1972 (11) TMI 12 - HC - Income Tax

Petitioner s late husband, one T. M. Abdul Rahim, was in arrears of income-tax, interest thereon and penalty aggregating to Rs. 4,37,868.29. For recovering the said amount, recovery proceedings were initiated by the income-tax department. A certificate was issued by the Income-tax Officer to the Tax Recovery Officer under section 222 - When the defaulter dies, whether attachment and sale without demand notice on legal representative is valid

Summary

Issues:
Recovery proceedings initiated against deceased defaulter without proper notice to legal representatives.

Analysis:
The judgment delivered by the High Court of Madras involved a case where the petitioner's late husband, a defaulter, had outstanding income-tax, interest, and penalty amounting to Rs. 4,37,868.29. Recovery proceedings were initiated by the income-tax department, and a notice of demand was issued to the defaulter after his death. Despite the defaulter's demise, the Tax Recovery Officer proceeded with attachment and sale proceedings without serving notices on the legal representatives of the deceased defaulter. The petitioner contended that all notices were invalid as they were addressed to the deceased defaulter and not his legal representatives, who had inherited the properties. In response, the counter-affidavit claimed that notices were issued to the legal representatives before the attachment, but evidence showed otherwise.

The main issue before the court was the validity of the notices of attachment and sale proclamation issued in the name of the deceased defaulter without involving his legal representatives. The court cited the rule that if a revenue sale occurs after the defaulter's death without serving notices to any living person as the defaulter, the sale is considered null and void. The court highlighted that the Tax Recovery Officer was aware of the defaulter's death even before the original notice of demand was returned, indicating a failure to follow the proper procedure of serving notices to legal representatives. The court emphasized that proceedings should have been initiated against the legal representatives as per rule 85 of the Second Schedule, which was only done in February 1969, rendering the earlier attachment and sale proclamation invalid.

The court concluded that the notices of attachment and sale proclamation issued in December 1968 were not valid due to the failure to involve the legal representatives of the deceased defaulter. It was emphasized that recovery proceedings should have been initiated against the legal representatives after the defaulter's death. The court allowed the writ petition on this basis but permitted the Tax Recovery Officer to continue the recovery proceedings by issuing fresh notices to the legal representatives as they had already been served with notices of demand in February 1969. Additionally, the court clarified that in any future recovery proceedings against legal representatives, notices must be addressed to them individually or as representatives of the deceased defaulter. No costs were awarded in the petition.