1972 (12) TMI 31 - HC - Income Tax

Scope of investigation by a Tax Recovery Officer - petitioner in each of these writ petitions is aggrieved by the summary disposal given by the respondent as the Tax Recovery Officer functioning under the provisions of the Income-tax Act - word investigation in r. 11(1) of the Second Schedule to the Income-tax Act, 1961 read in conjunction with the powers conferred upon the Tax Recovery Officer which reflect the powers of an ordinary Civil Court implies that there must be a full, fair and adequate enquiry - In a case like this, where rights of parties are to be adjudicated by a quasi-judicial tribunal, a cursory or perfunctory order of the nature scrutinised by me ought not to have been passed. In this view, I am of the opinion that there has not been a full adjudication as required under law by the respondent and, therefore, there is an error apparent in the orders passed by the respondent.

Summary

Issues:
1. Challenge to summary disposal by Tax Recovery Officer of attachment of properties under Income-tax Act.
2. Interpretation of relevant provisions under the Income-tax Act regarding Tax Recovery Officer's functions.
3. Application of principles of natural justice and judicial process in proceedings before Tax Recovery Officer.

Detailed Analysis:

Issue 1:
The petitioner challenged the summary disposal by the Tax Recovery Officer of the attachment of properties under the Income-tax Act, claiming that the attached property belonged to him, having purchased it bona fide from one of the sharers after a partition in the family. The respondent rejected the claim petitions without a detailed investigation, prompting the filing of writ petitions under Article 226 to challenge the order.

Issue 2:
The judgment highlighted the relevant provisions of the Income-tax Act, specifically Section 222, which empowers the Income-tax Officer to forward a certificate to the Tax Recovery Officer for recovery of arrears. The Tax Recovery Officer, acting as a statutory functionary, can choose modes of recovery, including attachment and sale of immovable property. Guidelines under the Second Schedule to the Act, such as rules 11, 82, 83, 86, and 87, outline the functions and powers of the Tax Recovery Officer, emphasizing the need for a judicial approach and adherence to principles of natural justice.

Issue 3:
The judgment emphasized the quasi-judicial nature of proceedings before the Tax Recovery Officer, requiring a full, fair, and adequate investigation into claims or objections raised by third parties regarding attached properties. Rule 11(1) mandates the Tax Recovery Officer to conduct a thorough investigation, akin to a civil court enquiry, with reasoned decisions reflecting a detailed consideration of all relevant factors. The failure of the Tax Recovery Officer to provide a speaking order, consider the contentions of the parties, and apply a comprehensive procedure led to the court allowing the writ petitions and directing a proper adjudication of the claim petitions in accordance with the law and principles of natural justice.