9911796707
TMI Blog1991 (5) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... . The order puts the petitioner on notice that he has made payment to the defaulter even after receiving the attachment order which is illegal. Indeed, the impugned notice was issued in response to a representation made by the petitioner on February 13, 1989. One Gopal Das Gupta is the defaulter. For the assessment years 1974-75 and 1975-76, the total tax assessed was Rs. 67,44,255. A notice of demand was issued to the assessee-defaulter. On February 3, 1978, a notice was issued under section 226(3) of the Act addressed to the firm, Lalman Bhagwati Prasad (of which the petitioner was then a partner), stating that the aforesaid amount of tax is due from Gopal Das Gupta and that they should pay the amount held by them, on account of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26(3) issued to the partnership firm had not yet been withdrawn. The petitioner asked the Income-tax Officer to tell him what to do in the matter. The petitioner says, he did not receive any reply to this representation also. He repeated similar requests in the year 1984, but again there was no response. During the years 1984 and 1985, the petitioner says, he paid the entire amount held by him on account of the defaulter to the defaulter. This was done by him because there was no response to his repeated letters addressed to the Income-tax Officer and, according to the material supplied by the defaulter, no demands were outstanding against him. After the assessment was finally made in the year 1988 (against Gopal Das Gupta), another ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but there was no response in that behalf. Meanwhile, the defaulter (Gopal Das Gupta) was insisting upon payment to be made to him. In the circumstances and with a view to avoid litigation and humiliation, payment was made to him. The firm has since been dissolved ; the notice dated January 30, 1989, is invalid. Further, the notice under section 226(3) sent to the firm in 1978 came to an end when the appeals filed by Gopal Das Gupta were allowed and the demand was set aside. It did not revive when a fresh assessment was made. There was no fresh notice under section 226(3) addressed to the petitioner. In the circumstances, the notice under section 226(3) issued in the year 1988-89 may be withdrawn. It is in response to this letter that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner and which are mentioned hereinbefore is not denied. It is, however, contended that the order of attachment dated February 3, 1978, did not cease to be operative or effective just because the demand was stayed pending the appeals preferred by the defaulter. Learned standing counsel for the Revenue contended that the said order of attachment continued to be valid and effective, even though the appeals against the assessment orders giving rise to the said demand were allowed, because, says counsel, the appeals were not allowed absolutely, but that they were allowed with a direction to make fresh assessments. Accordingly, fresh assessments were made and though they resulted in the scaling down of the amount of tax payable, the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the order of assessment is set aside in appeal, the demand falls to the ground. In such a situation, the order of attachment issued under section 226(3) cannot survive ; it has no independent existence. Unless there is a provision in the Act or the Rules which keeps the order of attachment alive and subsisting notwithstanding the setting aside of the assessment order, it cannot survive. In other words, the situation would have been different if the Act contained a provision which kept such an order of attachment alive and subsisting in cases where the assessment order which gave rise to the demand (consequent attachment order) was set aside (whether on appeal or otherwise), coupled with an order to make a de novo assessment. Since there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt dated February 3, 1978, served upon the firm (of which the petitioner was a partner) ceased to be effective and operative the moment the appeals filed by the defaulter were allowed and the orders of assessment (which gave rise to the said attachment order) were set aside. The mere fact that, while setting aside the assessment orders, a direction to make a fresh assessment was given, does not keep alive the attachment order dated February 3, 1978. By the time the second order under section 226(3) dated December 26, 1988, was sent, not only was the firm which was holding the money on behalf of the defaulter, dissolved, but no money of the defaulter was available with the petitioner. (The order under section 226(3) dated December 26, 1988, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
