9911796707
TMI Blog1987 (1) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961, by the Tribunal is correct ? (3) Whether, on the facts and in the circumstances of the case and on an interpretation of section 26(2) of the Indian Income-tax Act, 1922, should the Income-tax Officer record a finding that the tax could not be recovered from the predecessor and the order vitiated for lack of such finding ? " These questions cannot be specifically answered for the reason that none of the documents relating to the assessment, in respect of which the questions have been referred, or the order under section 26(2) of the Indian Income-tax Act, 1922 (Act II of 1922), has been placed before us. It would, however, appear from the submissions at the Bar that an assessment had been made on the predec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding that year from the person who succeeded if the tax payable cannot be recovered from the predecessor. When Act 11 of 1922 was repealed by section 297 of the present Act, provision was inserted in clause (j) of sub-section (2) thereof for recovery in respect of assessment made under the repealed Act. That clause reads : " (j) any sum payable by way of income-tax, super-tax, interest, penalty or otherwise under the repealed Act may be recovered under this Act, but without prejudice to any action already taken for the recovery of such sum under the repealed Act." (emphasis supplied) This shows that, notwithstanding the provisions of the General Clauses Act, 1897, recovery in respect of assessment already completed under the repe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessor had been heard by the recovering authority before recording a finding in terms of section 170 to the effect, that recovery could not be had from the predecessor. These two conditions prescribed by the Tribunal are, in our view, totally unwarranted by the new Act. What apparently prompted the Tribunal to say that action should have been taken under the old Act were the words " without prejudice to any action already taken for the recovery of such sum under the repealed Act " appearing in clause (j) of section 297(2). The Tribunal wrongly, in our view, thought that the words " without prejudice, etc. " indicated that action ought to have been taken under the old Act. Those words are only intended to protect recovery proceedings alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or-company is not sufficient. The Income-tax Officer should have recorded a finding after hearing the assessee in respect of that matter. Such a finding is not found in the impugned order. Nor did the departmental representative bring to our notice that such a finding bad been recorded by the Income-tax Officer, after hearing the assessee, in any other place. For this reason also, we hold that the impugned order is not valid." This observation implies that the fact was recorded, but not preceded by notice to the assessee. Such notice was unnecessary. The Tribunal has thus erred in law in these two crucial aspects. However, as stated earlier, in the absence of relevant papers, including the assessment order (annexure A is admittedly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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