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Bhuramal Vs. Income-tax Officer, a Ward, Akola, and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Application No. 658 of 1968
Judge
Reported in[1971]82ITR747(Bom); 1971MhLJ183
ActsIncome Tax Act, 1961 - Sections 2 and 2(44) - Schedule - Rule 86 and 86(1); Madhya Pradesh Land Revenue Code - Sections 41
AppellantBhuramal
Respondentincome-tax Officer, a Ward, Akola, and ors.
Appellant AdvocateS.N. Kherdekar, Adv.
Respondent AdvocateV.R. Manohar, Adv.
Excerpt:
.....madhya pradesh land revenue code - petitioner's application for setting aside sale rejected by tax recovery officer on grounds of non-compliance of necessary provisions of rules framed under act - said order confirmed by commissioner - petition against order of commissioner - if statute gives only one right of appeal than litigant cannot claim any further right - he must be restricted only to fight which has been given to him under statute - legislature has provided for only one right of appeal whether matter falls under clause (a) or clause (b) of rule 86 (1) - petitioner does not have further right of appeal and revision to collector or commissioner - commissioner right in holding that no further appeal or revision maintainable against either appellate order of sub-divisional officer..........thereafter, a recovery certificate was issued by income-tax officer and he sent it to the tax recovery officer, who was a tahsildar in the present case. after attachment of the property of the petitioner and the sale-proclamation, etc., sale was held on august 31, 1966, which brought rs. 46,500 as sale proceeds. the petitioner then applied for setting aside the said sale under rule 61 of schedule ii of the income-tax act. this application was not accompanied by any deposit of the arrears for which the petitioner was held liable. by an order dated october 4, 1966, the tax recovery officer (tahsildar) rejected the application and confirmed the sale in favour of the respondent no. 4. the petitioner had alleged some irregularities in the publishing and the conduct of the sale. all these.....
Judgment:

Padhye, J.

1. A few facts are necessary to appreciate the point involved in this case. The respondent No. 5 was assessed to income-tax and his liability had been fixed at Rs. 86,731.02. The petitioner owed some amount to the respondent No. 5 and the respondent No. 5 filed a special civil suit being No. 5 of 1964 against the petitioner claiming an amount of Rs. 1,15,000 from him. During the pendency of this suit, the Income-tax Officer came to know about this suit and on August 19, 1964, issued a notice to the petitioner directing him not to pay the amount due from him to the respondent No. 5 but to pay the same to the Income-tax Officer. On December 31, 1964, another notice was issued by the Income-tax Officer. On December 31, 1964, another notice was issued by the Income-tax Officer to the petitioner requiring him to appear before him on January 30, 1965. The suit, however, ended in a consent decree for an amount of Rs. 45,000 on June 28, 1965. The petitioner, who was liable under the decree to the respondent No. 5, who was the original defaulter, was deemed to be a defaulter within the meaning of section 226(3)(x) of the Income-tax-Act, 1961. Thereafter, a recovery certificate was issued by Income-tax Officer and he sent it to the Tax Recovery Officer, who was a Tahsildar in the present case. After attachment of the property of the petitioner and the sale-proclamation, etc., sale was held on August 31, 1966, which brought Rs. 46,500 as sale proceeds. The petitioner then applied for setting aside the said sale under rule 61 of schedule II of the Income-tax Act. This application was not accompanied by any deposit of the arrears for which the petitioner was held liable. By an order dated October 4, 1966, the Tax Recovery Officer (Tahsildar) rejected the application and confirmed the sale in favour of the respondent No. 4. The petitioner had alleged some irregularities in the publishing and the conduct of the sale. All these contentions were negatived by the Tax Recovery Officer and further the Tax Recovery Officer also held that the petitioner failed to comply with the mandatory provisions of rule 61 proviso (b) of the Rules framed under the Income-tax Act, 1961, and therefore, the objections of the petitioner could not be considered and had to be disallowed. Against this order, the petitioner filed an appeal on July 24, 1967, before the Sub-Divisional Officer purporting to be an appeal under rule 86(1) (b) of the Income-tax Rules. The Sub-Divisional Officer by an order dated July 24, 1967, dismissed the appeal and confirmed the order of the Tahsildar, i.e., the Tax Recovery Officer. He had also held that the petitioner failed to deposit the amount of the tax claimed from him and on account of his failure to observe the mandatory provisions of rule 61, proviso (b), the application of the petitioner for setting aside the sale could not be considered. This order of the Sub-Divisional Officer was further challenged by the petitioner before the Deputy Collector with revenue appellate powers, By his order dated September 5, 1967, the Deputy Collector upheld the preliminary objections on behalf of the respondent No. 4 that the second appeal was not maintainable as the Income-tax Rules provided for one appeal only. This order was again challenged by way of a revision application before the Commissioner. The Commissioner rejected the revision application on the ground that no revision was provided under rule 86 of the Income-tax Rules.

