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TMI Blog1960 (1) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the sum of Rs. 72,819-9-0 was due from the assessee to the Department and a demand was made that the petitioners, who owed money to the assessee, should pay the Officer the amount due from them or held by them for or on account of the assessee, up to the amount of arrears stated. A similar notice was served on the petitioner in W.P. No. 980 of 1958 also at about the same time. The petitioners in W.P. No. 981 of 1958 assert that soon after receiving the notice, they sent the Officer a written objection to it on the ground that no sum was due from them to, or held by them on account of, the assessee, but for the purposes of these petitions, I am assuming that that fact has not been established. It is not denied, however, by the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Any person making any payment in compliance with a notice under this sub-section shall be deemed to have made the payment under the authority of the assessee and the receipt of the Income-tax Officer shall constitute a good and sufficient discharge of the liability of such person to the assessee to the extent of the amount referred to in the receipt. Any person discharging any liability to the assessee after receipt of the notice referred to in this sub-section shall be personally liable to the Income-tax Officer to the extent of the liability discharged or to the extent of the liability of the assessee for tax and penalties, whichever is less. If the person to whom a notice under this sub-section is sent fails to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to ensure that recovery proceedings are not rendered infructuous by the assessee. Under the law as it now stands, the Income-tax Officer must seek the aid of the Collector to recover tax in arrears except in cases falling under sub-sections (3) and (4) of section 46. Even under these two subsections, the procedure is not always simple. Other systems of law permit the taxing authority to serve a notice upon persons who may hold or who may be expected to come into possession of monies belonging to the assessee, c.f., section 72 of the Canadian Income War Tax Act of 1917 (Revised Statutes of Canada, Volume II, page 2160 and 1 section 218 of the Australian Income Assessment Act, 1936). On receipt of such notice, the person holding the money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y it and may well be exposed to the penal provision which enables the Income-tax Officer to take further proceedings before the Collector on the footing that the notice issued has the same effect as an attachment by the Collector in exercise of his powers under the proviso to sub-section (2) of this section. If, for instance, aftter taking the notice, a person makes a payment to the assessee, and that can only be on the footing that he owed money to the assessee, then, to the extent of the sum so paid (up to the amount due from the assessee), the person would become liable personally to the Department and the penal provisions of the Act can be invoked and enforced against him for its recovery. Where, however, the person to whom the notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tension. That sub-section is as follows: "If any assessee is in receipt of any income chargeable under the head 'Salaries' the Income-tax Officer may require any person paying the same to deduct from any payment subsequent to the date of such requisition any arrears due from such assessee, and such person shall comply with any such requisition, and shall pay the sum so deducted to the credit of the Central Government, or as the Central Board of Revenue directs." The power of the Income-tax Officer to require any person paying a salary due to the assessee is, under the terms of this sub-section, dependent upon the fact that the assessee is in receipt of any income chargeable under the head 'Salaries'. The Officer is not empowered to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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