9911796707
TMI Blog1993 (9) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... med as Jay Cinema, along with land appurtenant thereto, situated in khasra No. 571, Old Railway Road, Gurgaon, in accordance with Part III of the Second Schedule to the Income-tax Act, 1961. On August 27, 1975, Smt. Sudershan Malik, wife, Inder Raj Malik Sanjiv Kumar, sons, and Janak Raj Malik, respondents Nos. 5 to 8, respectively, entered into an agreement to sell the above-said property in dispute to Messrs. Sujeta Consultants and Sales Pvt. Ltd., through Mr. D.P. Mehta, respondent No. 2, for a sale consideration of Rs. 7,25,000. On October 21, 1975, respondents Nos. 5 to 8 entered into another agreement to sell the property in dispute in favour of Messrs. Jayanti Films (India) Pvt. Ltd., respondent No. 1, through respondent No. 2 for a sale consideration of Rs. 4,75,000. The possession of the property in dispute was delivered to respondents Nos. 1 and 2 by respondents Nos. 5 to 8. Respondents Nos. 1 and 2 had paid Rs. 2,75,000 towards the sale consideration to the proposed vendors on two occasions and the balance amount of Rs. 2,00,000 was yet to be paid. The Tax Recovery Officer proceeded under section 222 of the Income-tax Act read with the rules contained in Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u undivided family failed to pay all arrears of the said dues, the suit property was put to sale after due publication. Respondents Nos. 1 and 2 purchased the property in public auction for Rs. 4,06,000 on March 28, 1977, and the sale was confirmed on April 29, 1977. Out of the total sale consideration of Rs. 4,06,000, an amount of Rs. 2,46,000 was paid to the Tax Recovery Officer of the Income-tax Department, respondent No. 4, whereas the remaining amount was adjusted towards the payment made by respondents Nos. 1 and 2 to the prospective vendors. The plea of the plaintiffs to the effect that the Hindu undivided family ceased to exist on May 15, 1974, was denied and it was contended that Janak Raj Malik had suffered a collusive decree and judgment dated May 15, 1974, in order to deceive the income-tax authorities and, therefore, such fraudulent and collusive decree cannot have the effect of disrupting the joint Hindu undivided family. The auction purchaser had paid Rs. 1,01,500 with the fall of the hammer along with Rs. 4,070 on account of other charges. The plaintiffs having not taken these objections at the time of confirmation of sale were now estopped from taking the same in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olving an identical question of law and facts are proposed to be disposed of by this common judgment. I have seen the pleadings in the suits, the evidence adduced by the parties in the two suits and the judgments of both the courts below and have also heard learned counsel for the parties. Learned counsel for the appellants has firstly argued that the appellants had become owners of the property in dispute through civil court judgment and decree dated April 19, 1975, exhibit P-A and exhibit P-B, and the findings of the courts below to the contrary were illegal because of the family partition whereby the suit property came to the share of the appellants and was also acknowledged by the Income-tax Officer, vide his order dated December 2, 1977, exhibit PW-5/H. I do not find any force in this argument. Section 171 of the Income-tax Act, 1961, deals with assessment after partition of a Hindu undivided family. Admittedly, the property in dispute was originally Hindu undivided family property and even according to the appellants the Hindu undivided family was not disrupted prior to the passing of the judgment and decree, exhibit P-A and exhibit P-B, dated April 19, 1975. Anil Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated April 19, 1975, had no effect on the right of the Income-tax Department to recover the arrears of income-tax, etc., which were due from the Hindu undivided family prior to the disruption of the Hindu undivided family. In CIT v. Sundaram [1976] ITR 339 (sic), a Division Bench of the Karnataka High Court has held that for the purpose of the Income-tax Act, the Hindu undivided family is a separate unit of assessment and is an assessee in its right dependent on its members. Even if the partition had been effected that would not enable a member of the Hindu undivided family to escape from the obligation to discharge the tax liability out of the share of the Hindu undivided family allotted to him. Again in Venkatesh Dhonddev Deshpande v. Sou. Kusum Dattatraya Kulkarni, AIR 1978 SC 1791, it was held that where the father is the karta of the Hindu undivided family and debts are contracted by the father in his capacity as manager and head of the family for family purposes, the sons as members of the joint family are bound to pay the debts to the extent of their interest in the coparcenary property. In view of the above discussion, I do not find any fault with the finding of the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against Rs. 2,45,000. On the basis of the said order, letter, exhibit D-9, was issued on the same date informing respondent No. 1 that as per reasons recorded separately they were permitted to deduct Rs. 2,00,000 out of Rs. 4,06,000 and deposit the balance amount payable, i.e., Rs. 1,04,500, within the stipulated period (Rs. 1,01,500 was paid at the time of sale). Their claim for Rs. 45,000 could not be adjusted. A self-contained complete procedure for attachment and sale of immovable property of a defaulter assessee in execution of a certificate specifying the arrears due from