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K. Natarajan Vs. Tax Recovery Officer - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberWrit Petition No. 1003 of 1990 and W.M.P. No. 1523 of 1990
Judge
Reported in[2000]243ITR660(Mad)
ActsIncome Tax Act, 1961 - Schedule - Rule 11 and 11(6)
AppellantK. Natarajan
RespondentTax Recovery Officer
Appellant AdvocateKala Ramesh, Adv.
Respondent AdvocateChitra Venkataraman, Adv.
Excerpt:
.....property given in this settling notice. as a sequel to the order in the last paragraph, the tax recovery officer interestingly observes that if the petitioner has any further evidence and proof in support of his claim, he could file the same by january 11, 1990. the petitioner again raised an objection by a further reply dated january 11, 1990 and there also the petitioner complained regarding the description of the property. he raised the objection that if it was clearly mentioned during 1985, he would have raised his objection alongwith his co-owner. 9. in this backdrop, it would be interesting' to see the objections raised by the petitioner to the said proclamation. ' 11. it would clearly mean that even the petitioner had a clear idea as to which property was attached and,..........my property for the arrears of my father'. it seems that taking note of this objection, the tax recovery officer sent a certain questionnaire requiring the petitioner and probably his brother also to prove their title. the tax recovery officer to begin with has stated that in spite of the several notices, no steps were taken by the father of the petitioner or by the petitioner as legal heir to pay the tax arrears and, therefore, it was ultimately decided to sell the said property in public auction. it was also pointed out that though a letter was given to the father of the petitioner on october 6, 1989, calling for certain details about the ownership of the property, nothing was heard from him, meaning probably that the father had not objected that the property did not belong to him......
Judgment:

V.S. Sirpurkar, J.

1. This petition is by the legal representative of one Marimuthu Reddiaf, who was the original assessee and a defaulter. Marimuthu Reddiar has three sons. They are (1) Natarajan, (2) Arunachalam, and (3) Shanmugam. There were arrears of income-tax against the said Marimuthu Reddiar and, therefore, the Department proceeded for recovery of the arrears by resorting to the sale of the immovable property of the defaulter and issued an order of attachment on January 8, 1985. This attachment order was against Marimuthu Reddiar alone. The property which is described as attached is as follows :

'dwelling house at Thalatheru, Karaikal.'

2. Nothing happened thereafter till August 19, 1989, when for the first time the Department sent a notice for settling the sale proclamation to the defaulter, Marimuthu Reddiar. On the basis of this notice, however, the present petitioner Natarajan and probably his brother also, viz., Arunachalam, woke up and sent a communication dated October 4, 1989. Before we advert to the objections raised, it would be better to see the description of the property given in this settling notice. The properties were described as follows :

(1) Dwelling house at Thalatheru, Karaikal.

(2) No. 58, East Street, Thalatheru, Karaikal.

3. The objection raised by the petitioner, Natarajan, suggests that his house property No. 58, Thalatheru, Karaikal, was attached and was being put to sale for recovering the tax arrears of his father, A. Marimuthu Reddiar. He further says that the said property was owned by him from December 18, 1974, and that he was enjoying' possession of the above property along with his brother, Arunachalam. He then points out that his father had incurred a heavy loss in his business and was quite aged and was being supported by him (petitioner). The last sentence is significant. It is as under : 'Under the circumstances, I request you not to proceed against my property for the arrears of my father'. It seems that taking note of this objection, the Tax Recovery Officer sent a certain questionnaire requiring the petitioner and probably his brother also to prove their title. The Tax Recovery Officer to begin with has stated that in spite of the several notices, no steps were taken by the father of the petitioner or by the petitioner as legal heir to pay the tax arrears and, therefore, it was ultimately decided to sell the said property in public auction. It was also pointed out that though a letter was given to the father of the petitioner on October 6, 1989, calling for certain details about the ownership of the property, nothing was heard from him, meaning probably that the father had not objected that the property did not belong to him. In paragraph 2 of the letter dated November 9, 1989, it is suggested by the Tax Recovery Officer that there was no proof furnished regarding the ownership of the petitioner and also the certificates for payment of property tax were inadequate proof. In this paragraph, certain additional information regarding the title deeds, etc., was sought from the petitioner's brother, Arunachalam, and he was directed to put these details before the Tax Recovery Officer before November 27, 1989. It seems that the petitioner's brother acted immediately and sent a letter on November 20, 1989, suggesting that he required time to collect the proofs. A proclamation of sale came to be issued on December 8, 1989, in respect of the property of Marimuthu Reddiar. The property described was as follows :

Madras terraced residential house property with land appurtenant to it at 58, East Street, Thalatheru, Karaikal, Pondicherry State.

