LAWS(KAR)-1998-7-12

SALAR PUBLICATIONS TRUST Vs. INCOME TAX OFFICER

Decided On July 30, 1998
SALAR PUBLICATIONS TRUST Appellant
V/S
INCOME-TAX OFFICER Respondents

JUDGEMENT

(1.) THIS is the second round of litigation in this court. The earlier writ petition W. P. No. 15879 of 1987 disposed of on December 7, 1987, was filed by the petitioner along with some other petitioners. In the said writ petition, annexures-K and L, dated September 28, 1987, were assailed. The petitioner filed objections in pursuance of the notice issued under Section 226(3) of the Income-tax Act. The petitioner disputed the liability to pay any amount to Mr. Askar Mirza. The objections were rejected on the ground that the objections are not accompanied by a statement on oath as required under Section 226(3)(vi) of the Act. Learned counsel for the petitioner filed a copy of the letter dated November 4, 1987, from which it was found that the affidavit sworn by Dr. Mumtaz Ahmed Khan, secretary and trustee of the Salar Publications Trust, was submitted, and the court directed that the objections submitted by the petitioner be considered by passing an order under Section 226(3) of the Act and thereafter the proceedings for recovery could be taken. In pursuance of the said directions, the order dated October 7, 1988, was passed by the Income-tax Officer, Ward-3(1), Bangalore, which is now assailed in this writ petition.

(2.) THE facts of the case are that there was a partnership firm in the name of Salar Publications. Salar Publications had borrowed a sum of Rs. 10,74,000 between February, 1981, and May, 1981, from one Sri Askar Mirza who is an assessee under the Income-tax Act and there were dues outstanding against him. THE Tax Recovery Officer initiated proceedings under Section 226(3) of the Income-tax Act and notice dated May 25, 1982, was issued in the name of the firm, which was served on Sri K. Rehman Khan on May 29, 1982. Besides, Sri K. Rehmari Khan, power of attorney holder of Sri Askar Mirza was the manager of the newspaper Southern Speaker India Daily, published by the trust and thus was managing the affairs of the trust. This notice was for a sum of Rs. 5,49,644. Salar Publications consisted of six partners and has admitted Salar Publications Trust as the seventh partner on March 1, 1984. THE firm was dissolved within a short span of one month from March 31, 1984, whereby all the remaining six partners ceased to be partners of the firm and all assets and liabilities were taken over by the trust.

(3.) BEFORE me, learned counsel for the petitioner has again raised the very three questions which were raised before the Income-tax Officer, viz., that the trust is not liable to pay the dues because there was no valid service of notice under Section 226(3) and the proceedings are barred by Section 231 of the Act and that the affidavit has only been rejected, but has not been found false.