions Judge-Cum- Senior Special Judge, Dhaka, by order dated 30-7-2007, took cognizance of the offence against him under sections 164( c) and 166 of Ordinance, 1984 and registered the same as Metropolitan Special Case No.53 of 2007 and issued warrant of arrest against him. The learned Special Judge sent the case records to the Special Judge, Court No.4, Dhaka for speedy disposal. On receipt of the case records, the learned Special Judge by order dated 6-8-2007 registered the case as Special Case No.13 of 2007 and fixed the next date on 12-8-2007 for framing charge  and then by order dated 14-8-2007 charges were framed against respondent No.1 under Sections 164 (c) and 166 of the Ordinance, 1984. The High Court Division then by order dated 10-3-2008 issued Rule and stayed all further proceedings of the above Special Case No. 13 of 2007.
4. Md Chowdhury Alam, respondent No.1 in Civil Appeal No. 96 of 2009, filed Writ Petition No.8140 of 2007 challenging the legality of the initiation and continuation of the proceedings of Special Case No. 19 of 2007 pending in the Court of learned Special Judge, Fourth Court, Special Judge, Dhaka. His case, in short, is that he was a genuine businessman and started paying income tax by opening TIN and he paid tax from the assessment years 1991-1992 up to 2006-2007 and before submission of his last income tax return for the current assessment year, that is, 2007-2008 he had to surrender before the Court of Metropolitan Magistrate, Dhaka on 22-2-2007 in Ramna PS Case No. 53(12) 2006 and then he was sent to custody by the Court. While he was in custody, a Deputy Commissioner of Taxes filed a petition of complaint against him in the Court of Metropolitan Sessions Judge-Cum-Senior Special Judge, Dhaka. It is alleged that he concealed the value of his assets and his total income amounting to Taka 1,17,59,795 with intention to avoid the payment of taxes and thus he committed offences under Sections 164(c) and 166 of the Ordinance, 1984. On receipt of the above petition of complaint, the learned Senior Special Judge, Dhaka, by his order dated 27-8-2007, took cognizance of the offence against him under Section 165 of the Income Tax Ordinance, 1984 and registered the same as Special Case No.19 of 2007 and then by order dated 2-9-2007, transferred the case records to the Special Judge, Court No.4, Dhaka for trial. After that, the learned Special Judge, Court No.4, Dhaka, on receipt of the case records, by order dated 2-9-2007 registered the case as Special Case No.19 of 2007.
At this stage, respondent No. 1 filed an application under Section 265C of the Code of Criminal Procedure for his discharge on the grounds that without any prior notice under Ordinance, 1984, the above proceedings have been initiated against him and the proceeding is also barred by law. But the learned Special Judge by an order dated 14-8-2007, framed charge against respondent No. 1 under Sections 164(c) and 166 of the Ordinance, 1984. While issuing Rule, the High Court Division stayed further proceedings/trial of the above Special Case No. 19 of 2007.
5. The High Court Division made both the Rules absolute by the impugned judgment and quashed the proceedings of both the Special Case.
6. Feeling aggrieved by and dissatisfied with the judgment and order passed by the High Court Division, the writ-respondents filed Civil Petitions for Leave to Appeal Nos. 1770 & 1815 of 2008 before this Division, in which, leave was granted on 23-11-2008, resulting in Civil Appeal Nos. 95 & 96 of 2009.
7. Mr Mahbubey Alam, learned Attorney-General, appearing on behalf of the appellants of both the appeals, submits that the Deputy Commissioner of Taxes may initiated criminal proceeding under Sections 165 and 166 of the Income Tax Ordinance, 1984 even without reopening any closed assessment of any assessment year in an appropriate case and that the High Court Division without considering this aspect made the Rules absolute. He further submits that the process of sanction is an administrative act and is not subject to any judicial scrutiny and that since the Chairman of NBR is an inseparable and essential constituent part of the Board to function, the sanction given by it cannot be taken to be anyway tainted for his presence on the Board and, as such, the principle of corum-nan-judice has no manner of application in the present case and, as such, the impugned judgment should be set aside. He also submits that respondent No. 1 of Civil Appeal No. 95 of 2009 is dead and respondent No.1 of Civil Appeal No. 96 of 2009 has not been traceable for a long period of time and the criminal proceedings initiated against them abated even then tax is recoverable from the legal representatives of the deceased respondents as per· Section 92 of the Ordinance.