2. After the deputy Collector held the appeal to him as not maintainable by his order dated September 5, 1967, the petitioner filed an appeal on September 15, 1967, direct to the Commissioner challenging the order of the Tax Recovery Officer dated October 4, 1966. This appeal has also been dismissed by the Commissioner by him order dated July 24, 1968, as being not maintainable. It is these orders of the Commissioner which are challenged in the present petition by the petitioner.

3. It is contended on behalf of the petitioner that a direct appeal to the Commissioner from the order of the Tax Recovery Officer was maintainable under clause (a) of sub-rule (1) of rule 86. This clause reads as under :

'(1) An appeal from any original order passed by the Tax Recovery Officer under this schedule, not being an order which is conclusive, shall lie - (a) in the case of a Tax Recovery Officer, being a collector or an Additional Collector or an officer referred to in sub-clause (iii) of clause (44) of section 2, to the revenue authority to which appeals ordinarily lie against the orders of a Collector under the law relating to land revenue of the State concerned.'

4. A Tax Recovery Officer under section 2(44) means :

'(i) a Collector or an Additional Collector;

(ii) any such officer empowered to effect recovery of arrears of land revenue or other public demand under any law relating to land revenue or other public demand for the time being in force in the state as may be authorised by the state Government, by general or special notification in the official gazette, the exercise the powers of a Tax Recovery Officer;

(iii) and gazetted officer of the Central or a State Government who may be authorised by the Central Government, by general or special notification in the official gazette, to exercise the powers of a Tax Recovery Officer;

4. Under the law relating to land revenue in the State and with respect top the period in question, an appeal ordinarily lies against the order of a Collector to the Commissioner. Therefore, under clause (a), the appellate authority would be the Commissioner. However, an appeal can lie to the Commissioner only where the Tax Recovery Officer is a Collector or an Additional Collector, or is a gazetted officer of the Central or a state Government, who may be authorised by the Central Government by general or special notification in the official gazette to exercise powers of a Tax Recovery Officer. The Tax Recovery Officer, in the instant case, therefore, does not fall in any of the categories given in clauses (i) and (iii) of sub-section (44) of section 2 of the income-tax Act, 1961. In view of this, though under clause (a) of sub-rule (1) of rule 86, the Commissioner is the appellate authority, no appeal can lie to him against the order of the Tax Recovery Officer who in this case is a Tahsildar and not an authority of any of the categories mentioned in clauses (i) and (iii) of sub-section (44) of section 2. The Commissioner, therefore, was right in dismissing the appeal before him as not maintainable.

