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Issues Involved
1. Withdrawal or cancellation of the recovery certificate by the Income-tax Officer and its impact on the Tax Recovery Officer's proceedings. 2. Whether the impugned recovery certificate dated April 12, 1954, was barred under section 46 of the Indian Income-tax Act, 1922, read with section 231 of the Income-tax Act, 1961. 3. Validity and jurisdiction of the recovery proceedings in the absence of a valid and enforceable recovery certificate. Detailed Analysis Issue 1: Withdrawal or Cancellation of the Recovery Certificate The core question was whether the Tax Recovery Officer could proceed with the recovery proceedings if the Income-tax Officer had withdrawn or cancelled the recovery certificate under section 224 of the Income-tax Act, 1961. The court held that once the Income-tax Officer withdraws or cancels a recovery certificate, the Tax Recovery Officer must stop the proceedings. The Tax Recovery Officer is a statutory creature and can only act on a valid and existing recovery certificate. In this case, the petitioner claimed that the recovery certificate was withdrawn, but the respondents, including the Income-tax Officer, firmly stated that the recovery certificate was never withdrawn or cancelled. The court found no material evidence to support the petitioner's claim and concluded that the recovery certificate was still valid and subsisting. Issue 2: Barred Under Section 46 of the Indian Income-tax Act, 1922 The petitioner contended that the recovery certificate dated April 12, 1954, was barred under section 46(7) of the Indian Income-tax Act, 1922, because the proceeding was not started within one year of making the relevant demand. The court noted that the petitioner failed to provide specific details to substantiate this claim. The respondents asserted that the demands were made on March 6, 1953, and March 9, 1953, and the recovery certificate was issued within the permissible period. Additionally, the petitioner was allowed to pay the arrears in monthly installments starting from October 1953, which extended the limitation period. The court found the respondents' assertions credible and held that the recovery proceedings were commenced within the prescribed period, thus rejecting the petitioner's contention. Issue 3: Validity and Jurisdiction of Recovery Proceedings The petitioner argued that the recovery proceedings were void, illegal, and without jurisdiction due to the absence of a valid and enforceable recovery certificate. The court reiterated that the recovery certificate was never withdrawn or cancelled and was valid. The petitioner had admitted the liability on several occasions and never questioned the validity of the recovery proceedings before any authority. The court found no basis to declare the proceedings void or without jurisdiction. Conclusion The court dismissed the petition, holding that the recovery certificate was valid and the proceedings were lawful. The petitioner's contentions regarding the withdrawal or cancellation of the recovery certificate and the limitation period were found to be without merit. The petition was dismissed with costs assessed at Rs. 300.
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