the said assessee is provided under section 222 of the Act and the Rules. Part III of the Second Schedule is comprised of rules 48 to 68A. This part deals with attachment and sale of immovable property. Under rule 48, attachment of the immovable property of the defaulter can be made. Rule 49 provides that a copy of the order of attachment has to be served on the defaulter. Proclamation of attachment is dealt with under rule 50. Rule 51 provides that where any immovable property is attached under this Schedule, the attachment shall relate back to, and take effect from, the date on which the notice to pay th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and (c) of the abovementioned second argument of their learned counsel, they could certainly file an application under rule 61 of the Rules within thirty days from the date of sale seeking setting aside of the sale of the property in dispute and then the Tax Recovery Officer on proof of substantial injury to the plaintiffs on account of the above mentioned irregularities was duty bound to set aside the sale. But, it is not even the case of the plaintiffs that they had moved such an application. Rule 9 of the Second Schedule to the Income-tax Act, 1961, provides a general bar to the jurisdiction of the civil courts, save where fraud is alleged. It reads as under : " 9. Except as otherwise expressly provided in this Act, every question arising between the Income-tax Officer and the defaulter or their representatives relating to the execution, discharge or satisfaction of a certificate duly filed under this Act or relating to the confirmation or setting aside by an order under this Act of a sale held in execution of such certificate shall be determined, not by suit, but by order of the Tax Recovery Officer before whom such question arises. " Admittedly, the plaintiffs in Civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute was unlawful and illegal. I have carefully gone through these three letters. These letters do not in any way improve the case of the appellants. Para No. 3 of letter, exhibit D-3, from the Income-tax Officer to the Tax Recovery Officer reads as under : " The assessee in his petition before the Commissioner of Income-tax has stated that a partition took place in the family on May 15, 1974. Return for the assessment year 1975-76 has not been filed and I have issued notice under section 148 and am processing the assessment by issuing notice under section 142(1). Unless order under section 171 accepting the partition is passed by the Income-tax Department, the properties legally continue to be in the ownership of the Hindu undivided family. This agreement of sale by the members of the Hindu undivided family has nothing to do with our demand. At best it can be considered to be an agreement between the two parties and as such their individual agreement to defraud the Government revenue, cannot be given any weight. You are, therefore, perfectly within your right to proceed with the recovery of demand, by attachment, and auction of Eros Cinema at Gurgaon. Kindly take urgent necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of articles 99 and 100 of the Schedule to the Limitation Act. The suit could be brought within one year from the date when the sale was confirmed. In this case the sale was confirmed on April 29, 1977, and the suit having been instituted on March 27, 1980, was obviously time barred. The matter can also be looked at from another angle. An application for setting aside the sale could be filed under rule 61 of the Second Schedule to the Income-tax Act within thirty days from the date of sale, i.e., April 29, 1977. So, the plaintiff could challenge that order also within one year of his having attained majority. He attained majority on March 20, 1978. He could challenge that order up to March 20, 1979. Admittedly, the plaintiff did not avail of that remedy also within limitation. Learned counsel for the appellant has argued that a Full Bench judgment of the court in Kishan Chand Aggarwal v. Union of India [1975] 100 ITR 496 ; [1975] PLR 7 had set aside the sale where the nature of the property required to be sold was not fairly and accurately described in the sale proclamation and that here, in this case also, the sale was held in pursuance of a proclamation which was v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein the provisions of Order 21, rules 84, 85 and 86, Civil Procedure Code, had been invoked. But, herein, these two cases the sale in execution of the certificate was governed by the provisions of rules 48 to 68A of the Second Schedule to the Income-tax Act which provide a complete procedure for dealing with all the possible situations. These rules are not in pari materia with the provisions of Order 21, rules 84, 85 and 86, Civil Procedure Code, and, therefore, the above-said two judgments are of no avail to the appellants. The other two judgments relied upon by learned counsel for the appellants in support of his abovesaid contention are also of no assistance to them because in both of those judgments, namely, Sardara Gurdit Singh v. Sardara Dharam Singh, AIR 1976 P H 271, and Ganga Singh v. State of Punjab [1968] 70 PLR 395, the provisions of sections 85, 88 and 89 of the Punjab Land Revenue Act which had been invoked were held to be in pari materia with Order 21, rules 84, 85 and 86, Civil Procedure Code, respectively. In view of the above discussion, the impugned judgment and decree dated April 2, 1990, passed by the Additional District Judge, Gurgaon, is hereby confir ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