4. It seems that an advocate's notice was served on the Tax Recovery Officer on December 18, 1989, claiming again that the property belonged to the petitioner, Natarajan, and his brother, Arunachalam and that Marimuthu Reddiar had nothing to do with the property. Very significantly even in this notice, there is no objection raised as to the identification of the property. Even the earlier two communications by the petitioner had not referred to the identification of the property, but referred to the fact of ownership alone. It seems that the Tax Recovery Officer then passed a proper order under Rule 11 on December 29, 1989, refuting the objection of the petitioner. In this order, he has observed that the defaulter had fileda petition on February 21, 1985, requesting to lift the attachment before the Commissioner of Income-tax (Recovery) and that petition was rejected vide order dated March 4, 1985, by the Commissioner of Income-tax in C. No. 2(327)/CIT(R.) of 1984-85. He then refers to the objection raised by the petitioner and his brother, Arunachalam, and holds that the statement made by Arunachalam in his letter dated December 12, 1989, was not correct. He also dealt with the other documents filed on behalf of the petitioner and his brother, Arunachalam, and proceeded to mention in his order in paragraph 9 that the defaulter had admitted the said house property in question as his own, in his income-tax returns filed before the Income-tax Officer, Nagapattinam. He further records the finding in paragraph 10 that Mr. M. Arunachalam and Mr. M. Natarajan have not filed all the relevant details which have been called for in this office letter cited under reference No. 1 and ultimately he has written a finding in paragraph 11 that the petitioner and his brother, Arunachalam have not proved their absolute ownership over the said property beyond doubt. As a sequel to the order in the last paragraph, the Tax Recovery Officer interestingly observes that if the petitioner has any further evidence and proof in support of his claim, he could file the same by January 11, 1990. The petitioner again raised an objection by a further reply dated January 11, 1990 and there also the petitioner complained regarding the description of the property. He again claimed by way of a registered partition deed in 1974 that he was allotted the house property No. 58, East Street, Thalatheru, as per Schedule 'B' along with his brother, Arunachalam, and, therefore, the auction regarding this property could not be said to be a legal auction. Thereafter, the petitioner raised an objection that the letter sent by the Tax Recovery Officer mentioned only the dwelling house at Thalatheru and not his house. He raised the objection that if it was clearly mentioned during 1985, he would have raised his objection alongwith his co-owner. The matter stopped at that and finally the Tax Recovery Officer passed an order on January 17, 1990, under Rule 11 of the Second Schedule to the Income-tax Act. Thereafter this petition was filed on January 20, 1990.

5. More interestingly, however, the petitioner did not challenge the orders under Rule 11, passed in two years dated December 29, 1989, and January 17, 1990. In fact, the order dated January 17, 1990, is nothing but a reiteration of the earlier order dated December 29, 1989. There is not even a word of challenge to these orders and indeed it could not have been, for the simple reason, that an order passed under Rule 11, where a claim or an objection is rejected is assailable only under Sub-rule (6) of that rule, which provides for filing a suit in the civil court to establish the right. Learned counsel was fair enough to admit that no such suit was ever filed even till today.

6. Learned counsel invited my attention to the two grounds on which the sale proclamation dated December 8, 1989, has been challenged. I have already pointed out that the final order under Rule 11 has not been challenged, but what is challenged in the petition is only the sale proclamation dated December 8, 1989. The two grounds mentioned in the petition, particularly at paragraph 13 are as follows :

(a) It does not relate to a property that has been attached but relates to a property that has not been attached.

(b) It relates to a property which does not belong to the defaulter.

7. Learned counsel relies on both these grounds in support of the petitioner.

8. Learned counsel for the Department points out at the outset that this writ petition would not be maintainable particularly in view of the fact that the modalities provided by Rule 11(6) are not followed inasmuch as no suit asserting the title has been filed by the petitioner, who claims rival title in the property as against the original defaulter/assessee, Marimuthu Reddiar.

9. In this backdrop, it would be interesting' to see the objections raised by the petitioner to the said proclamation. In the first place, it will have to be said that since the petitioner has not challenged the orders under Rule 11, it would not be possible for the petitioner to contend that the property which is being sold by the Department belongs to them and not to their father, Marimuthu Reddiar. A serious effort was made by the petitioner by filing the copy of the registered partition deed dated December 18, 1974. It was seriously suggested that the property was in fact partitioned in favour of Arunachalam and Natarajan, the present petitioner and as such the holder exercising sale of this property to recover the arrears of Marimuthu Reddiar, the father of these two persons, should not be supported in law. I am afraid that this contention cannot be allowed to be raised for the simple reason that the petitioner has not chosen to establish his ownership in the property in the proper forum, that is, before the civil court as provided in Rule 11(6). Therefore, the petitioner cannot be allowed to suggest before the court that the property in fact belonged to the petitioner and not to Marimuthu Reddiar.

10. Learned counsel then chooses to go to the other aspect of the sale proclamation and challenges it on the technical ground that in fact the property which was attached is not being put to sale. I have already described the property as described in the attachment order as also as described in the proclamation, settlement notice and the final proclamation. I am afraid the challenge to the proclamation cannot be made at the instance of the present petitioner because the attachment order was passed not against the petitioner, but against Marimuthu Reddiar. So also the settlement notice was given not to the petitioner but to the said Marimuthu Reddiar. Again the final order of proclamation has been passed not against the petitioner, but against Marimuthu Reddiar. The proper person to challenge all these would be Marimuthu Reddiar himself. He, not having chosen to file this petition and having chosen his two sons to do that, cannot challenge on the technical ground that the property covered by the attachment is not the property which was being proclaimed. Again even on the merits that claim is difficult to be accepted for the simple reason that in his very first objection the petitioner has understood as to which property was being covered by the attachment order. In the first objection raised by the petitioner, it will be seen that the petitioner opens his objection by saying that the tax authorities had attached the house property and mentioned as follows:

'We come to know that you have attached my house properly No. 58, Thalatheru, Karaikal.'

11. It would clearly mean that even the petitioner had a clear idea as to which property was attached and, therefore, even on this ground the petitioner's challenge cannot be entertained. Last but not the least, at no point of time the petitioner has raised any objection regarding the identification of the property and his objections have been in respect of the ownership alone. Since the petitioner has not raised the question of identification of property earlier, now he would not be allowed for the first time to raise that question. This would be apart from the fact that he has no locus standi to raise the same.

12. In short, the petition has no merit and must be dismissed and, accordingly, it is dismissed. No costs. Consequently, W. M. P. No. 1523 of 1990 is also dismissed.


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