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Issues: Recovery proceedings for tax dues without proper notice of demand and service, Legal representation in assessment proceedings, Necessity of individual notices to partners of unregistered firm or association of persons, Authority of the ITO who forwarded the certificates, Compliance with the period of limitation under the Income Tax Act, 1961, Direction for suspension of certificate proceedings for a specified period.
Analysis: The judgment concerns a challenge to recovery proceedings initiated for tax dues by the petitioner, who is one of the legal representatives of a deceased individual. The petitioner argued that the recovery proceedings lacked a proper demand notice, which is a prerequisite for initiating such actions. The court acknowledged the necessity of serving a notice of demand before proceeding with recovery efforts. It was established that the notice of demand had been duly served for various assessment years, as evidenced by the original demand notices produced before the court. Regarding legal representation in assessment proceedings, the petitioner contended that notice of assessment or reassessment should be served on all legal representatives. However, the court clarified that since the petitioner was a member of the association of persons being assessed, the failure to serve notice on all legal representatives did not invalidate the proceedings. The judgment referenced a case law where it was held that individual notices to partners of an unregistered firm or members of an association of persons were unnecessary if notices of demand were issued to the firm or association. This principle was deemed applicable to the present case, supporting the validity of the recovery proceedings. The petitioner also raised concerns about the authority of the Income Tax Officer (ITO) who forwarded the certificates for recovery. The court clarified that the ITO responsible for assessing the association of persons was competent to forward the certificates, even if a different ITO had made the impugned assessment. In addressing the period of limitation under the Income Tax Act, 1961, the court found that the recovery proceedings were initiated within the prescribed time frame for most of the assessment years in question. Therefore, the challenge to the certificate proceedings on the basis of exceeding the limitation period was dismissed. Lastly, the court provided a specific direction to suspend the certificate proceedings related to a particular property for four months to allow the petitioner an opportunity to respond to queries raised by the ITO. This direction aimed to ensure procedural fairness while preserving the petitioner's rights to challenge the proceedings before the Tax Recovery Officer. In conclusion, the court disposed of the rule with the specified direction, emphasizing that the order did not prejudice the petitioner's rights to raise objections through appropriate legal channels.
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