1987 (6) TMI 20 - HC - Income Tax

Summary

Issues:
1. Declaration of rent collection by Income-tax Department from petitioner's tenant.
2. Quashing of order attaching petitioner's immovable properties by Tax Recovery Officer.
3. Legality of prohibitory order preventing tenant from paying rent to petitioner.
4. Justification of attaching two properties for a smaller tax due amount.
5. Validity of arrest notice causing the petitions.

Analysis:

1. The petitioner sought a declaration that the Income-tax Department should be deemed to have collected rent from his tenant due to a prohibitory order. The Tax Recovery Officer prohibited the tenant from paying rent to the petitioner and requested remittance to the Department. The petitioner argued that the Department should be considered to have collected rent, but the Department contended that the tenant did not remit any rent to either party, and there was no legal compulsion for the tenant to pay the Department. The court found that the order was beyond the purview of the rule and the Tax Recovery Officer lacked the power to prevent a tenant from paying future rent to the landlord. Therefore, the relief claimed by the petitioner regarding rent collection failed, without prejudice to legal action against the tenant for non-payment.

2. The Tax Recovery Officer attached two properties of the petitioner for a smaller tax due amount. The petitioner argued that one attachment was sufficient based on the tax amount. The court noted that the rule applicable for attachment of immovable property did not restrict the value of the property attached to be equal to the tax due. The main objective was to make the defaulter pay the tax and release the property. The petitioner could have applied for raising the attachment on one property if deemed excessive. The court found no merit in the petitioner's contentions regarding the attachment of two properties.

3. The petitioner questioned the legality of the prohibitory order preventing the tenant from paying rent to him. The court held that the order exceeded the rule's scope and did not empower the Tax Recovery Officer to control future rent payments. The discretion given to the tenant under the rule allowed him not to remit rent to the Department. The petitioner should have challenged the order promptly or taken action against the tenant for non-payment. The court emphasized that there was no statutory provision for deeming the Department to have collected rent in this scenario.

4. The petitioner raised concerns about the arrest notice prompting the petitions. The Department clarified that it was not interested in executing the arrest notice. The court considered this statement and ultimately dismissed the writ petitions.

In conclusion, the High Court dismissed the petitions, ruling against the petitioner's claims regarding rent collection, property attachment, prohibitory order legality, and arrest notice validity.