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Interpretation of sub-section (5A) of section 46 of the Income-tax Act. Analysis: The judgment involves the interpretation of sub-section (5A) of section 46 of the Income-tax Act. The case pertains to writ petitions filed by petitioners who received notices from the Income-tax Officer demanding payment of tax arrears owed by the assessee. The petitioners objected to the notices, asserting that no sum was due from them to the assessee. The central issue revolves around whether the petitioners are protected by the clause in sub-section (5A) which states that a person objecting to a notice on the grounds of no dues is not required to pay. The court analyzed the legislative intent behind the enactment of sub-section (5A) to facilitate tax recovery and prevent the assessee from withdrawing funds before payment. The court considered the Select Committee's role in suggesting the inclusion of the clause protecting individuals objecting to the notice. The argument presented by the appellant's counsel was that the petitioners fall under the category of persons protected by the clause in sub-section (5A) exempting them from payment if they object to the notice. The court agreed with this contention, emphasizing that the provision applies to cases where there is an admitted liability. The court rejected the Department's argument that mere objections should not shield individuals from coercive proceedings, stating that the provision is intended to apply only to acknowledged liabilities. The judgment highlighted that the Income-tax Officer cannot enforce further proceedings if the person to whom the notice is sent denies owing any money, even if the denial is later found to be false. Moreover, the court addressed the Department's argument regarding the timing of objections, ruling that there is no stipulated time frame within which objections must be raised. The judgment concluded that the petitioners' objections were valid, and therefore, the writ petitions were allowed. The court directed the Income-tax Officer to refrain from taking any action against the petitioners under the Act. The judgment also awarded costs to the petitioners in each case.
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