1970 (3) TMI 7 - HC - Income Tax

Summary

Issues: Jurisdiction of Tax Recovery Officer under Public Demands Recovery Act and Income-tax Act, 1961

In this case, the main issue revolves around the jurisdiction of the Tax Recovery Officer under the Public Demands Recovery Act and the Income-tax Act, 1961. The opposing party had been making payments towards income tax dues under the Indian Income-tax Act, 1922, as authorized by law. However, after the proceedings were taken over by the Tax Recovery Officer under the Income-tax Act, 1961, a further demand for payment, including interest and costs, was made under section 16(a) of the Public Demands Recovery Act. The opposing party objected to this demand, arguing that the Tax Recovery Officer had no jurisdiction to make such a demand under the Public Demands Recovery Act. The Tax Recovery Officer, however, relied on section 297(2)(j) of the Income-tax Act, 1961, to justify the demand.

The court analyzed the provisions of section 297(2)(j) of the Income-tax Act, 1961, which saves recovery of sums payable under the repealed Act and actions already taken for such recovery. The court noted that the saving provision did not extend to disputed interest amounts. The court also highlighted that the Tax Recovery Officer, being governed by the Income-tax Act, 1961, did not have the power to levy or recover interest under the Public Demands Recovery Act. It was acknowledged that the demand for interest and costs could only be supported under section 16(a) of the Public Demands Recovery Act, which was not within the jurisdiction of the Tax Recovery Officer under the Income-tax Act, 1961.

The court further discussed the possibility of the Tax Recovery Officer also acting as the certificate officer, who would have the power to make recoveries under the Public Demands Recovery Act. However, it was unclear from the record whether the Tax Recovery Officer in this case was also the certificate officer. The court emphasized that the recovery proceedings, once taken over by the Tax Recovery Officer, were conducted under the Income-tax Act, 1961, and not the Public Demands Recovery Act. Therefore, the provisions of the Public Demands Recovery Act, including section 16(a), would not be applicable in this scenario.

In conclusion, the court upheld the decision of the Commissioner, ruling in favor of the opposing party's objection to the recovery of disputed amounts by the Tax Recovery Officer. The court clarified that the order did not prejudice the Union's rights to pursue recovery through appropriate legal proceedings. No costs were awarded in this matter.