1982 (9) TMI 16 - HC - Income Tax

Issues Involved:
1. Validity of the recovery proceedings initiated against the petitioner.
2. The legitimacy of the recovery certificates issued in 1947 and 1951.
3. The applicability of the limitation period under Section 46(7) of the Indian Income-tax Act, 1922.
4. The petitioner's challenge to the attachment and auction sale of the property.
5. The conduct of the petitioner and its impact on the relief sought.

Issue-Wise Detailed Analysis:

1. Validity of the Recovery Proceedings:
The petitioner challenged the recovery proceedings initiated for income-tax dues for the assessment years 1943-44 and 1944-45. The court noted that the petitioner had earlier filed objections and suits, which were dismissed. The court held that the recovery proceedings were legally perfect and valid, starting with the issue of the certificate dated March 27, 1947, and continued with the amended certificate dated August 11, 1951. The court found that the petitioner had delayed in raising objections and had engaged in conduct aimed at defeating the recovery process.

2. Legitimacy of the Recovery Certificates:
The first recovery certificate dated March 27, 1947, was issued by the III Addl. I.T.-cum-E.P.T. Officer, Cawnpore, to the Collector, Faizabad, for Rs. 2,55,366-14 annas. The petitioner argued that it was invalid as it was issued to an individual and not the HUF. The court disagreed, stating it was a case of "mis-step" and not "no-step." The second certificate dated August 11, 1951, issued by the ITO, B-Ward, Gorakhpur, to the Collector, Deoria, for Rs. 2,35,447-7 annas, was found to be in continuation of the first certificate. The court held that the certificates were valid and did not suffer from any legal infirmity.

3. Applicability of the Limitation Period:
The petitioner contended that the second certificate was barred by time under Section 46(7) of the 1922 Act. The court examined whether the first certificate saved the limitation period. It held that the proceedings for recovery commenced with the first certificate and that "some action" had been taken within the prescribed period, thus saving the limitation. The court found that the second certificate was not barred by time.

4. Challenge to Attachment and Auction Sale:
The petitioner objected to the attachment and auction sale of the property. The court noted that the petitioner had sold his share in the property before the attachment, and the sale was found to be collusive and aimed at defeating the recovery. The court upheld the attachment and auction sale, noting that the petitioner's objections were raised belatedly and lacked merit.

5. Conduct of the Petitioner:
The court emphasized the petitioner's conduct, including the collusive sale of property and delayed objections, which disentitled him to any relief. The court cited precedents where delays and conduct aimed at defeating legal processes led to the dismissal of petitions. The court concluded that the petitioner's conduct and the inordinate delay in challenging the recovery proceedings warranted the dismissal of the petition.

Conclusion:
The petition was dismissed with costs, and the stay order was discharged. The court found the recovery proceedings and certificates valid, the limitation period saved, and the petitioner's conduct disentitling him to relief.

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