1978 (9) TMI 31 - HC - Income Tax

Summary

Issues:
- Dispute over properties left by deceased father
- Validity of tax dues on plaintiffs
- Legality of attachment of plaintiffs' properties
- Bar on institution of suit by IT Act and Public Demands Recovery Act
- Prematurity of the present suit

Analysis:
- The appeal involved a dispute between the plaintiffs, sons of a deceased individual, and their step-mother over the properties left by their father. The plaintiffs sought declarations that they were not personally liable for their father's tax dues and that the attachment of their properties was illegal and void.
- Section 159 of the Income Tax Act, 1961, establishes the liability of legal representatives to pay tax dues of the deceased. The court noted that the law clearly defined the liability of legal representatives, making a separate declaration unnecessary. The first relief sought by the plaintiffs was deemed redundant as it was already covered by statutory provisions.
- Regarding the second relief sought, the court found that the plaintiffs failed to provide a list of properties claimed to be attached illegally. The sole witness, one of the plaintiffs, was deemed unreliable as he made contradictory statements and did not specify the properties in question. Without concrete evidence, the court could not grant the declaration regarding the attachment of properties.
- The court further analyzed the provisions of rule 9 of Schedule II of the IT Act, 1961, and section 37 of the Public Demands Recovery Act, 1913, which bar civil suits in certain matters related to tax recovery. The court held that the present suit was not maintainable due to these legal provisions, as no fraud was alleged, and the suit was premature.
- Rule 11 of Schedule II to the IT Act was also considered, indicating that the suit was premature as it raised issues that should have been addressed before the Tax Recovery Officer. The court emphasized that the suit could only be brought after the TRO's investigation and order, which had not occurred in this case.
- The court dismissed the appeal, as all contentions failed, and made no order as to costs. The decision highlighted the importance of adhering to procedural requirements and legal provisions in matters of tax recovery and property attachment.