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TMI Blog1965 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessments under section 34, the Hindu undivided family proceeded in appeal to the Appellate Assistant Commissioner and then to the Income-tax Appellate Tribunal, but its appeals were dismissed. A reference under section 66(1) of the Act was answered by this court against the Hindu undivided family, and now an appeal by special leave under article 136 of the Constitution is pending before the Supreme Court. Certain other questions of law have now been referred by the Appellate Tribunal to this court and the reference is pending. Four notices of demand were served upon the Hindu undivided family by the Income-tax Officer pursuant to the assessments made upon it, one dated February 21, 1945, in respect of the original assessment, the second dated March 23, 1949, in respect of the reassessment under section 34, which was subsequently set aside by the Appellate Tribunal, the third dated October 16, 1952, in respect of the first subsisting reassessment under section 34 dated October 16, 1952, and the fourth dated March 18, 1954, in respect of the further reassessment under section 34. Now although the assessment order dated March 23, 1949, had been set aside in appeal by the Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Income-tax Officer issued a certificate for the recovery, of that sum. Meanwhile, the Hindu undivided family proceeded in appeal, and the Appellate Assistant Commissioner reduced the assessed income by Rs. 38,402 on March 31, 1959 ; again no fresh notice of demand was issued by the Income-tax Officer. For the assessment year 1952-53 the Hindu undivided family was assessed upon a total income of Rs. 42,798 and to income-tax in the sum of Rs. 11,665-6-0, and on March 25, 1958, the Income-tax Officer issued a certificate for recovery of that sum. An appeal to the Appellate Assistant Commissioner resulted in the reduction of the assessed income by Rs. 8,141. No fresh notice of demand was issued by the Income-tax Officer. There were, therefore, recovery proceedings pending for the assessment years 1944-45 and 1948-49 to 1952-53. These related to assessments made upon the Hindu undivided family and consequent notices of demand against that family. Baladin Ram Kalwar was the karta of the family. The petition has been filed by Baladin Ram, the karta, in his individual status. That is apparent from paragraphs 1 to 3 and 44 to 47 of the petition. The recovery certificates were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer was bound to issue a fresh notice of demand whenever the assessed income was reduced by a superior authority and no recovery proceedings could be continued pursuant to the original notice of demand. Now it is clear that the recovering authority acquires his jurisdiction from the recovery certificate issued by the Income-tax Officer. The recovery certificate proceeds upon the assumption that there is a subsisting demand against the assessee which has not been satisfied. The demand is that made by the notice of demand consequent upon the assessment. When an assessment order is quashed in appeal, the notice of demand falls with it and consequently there is no subsisting demand against the assessee. It, therefore, becomes necessary for the Income-tax Officer to issue a fresh notice of demand giving effect to the tax liability now computed pursuant to the appellate order. This is the law laid down by the Supreme Court in Income-tax Officer v. Seghu Buchiah Setty. Consequently, as the law stood then, the recovery proceedings against the assessee could not have been continued. But, apparently because of the decision of the Supreme Court, Parliament enacted the Taxation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority and jurisdiction for taking recovery proceedings is derived. That power proceeds by virtue of the original notice of demand which continues to subsist throughout. The next contention is that no proceedings can be taken to arrest the petitioner for recovery of the tax dues of the Hindu undivided family, even though he be the karta of the family. There is force in this contention. Since the Income-tax Act, 1961, came into force, the recovery proceedings must be referred to section 222 of that Act by virtue of section 297(2)(j) thereof. The Income-tax Act of 1961 as well as the Income-tax Act of 1922 contemplate recovery proceedings against a defaulter. Section 45 of the Act of 1921 declares that an assessee failing to pay the tax demanded within the time mentioned in the notice of demand will be deemed to be in default, and an " assessee " is defined in section 2(2) as " a person by whom tax is payable ". Corresponding definitions are to be found in the Act of 1961. The assessee in the instant case is the Hindu undivided family, and if default is committed in the payment of the tax due, it is a default committed by the Hindu undivided family. It cannot be said that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that the aggregate of the tax liability covered by the two recovery certificates is merely Rs. 15,228.45. I am unable to accept this contention. The mere omission to refer to the remaining notices of demand cannot vitiate the sale proclamation. It is not stated that the total amount of the tax liability in arrears is not Rs. 1,19,892.55. In any event, the error is one which can easily be corrected by the appropriate authority. It is not a ground upon which the recovery proceedings can be held to be vitiated by an error of jurisdiction or manifest illegality. It has been urged on behalf of the respondents that the grounds raised by the petitioner in the instant petition can be raised by him in proceedings under the Second Schedule of the Act of 1961, and, therefore, this court should leave him to his remedy under those provisions. It seems to me that the case is one where the infirmity of jurisdiction is plain upon the face of the proceeding, and calls for interference by this court under article 226 of the Constitution. Inasmuch as the impugned recovery proceedings relate to a number of assessment years, the petitioner has filed the instant petition (Civil Misc. Writ No. 97 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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