9911796707
TMI Blog1998 (11) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... he income-tax liability of the proprietor of Jai Steel Industry, Shri T. N. Malhotra, was assessed by the income-tax authorities at Rs. 89,48,174 for recovery of which Certificate No. 82 of 1994-95 and Certificates Nos. 4, 5, 6 and 7 of 1997-98 were instituted before the Tax Recovery Officer, Dhanbad. The Tax Recovery Officer after attachment of the properties in question belonging to jai Steel Industry issued sale proclamation on March 27, 1998, fixing April 14, 1998, as the date of sale. The petitioner-bank filed its claim/objection before the Tax Recovery Officer on April 9, 1998. According to the petitioner, a preliminary hearing-took place on May 1, 1998, when the Tax Recovery Officer solicited the opinion of Standing Counsel, Income-tax Department. No hearing on the claim/objection, according to the petitioner, took place thereafter. However, the petitioner's representative was informed on May 14, 1998, that the claim/objection had been rejected. From the copy of the order which was made available on May 15, 1998, it transpired that the claim/objection had been rejected on May 1, 1998, itself. From the order, copy whereof has been marked annexure-3 to the writ petition, it fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner to adduce evidence. Mr. Prasad in support of his contention placed reliance on R. K. Raghavan v. Union of India [1983] 140 ITR 894, 899 (Mad). Mr. Debi Prasad, appearing on behalf of the Income-tax Department, submitted that rule 86 of the Second Schedule provides for appeal against original orders passed by the Tax Recovery Officer which the petitioner could have preferred. Under rule 11(6) of the Second Schedule, further, it is open to the petitioner to institute a suit in the civil court and establish its right in the properties in dispute. In these premises, this court may not interfere with the impugned order. Mr. Debi Prasad, however, very fairly agreed that the claim/objection of the petitioner has not been considered on the merits and the matter, therefore, may be remitted for fresh consideration. The provision for the recovery of the income-tax from a defaulter-assessee is contained in section 222 of the Income-tax Act, which provides that when an assessee is in default or is deemed to be in default in making payment of tax, the Income-tax Officer may forward to the Tax Recovery Officer a certificate under his signature specifying the amount of arrears due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale. (5) Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer shall disallow the claim. (6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute ; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive." The above provisions, it would appear, are akin to the provisions of rules 58 to 63 of Order 21 of the Code of Civil Procedure, as they stood prior to the 1976 Amendment (Act 104 of 1976). In order to point out the similarity between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtgage or charge in favour of some person not in possession and thinks fit, to continue the attachment, it may do so, subject to such mortgage or charge. 63. Saving of suits to establish right to attached property.----Where a claim or an objection is preferred, the party against whom an order is made may institute a suit to establish the right which he claims to the property in dispute, but, subject to the result of such suit, if any, the order shall be conclusive." From a comparative reading of the above provisions it would appear that while rule 11 (1) and (2) of the Second Schedule to the Income-tax Act correspond to rule 58 of Order 21, Civil Procedure Code, rule 11(3) corresponds to rule 59, rule 11(4) corresponds to rule 60, rule 11(5) corresponds to rule 61, and rule 11(6) corresponds to rule 63 of Order 21 of the Civil Procedure Code. The provisions of rule 11 of the Second Schedule to the Income-tax Act, therefore, have to be interpreted in the same manner as the erstwhile provisions of rules 58 to 63 of Order 21, of the Code of Civil Procedure and there cannot be any doubt, therefore, that the impugned orders of the Tax Recovery Officer in the present case are not in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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