MOHAN WAHI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this petition under Article 226 of the Constitution of India, the petitioner challenges an order passed by the Tax Recovery Officer confirming an auction sale of house property No. D-53/91-D situate at Luxa in the town of Varanasi and also an order passed by the Commissioner of Income-tax by which the latter dismissed the petitioner's revision petition under Section 264 of the Income-tax Act, 1961, against an order of confirmation of sale.

(2.) COUNTER and rejoinder affidavits have been exchanged.

(3.) IN the counter affidavit filed on behalf of respondents Nos. 1 and 2 it has been stated that the assessments were completed by the Assessing Officer ex parte after rendering reasonable opportunity to the assessee. It is claimed that the petitioner's contention that he came to know of the demand in 1986/1987 is wrong because notices in Form I. T. C. P. No. 25 were issued and sent to the petitioner by registered post in August, 1975, and adjournment was sought through one Dipanker Basu through a letter dated August 28, 1975. It is also stated that the letters were issued to the two persons aforesaid and they sent their replies through letters dated October 15, 1975, and October 5, 1975. Although it is stated in the counter affidavit that a photocopy of the letter and RAD is enclosed, no document has actually been enclosed with the counter affidavit. It is claimed that the recovery certificates were issued to the Tax Recovery Officer in the year 1973. Thereafter the aforesaid property was attached and sale proclamation was issued fixing January 3, 1980, for sale which was postponed to January 11, 1980, on which date the sale was actually conducted and Smt. Ram Jyoti Devi, respondent No. 3, declared as the purchaser. The auction purchaser deposited the amounts as required under the law by January 25, 1980, and thus discharged her duty within the stipulated period. It is claimed that the issue of the sale letter was held up because of the civil court's stay order dated January 9, 1980, by which the confirmation of sale was stayed. The said stay order was granted on the application of Smt. Padma Wahi and the suit filed by her was ultimately dismissed. It is claimed that at the time of the auction of the property arrears of demand as mentioned in the recovery certificates Nos. 77, 78, 79, 80, 81 and 82 were outstanding and no objection was filed by the petitioner before the Tax Recovery Officer at the time of the auction proceedings or even thereafter and the validity of the auction was not challenged. It is claimed that no application either by the firm or by the two partners was filed under the Second Schedule to the INcome-tax Act for reconsideration of the auction proceedings or for setting aside the auction sale dated January 11, 1980, and that no occasion arose on the part of the Tax Recovery Officer to reconsider the valid auction concluded on January 11, 1980. According to the respondents, the issue of the sale certificate was only a consequential action. It is admitted in the counter affidavit that as a result of the appellate orders, the demands covered by the aforesaid certificates stood wiped out. It is also claimed that the plea of limitation in conducting the auction sale was not applicable to the sale in question which according to the respondents was held before the enactment of the provision of Rule 68B of the Second Schedule. It is also claimed that what was sold in the auction was only the interest of S. M. Wahi and P. M. Wahi in the aforesaid property and, therefore, the interest of the other co-sharers, if any, was not affected by the sale. It is claimed that the Commissioner of INcome-tax has decided the revision petition according to law taking into consideration all material facts.