S PADMAPRIYA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE writ petition is filed for the issue of a writ of mandamus forbearing the respondents from in any way proceeding by way of sate of the properties referred to in the notice dated January 5, 1996, under reference No. S.1-23/Cuddalore, issued by the first respondent.

(2.) THE case of the petitioner is that the father of the petitioner was an income-tax assessee. He had income from a lodge known as "Hotel Brin-davan" and a cinema theatre known as "New Cinema THEatre" both at Cuddalore. He was assessed to income-tax for the assessment year 1976-77 and thereafter. It is stated that on receipt of the notice impugned, the peti- tioner made enquiry with the officials, and she carne to know that her father was liable to pay income-tax arrears of a sum of Rs. 67,575 with interest for the assessment years 1976-77 to 1983-84. THE petitioner is challenging the notice on the ground that her father was assessed to income-tax ex parte for the assessment year 1976-77 and the same was continued up to 1983-84, and her father also made certain payments and when her father committed defaults in the payment of instalments, there were demands requiring the father of the petitioner to pay the arrears of income-tax and her father subsequently paid certain amounts. It is stated that on December 11, 1985, the father of the petitioner died. It is stated that the property of the petitioner was attached on March 14, 1989, by the Tax Recovery Officer, Chennai. It is the specific case of the petitioner that under Rule 68B(3) of the Second Schedule to the Income tax Act, 1961, the sale of the property cannot be effected after a period of three years from the date of attachment. It is, therefore, stated that since the property was attached prior to June 1, 1992, and the orders which gave rise to the demand of tax were made prior to June 1, 1992, and the property was attached prior to June 1, 1992, the proceedings initiated are beyond the period provided in Rule 68B of the Rules. It is also stated that the petitioner is the legal representative of the deceased defaulter, but no notice was served on her.

(3.) ON the facts of the case, the demands for the payment of tax were made for the assessment years 1976-77 to 1983-84. Sub-rule (3) of Rule 68B of the Second Schedule to the Income-tax Act provides that where an immovable property has been attached before June I, 1992, and the order which gave rise to the demand of any tax, interest, fine, penalty or any other sum for the recovery of which the immovable property was attached became final before the said date, that date should be deemed to be the date on which the said order has become conclusive or final. The effect of Sub-rule (3) of Rule 68B of the Second Schedule to the Income-tax Act is that when the property was attached before June 1, 1992, and the order which gave rise to the demand of tax for the recovery of which the property was attached has become conclusive before June 1, 1992, then, June 1, 1992, is statutorily fixed as the date on which the demand became conclusive. The reading of Sub-rule (1) of Rule 68B shows that the period of three years provided under the said Act would commence from the end of the financial year in which the order which gave rise to the demand of tax has become conclusive. In my view, Rule 68B(3) should be read along with Rule 68B(1) of the Second Schedule to the Income-tax Act as Rule 68B(3) deals with cases where the attachment of the property was made prior to June 1, 1992, and the respondents are justified in calculating the period of three years from the end of the financial year in which the order which gave rise to the demand of tax became conclusive. Sub-rule (3) of Rule 68B, in my view, fixes June 1, 1992, as the date on which the demand of tax has become final in all cases where the demand was made and the property was attached prior to that date and that date is fixed for a limited purpose to determine the time limit prescribed under Sub-rule (1) of Rule 68B. In other words, in all cases falling under the ambit of Rule 68B(3), the date is statutorily fixed as June 1, 1992, as the conclusive date to find out the three years period prescribed under Sub-rule (1) of Rule 68B and it is not correct to assume that June 1, 1992, should be taken as the starting point for determining the limitation period under Sub-rule (1) of Rule 68B of the Second Schedule to the Act. Therefore, there is no difficulty in holding that the sale notice issued by the first respondent on January 5, 1996, is within the period stipulated in Rule 68B(1) of the Second Schedule to the Income-tax Act.