8. Mr AJ Mohammad Ali, learned Senior Advocate, appearing on behalf of the respondents of Civil Appeal No. 96 of 2009, on the other hand, submits that the criminal proceeding initiated against respondent No.1 abated as he is not traceable for a long time and that the income tax department is not legally permitted to realize taxes from the heirs of respondent No.1.
9. We have considered the submissions of the learned Attorney-General for the appellant of both the appeals and Mr AJ Mohammad Ali for the respondent No. 1 of Civil Appeal No. 96 of 2009, perused the impugned judgment and the materials on record.
10. Before entering into the merit of both the appeals, it would be necessary to go through the grounds, for which, leave was granted. The grounds are quoted below:
"The High Court Division has failed to consider that in the complaint petition, which was registered as Metro Special Case No.99 of 2007, prima facie case under Sections 165 and 166 of the Income Tax Ordinance, 1984 was made out for concealment of income investment and assets repeatedly from the assessment year 1991-1992 to 2005-2006 on making false statement in verified to the return repeatedly for the assessment years from 1991-1992 to 2005-2006 and the case was apparently based on documentary evidence on record; further the High Court Division in passing the impugned judgment and order relied on the ratio decidendi laid down in the case of Iqbal Hasan Mahmood vs Government of Bangladesh reported in 60 DLR 88 but the said decision has been reversed by the Appellate Division in the case of Government of Bangladesh vs Iqbal Hasan Mahmood reported in 60 DLR (AD) 147."
11. Relying upon the case of Iqbal Hasan Mahmood alias Iqbal Hasan Mahmood Tuku vs Government of the People's Republic of Bangladesh, (2008) 60 DLR 88, the High Court Division found that the instant cases were initiated without lawful authority and the sanction accorded in the instant cases suffered from corumnon-judice. Therefore, the High Court Division made the Rules absolute and the special cases pending before the Special Judge, Court N·o.4, Dhaka, commenced and continued without lawful authority and to be of no legal effect.
12. What is important to mention here is that the principles expounded in the case of Iqbal Hasan Mahmood alias Iqbal Hasan Mahmood Tuku vs Government of the People's Republic of Bangladesh, 60 DLR 88 had been overruled by this Division in the case of Government of the People's Republic of Bangladesh vs Iqbal Hasan Mahmood alias Iqbal Hasan Mahmood Tuku 60 DLR (AD) 147. In that case, this Division held that the process of sanction is an administrative act and is not subject to any judicial scrutiny. Further, since the Chairman of NBR is an inseparable and essential constituent part for the Board to function, the sanction given by it cannot be taken to be in any way tainted for his presence on the Board. The principle of corum-non-judice has no manner of application in the present case.
13. This Division in the above case further held launching of criminal case against any person under Sections 165 and 166 of the Income Tax Ordinance is a separate and independent proceeding of the ones provided for assessment and realization of penalty.
14. In view of the principle expounded by this Division in the above case, we are of the view that the High Court Division was not justified in quashing both the special cases pending before the Special Judge, Court No.4, Dhaka.
15. Admittedly, respondent No. 1 of Civil Appeal No. 95 of 2009 is dead and respondent No.1 of Civil Appeal No. 95 0f 2009 has not been traced out for a long time. Therefore, both the appeals abated.
16. Notwithstanding the abatement of both the Special Cases, tax is recoverable from the heirs of deceased respondent No.1, BM Baker Hossain of Civil Appeal No.95 of 2009 and respondent No.1, Md Chowdhury Alam of Civil Appeal No. 96 of 2009 as per provision of Section 92 of the Income Tax Ordinancc, which runs as under:
92. Assessment in case of income of a deceased person. -
(1) Where a person dies, his legal representative shall be liable to pay any tax or other sum payable under this Ordinance which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.; and the legal representative of the deceased shall, for the purpose of this Ordinance, be deemed to be an assessee :
Provided that before deeming the legal representative of the deceased to be an assessee, a notice to that effect shall be issued to him by the Deputy Commissioner of Taxes.
17. In view of Section 92, we are of the view that the legal representatives of respondent No. 1 of both the appeals shall be liable to pay tax or other sum payable under this Ordinance but the liabilities of the legal representatives under this Ordinance shall be limited to the extent to which the estate of the deceased is capable of meeting the liability.
18. Accordingly, both the appeals are disposed of and the impugned judgment delivered by the High Court Division is set aside and the proceedings of the Special Cases pending before the Special Judge, Dhaka abated and the appellant is at liberty to recover taxes from the heirs of respondent No. 1 of both the appeals as per Section 92 of the ordinance.

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