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Kundanlal Malhotra Vs. Income-tax Officer, B Ward, Satna, and Another. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Petition No. 269 of 1959
Reported in[1961]43ITR312(MP)
AppellantKundanlal Malhotra
Respondentincome-tax Officer, B Ward, Satna, and Another.
Excerpt:
- - now here the amount of income-tax is clearly recoverable by the income-tax officer, satna, which place is in satna district itself......applicants assessment file was transferred to the income-tax officer, who on february 27, 1959, issued a certificate under section 46(2) of the act to the collector, chhatarpur, for the recovery of rs. 38,980.69 np. according to the assessment order made by the income-tax officer, kanpur, in march, 1955.learned counsel appearing for the petitioner sought to challenge the validity of the recovery proceedings initiated on the certificate issued by the income-tax officer, satna, on various grounds. it was urged that the notice of demand issued to him in march, 1955, was invalid as it was issued before the making of the assessment itself; that the notice of demand was never served on him; that the notice which directed him to pay on or before march 28, 1955, the amount of income-tax due.....
Judgment:

This is an application under article 226 of the Constitution for the issue of a writ of certiorari for quashing a certificate issued under the Revenue Recovery Act, 1890, by the Income-tax Officer, B-Ward, Satna, to the Collector of Chhatarpur for the recovery of the income-tax amount said to be due from the petitioner. The applicant also prays that a writ of prohibition be also issued to the opponents restraining them from taking any proceedings for the recovery of Rs. 38,980.69 nP. on account of income-tax from the applicant.

The material facts, briefly stated, are that the applicant was a partner in a registered firm styled as 'Moona Lall & Sons' of Mall Road Kanpur. In the assessment of the firm for the assessment year 1950-51 the petitioners share of profits was computed at Rs. 88,878. This was on March 17, 1955. On the same date the petitioner filed a return of his income for the assessment year 1950-51. On the basis of that return he was assessed to tax in the sum of Rs. 39,429-15-0. A notice of demand was accordingly issued to him for the payment of this amount. There is some dispute as to the date on which the assessment was made on the petitioner and the date on which the notice of demand was issued to him. According to the applicant the notice of demand was issued on March 17, 1955, where the actual assessment was made on March 18, 1955, and consequently the notice of demand was invalid. The petitioner appealed against the assessment and obtained some relief from the Appellate Assistant Commissioner. The assessment was revised according to the decision of the Appellate Assistant Commissioner and the petitioner was asked by the Income-tax Officer, Kanpur, to pay Rs. 38,429-15-0 on or before March 6, 1956. As the amount was not paid by the applicant within the time fixed, a penalty was imposed by the Income-tax Officer. On December 24, 1956, the Income-tax Act to the Collector, Kanpur, for the recovery of a sum of Rs. 40,329-15-0. It appears that subsequently the applicants assessment file was transferred to the Income-tax Officer, who on February 27, 1959, issued a certificate under section 46(2) of the Act to the Collector, Chhatarpur, for the recovery of Rs. 38,980.69 nP. according to the assessment order made by the Income-tax Officer, Kanpur, in March, 1955.

Learned counsel appearing for the petitioner sought to challenge the validity of the recovery proceedings initiated on the certificate issued by the Income-tax Officer, Satna, on various grounds. It was urged that the notice of demand issued to him in March, 1955, was invalid as it was issued before the making of the assessment itself; that the notice of demand was never served on him; that the notice which directed him to pay on or before March 28, 1955, the amount of income-tax due was in any case not served on him before March 28, 1955, he could not be said to be a person in default and consequently no certificate under section 46(2) of the Income-tax Act could be issued. It was also said that the notice of demand was not in the prescribed form which was in force at the material time. The main contention of the learned counsel for the petitioner was, however, that in view of the provisions of section 5 of the Revenue Recovery Act, 1890, the Income-tax Officer, Satna, was not empowered to send a certificate for the recovery of the amount to the Collector of Chhatarpur and that under that provision the certificate could be sent only by the Collector of Satna as the tax amount sought to be recovered was one recoverable as an arrear of land revenue by a public officer other than a Collector.

In our judgment the last contention advanced on behalf of the petitioner must be given effect to. Section 5 of the Revenue Recovery Act runs as follows :

'Where any sum is recoverable as an arrear of land revenue by any public officer other than a Collector or by any local authority, the Collector of the district in which the officer of that officer or authority is situate shall, on the request of the officer or authority, proceed to recover the sum as if it were an arrear of land revenue which has accrued in his own district, and may send a certificate of the amount to be recovered to the Collector of another district under the foregoing provisions of this Act, as if the sum were payable to himself.'

It is clear from this provision that when any sum is recoverable by any public officer other than a Collector, then the Collector of the district in which the office of the public officer is situated alone can send a certificate of the amount to be recovered to the Collector of another district for the recovery of the amount under the Act. Now here the amount of income-tax is clearly recoverable by the Income-tax officer, Satna, which place is in Satna District itself. The Collector of Satna could therefore on the request of the Income-tax Officer, Satna, Proceed to recover the sum as an arrear of land revenue which has accrued in his own district and he alone could issue a certificate for the recovery of the amount to the Collector of another district. Chhatarpurand Satba are two separate districts. Therefore, the Income-tax Officer, Satna, had no jurisdiction to issue the certificate that he did issue to the Collector, Chhatarpur. The proceedings for recovery initiated in Chhatarpur district on the basis of this certificate issued by the Income-tax Officer, Satna, are therefore wholly without jurisdiction and must be quashed.

In this view of the matter it is unnecessary to consider the other contentions put forward on behalf of the petitioner. Indeed, it would not be proper to do so when they have a bearing on the validity of the recovery proceedings initiated on a certificate issued by the Income-tax Officer, Kanpur, under section 46(2) of the Income-tax Act and pending before the Collector of Kanpur over whom we have no jurisdiction under article 226.

For these reasons the certificate dated February 27, 1959, issued by the Income-tax Officer, Satna, is quashed and the recovery proceedings taken pursuant to that certificate are also quashed. In the circumstances of the case we make no order as to costs. The outstanding amount of the security deposit shall be refunded to the petitioner.

Petition allowed.


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