9911796707
TMI Blog1996 (8) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ny are pending under the Act ; nor is any amount due from the petitioner to the Department of Income-tax. The petitioner-company, on receiving information from its banker regarding notice, annexure " P-1 ", immediately represented to respondent No. 2 and submitted a letter dated March 27, 1995, annexure " P-2 ". In this letter, the petitioner-company clearly stated that no proceedings are pending against them nor any sum under the Act is due against them and that the notice, annexure-" P-1 ", being illegal, be withdrawn. However, during the course of discussion, the petitioner-company was informed by respondent No. 2 that a sum of Rs. 16 lakhs is due from S. K. Gupta, c/o. Standard Carriers, SCO 43, Sector 7, Chandigarh, on account of arrears of income-tax and a company known as Transholding Private Limited, SCO 457-58, Sector 35-C, Chandigarh, owes some money to the said S. K. Gupta of Standard Carriers. Since, Transholding Private Limited had failed to deposit the said amount in pursuance of notice under section 226(3) of the Act issued to the said company, the impugned notice, annexure " P-1 ", has been issued to the petitioner-company on the ground that it is a sister concern o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in default. Only a sum of Rs. 92,982 is due from it to Transholding Private Limited to whom a notice under section 226(3) of the Act was issued. No notice under section 226(3) of the Act was issued to the petitioner. The mode of collection and recovery of tax is provided under Chapter XVII, starting with section 190 of the Act. The scheme of the Act is to treat the assessee, failing to pay the tax due within the period prescribed, as a defaulter. Section 220 of the Act deals with when a tax becomes payable and when an assessee is deemed to be in default. Sub-section (1) of this section provides that if any amount, otherwise than by way of advance tax, specified as payable in the notice of demand under section 156 shall be paid within thirty days of the service of the notice at the place and to the person mentioned in the notice. This period can be extended by the Assessing Officer on an application made by the assessee before the expiry of the due date for payment of tax or he may allow payment by instalments, subject to such conditions as the Assessing Officer may think fit to impose in the circumstances of the case. Under section 220(4) of the Act, if the amount is not paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer or Tax Recovery Officer. (iv) Save as otherwise provided in this sub-section, every person to whom a notice is issued under this sub-section, shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary. (v) Any claim respecting any property in relation to which a notice under this sub-section has been issued arising after the date of the notice shall be void as against any demand contained in the notice. (vi) Where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then, nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (vi) of section 226(3) of the Act, a person to whom a notice under this sub-section is sent has a right to object to the notice by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee and, then, nothing contained in this sub-section would require such person to pay any money or part thereof, as the case may be. However, if the Assessing Officer or the Tax Recovery Officer discovers that such statement was false in any material particular, then the person concerned becomes personally liable to pay to the extent of his own liability to the assessee on the date of the notice. After the person concerned objects by filing a statement on oath that the sum demanded or any part thereof is not due from him to the assessee then, recovery cannot be effected from him unless the Assessing Officer or the Tax Recovery Officer holds a further inquiry in which the concerned person is associated. On holding of the inquiry, if it is found that the statement made by the person concerned was false, then he becomes liable to pay the amount personally to the extent of his liability. In other wor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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