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TMI Blog1971 (5) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1966, the Income-tax Officer issued a notice under section 226(3)(i) of the Income-tax Act, 1961, to the petitioner stating that a sum of Rs. 22,89,281.97 was due from B. R. Sons Ltd. on account of income-tax and allied dues and that the petitioner should forthwith pay to the Income-tax Officer any amount due to or held for B.R. Sons Ltd. up to the aforesaid amount. The petitioner was warned that if it failed to make payment it would be deemed to be an a a in default and proceedings would be taken against it for realisation of the amount at if it were in arrears of tax. On July 1, 1966, the petitioner replied that according to its account books there was no credit balance in favour of B.R. Sons Ltd. and that, on the contrary, B.R. Sons Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 24, 1966, and was warned that if before January 10, 1967, the petitioner did not pay that amount it would be treated as an assessee in default under section 226(3)(x) and recovery proceedings would be taken accordingly. In its reply of January 10, 1967, the petitioner reiterated its stand and relied on the affidavit. It further maintained that the cash books in English were the only authorised and regular books of the firm and there was no other rokar bahi of the firm. Thereafter, the Income-tax Officer, by his letter dated January 11, 1967, informed the petitioner that it was an assessee in default within the meaning of section 226(3)(x) and recovery proceedings for realising the tax were now being taken. A copy of this letter was forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat ordinarily enjoyed by the Income-tax Officer in the matter of recovering arrears, of tax. It is a jurisdiction directed against a person who is not the assessee, but who has been selected by the statute because money is due or may become due from him to the assessee or he holds money or may subsequently hold money for or on account of the assessee. The jurisdiction extends not merely to requiring such person to pay the amount of the arrears to the Income-tax Officer, but further to treating him as an assessee in default where he does not pay. It is a serious" matter for a person to be exposed to such a proceeding, where the only reason is that he is or may become a debtor of the assessee or holds or may hold money for or on account of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticed that section 226(3)(vi) speaks of " the sum demanded ", that is to say, the specific sum which is due or may fall due from the person to the assessee. That is also what is intended upon the plain terms of section 226(3)(i). But we are not prepared to go so far as to hold that in every case a notice which does not specify the sum due from such person to the assessee is invalid. If it appears that the person against whom the proceeding is initiated comprehends fully what money is referred to by the demand the in the notice cannot prejudice him and it cannot be said that the proceeding is invalid. In the present case, the petitioner raised no objection before the Income-tax Officer in that regard. It clearly understood the notice to, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is verified " to my knowledge and based on the account books of the firm ". There is nothing to show which part of the averment is true to his personal knowledge and which on the basis of the account books. But there is the final contention of the petitioner. The contention is that, assuming that the petitioner can be treated as an assessee in default under section 226(3)(x), the Tax Recovery Officer has no power to take the recovery proceedings against the petitioner in the absence of a recovery certificate issued by the Income-tax Officer. It seems to us that the issue of the recovery certificate is a mandatory requirement before the Tax Recovery Officer can assume power to take recovery proceedings. Section 226(3)(x) provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(x) speaks of the manner provided in sections 222 to 225, it necessarily requires the issue of a recovery certificate by the Income-tax Officer to the Tax Recovery Officer. We are satisfied that no recovery certificate was issued by the Income-tax Officer so far as the petitioner is concerned. In paragraph 13 of the counter affidavit, of M.S. Prasad, Income-tax Officer, B-Ward, Special Circle, Kanpur, it is stated that no recovery certificate was required to be sent to the Tax Recovery Officer. Reliance was placed upon the notice dated January 11, 1967, issued by the Income-tax Officer and it is stated that that notice was sufficient to arm the Tax Recovery Officer with power to take recovery proceedings. Upon a perusal of that notice, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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