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TMI Blog2001 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... s not taken into consideration these observations which are binding on every court and every judicial and quasi-judicial authority, He submitted that on account of this omission on the important aspect the judgment which has been pronounced by the learned single judge will have to be treated as incorrect and illegal. He submitted that it be set aside by passing appropriate judgment and order. Shri Patankar vehemently opposed the submissions of Shri Bagadia and submitted that the learned single judge has considered the observations of the Supreme Court in Beharilal's case [1981] 131 ITR 129 and has come to a right conclusion after adverting its attention to necessary facets of the case. He submitted that sufficient opportunity was given t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 967, had been arrived at without giving such notice or holding such an inquiry, the decision was invalid and the notices dated December 31, 1966, and January 11, 1967, had to be quashed." The Supreme Court in that matter held that: "Under clause (vi) of section 226(3), the discovery by the Income-tax Officer that the statement on oath made on behalf of the garnishee is false in any material particular has the consequence of imposing a personal liability for payment on the garnishee and it must, therefore, be a quasi-judicial decision preceded by a quasi-judicial inquiry involving observance of the principles of natural justice. The Income-tax Officer cannot subjectively reach the conclusion that in his opinion the statement on oath made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the attention of the learned single judge was invited to these observations of the Supreme Court. However, by bearing the submissions advanced on behalf of the Revenue, the learned judge concluded that: "if one examines the proceedings initiated by the Revenue, against the petitioner under section 226(3), which eventually culminated in the impugned order dated March 10, 1999, it is clearly discernible that the Revenue discharged its factual burden by holding that an affidavit filed by the petitioner is false or/and not true. All that is required to be proved by the Tax Recovery Officer under section 226(3)(vi) is that the statement made on oath by the person to whom the notice is served under section 226(3) is false in any material pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the petitioner has to pay a sum of Rs.27,30,168.20 to respondent No. 6. Accordingly, by passing a very reasoned order meeting and taking into account every possible factual aspect, several entries in the books of account, the nature of transaction, the advance amount paid by respondent No. 6 to the petitioner, held the statement to be false and the amount, mentioned in the order to be payable." But after perusing the record it will have to be pointed out that no show-cause notice was issued to the appellant pointing out the particular portion of the affidavit which according to the Tax Recovery Officer was false and inviting his attention to it and to afford him sufficient opportunity of explaining it. Not only that, it was the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e observations of the Supreme Court in Beharilal's case [1981] 131 ITR 129 and, therefore, he landed in error of dismissing that writ petition. In the fitness of the things and as it was indicated by the Supreme Court in Beharilal's case [1981] 131 ITR 129 it is necessary now that the matter should be remanded back to the Revenue/appropriate authority for the purpose of conducting an inquiry in view of the directions given by the Supreme Court in Beharilal's case [1981] 131 ITR 129 as to how the matter is to be dealt with in view of the provisions of section 226(3) of the Income-tax Act. For avoiding the delay and for avoiding the prejudice to the Revenue, this matter has been decided finally. The matter stands remanded back to the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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