5. After the dismissal of the appeal against the order of the Tax Recovery Officer by the Sub-Divisional Officer, the petitioner filed an appeal before the Collector. The Collector dismissed the appeal as not maintainable and the revision filed by the petitioner before the Commissioner against the order of the Collector was also rejected by him as not maintainable. The Government of Maharashtra issued a notification dated August 14, 1963, under section 2(44)(ii) of the Income-tax Act, 1961 (43 of 1961), and the Income-tax (Certificate Proceedings) Rules, 1962, authorising every assistant Collector, Deputy Collector, Mamlatdar, Tahsildar and Mahalkari who has been empowered to effect recovery of arrears of land revenue under the Bombay Land Revenue Code or, as the case may be, the Hyderabad land Revenue act to exercise the power of a Tax Recovery Officer under the Income-tax Act, 1961, in respect of the area relating to the recovery of arrears of land revenue under the land revenue laws aforesaid. This notification was made effective from the 1st day of April, 1962. In cases not covered by clause (a) of sub-rule (1) of rule 86 of the Income-tax Rules, an appeal is provided to the revenue authority to which an appeal or an application for revision would ordinarily lie, if the order passed by him were the order under the law relating to land revenue or to her public demand for the time being in force in the State concerned. The right of appeal against the order of the Tax Recovery Officer is given by rule 86 of the said rules. Under the law relating to land revenue, an appeal from the order of the Tahsildar would lie to the Sub-Divisional Officer. As in section 41 of the M. P. Land Revenue Code, under clause (b) of rule 86(1) an appeal against the instant order of the tax Recovery Officer would lie to the Sub-Divisional officer. Such appeal was file by the petitioner and has been dismissed by the Sub-Divisional Officer on merits. It is, however, contended on behalf of the petitioner that a second appeal lies further against the order in appeal by the Sub-Divisional Officer and a further revision would lie against the order of the second appellate court to the Commissioner, by virtue of the second appellate court to the Commissioner, by virtue of the provisions of section 41 of the M. P. land Revenue Code. It is no doubt true that in cases arising under the laws relating to land revenue a second appeal is provided to the Collector against an order passed in appeal by the Sub-Divisional Officer vide sub-Divisional Officer vide sub-section (2) of section 41 and further section 46 gives a right to the Commissioner to entertain a revision against the order of the Collector. The right of appeal, however, has to be found under the Income-tax Act or the rules made thereunder as the right of appeal or appeals against the order of the Tax Recovery Officer is provided thereunder. Reading rule 86 of the Rules, it is clear that whether the matter falls under clause (a) or clause (b) there is only one right of appeal provided, one to the Commissioner under clause (a) and the other to such authority which would be the appellate authority or the officer who has been empowered as a Tax Recovery Officer. Rule 86 also does not provide that once an order is passed by a Tax Recovery Officer his order will be subjected to the appeals or revision under the Madhya Pradesh Land Revenue Code or any other law relating to land revenue or to her public demand. We cannot, therefore, read all the provisions of section 41 of the M. P. Land Revenue Code into rule 86(1)(b) as is contended for on behalf of the petitioner. It is urged that on a proper interpretation of clause (a) and clause (b) of rule 86(1), the matter could be finally dealt with by the highest revenue authority, namely, the Commissioner; whereas in matters falling under clause (b) the finality could be limited only to the order of the Sub-Divisional Officer if the tax Recovery Officer happens to be a Tahsildar. We do not see any incongruity in these positions. It may be that in a given case where the lowest authority is empowered as a Tax Recovery Officer, the final appellate authority would be the Sub-Divisional Officer. In another instance, where the Tax Recovery Officer is a Collector, then the appeal would lie to the Commissioner. What, is however, seen from the two provisions providing of the appeal is that only one appeal ins provided in either case, whether it be to the Commissioner or to the lower authority. If the statute gives only one right of appeal, the litigant cannot claim any further right and he must be restricted only to the fight which has been given to him under the statute. In its wisdom the legislature has provided for only one right of appeal whether the matter falls under clause (a) or clause (b). We are, therefore, unable to accept the contention on behalf of the petitioner that in cases falling under clause (b) of rule 86(1), there is a further right of appeal and revision to the Collector and the Commissioner, respectively. In our view, the Deputy Collector with revenue appellate powers as well as the Commissioner took the correct view that no further appeal was maintainable against the appellate order of the Sub-Divisional Officer and no revision was maintainable against the order of the Deputy Collector with revenue appellate powers.

6. Another contention has been raised on behalf of the respondents Nos. 1 and 4 by Mr. Manohar as was raised before the tax Recovery Officer and the Sub-Divisional Officer that the petitioner was not entitled to be heard in view of the petitioner's omission to deposit the amount recoverable from him in execution of the certificate. The second provision to rule 61 requires that an application made by a defaulter under this rule shall be disallowed unless the applicant deposits the amount recoverable from him in execution of the certificate. According to him, this is a mandatory provision and the Tax Recovery Officer has no jurisdiction to set aside the same unless, in the first instance, he is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity and, in the second place, unless the applicant deposits the amount recoverable from him under the execution of the certificate. There is no dispute that the amount recoverable from the petitioner was not deposited by the petitioner along with the application for setting aside the sale before the Tax Recovery Officer, nor was the amount paid before the Sub-Divisional Officer. It appears that, as a condition of stay, the Commissioner had directed the petitioner to furnish security to the extent of Rs. 45,000. It is contended on behalf of the respondents Nos. 1 and 4 that this second proviso to rule 61 not having been complied with by the petitioner, the sale was not liable to be set aside. Since we have taken the view that the Sub-Divisional Officer's order in appeal refusing to set aside the sale had become final and the sale is not liable to be set aside, we do not think it necessary to go into this question whether the failure on the part of the petitioner to deposit the amount recoverable from him disentitles him the make an application for setting aside the sale or disentitles the Tax Recovery Officer to set aside the same.

7. We do not any reason, therefore, to interfere with the orders of the Commissioner either in appeal or in revision. Accordingly, this petition fails and is dismissed with costs.

8. Petition dismissed.


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