JANATHA TEXTILES Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) THIS appeal is directed against the judgment of the division Bench of the High Court of Andhra Pradesh at hyderabad passed in writ petition No. 22038 of 1996 on 6. 9. 2001.

(2.) THE short question which arises for consideration in this appeal is whether the Income Tax Department is justified in auctioning the attached property for recovery of debt?

(3.) A demand of Rs. 7,84,072/- for the assessment year 1985-86 was initially raised against the appellant firm. By virtue of grant of partial relief in the appeal, the demand was reduced to Rs. 4,65,174/- and as against the said amount, the appellant firm paid only Rs. 4,34,927/- leaving a balance of rs. 30,247/ -. In addition to this, there was demand of rs. 5,65,538/- raised by virtue of levy of penalty imposed under section 271 (1) (c) of the 1961 Act for the said assessment year. The levy was confirmed in appeal by the commissioner of Income Tax (Appeals ). Further demands were also raised for a sum of Rs. 2,82,160/-, Rs. 3,42,518/-and Rs. 2,86,075/- at the hands of individual assessment of appellant nos. 2, 3, and 4 respectively. In the assessment year 1985-86, partial relief was granted and ultimately quantified the amount due from the appellant firm and its partners. After adjusting the amounts paid, the amount due as on the date of auction for the assessment year 1985-86 stood at rs. 4,99,133/ -. In addition to these arrears, an amount of rs. 7,56,017 fell due by way of interest. Thus, a total amount of Rs. 12,55,150/- was due from the appellants for the assessment year 1985-86 towards tax, interest and penalty.