CHITTOORI RAMACHANDRA RAO Vs. TRC

JUDGEMENT

(1.) THE Income-tax Officer, B-Ward, Company Circle, Hyderabad, issued a certificate under Section 222 of the Income-tax Act to the Tax Recovery Officer for the recovery of a sum of Rs. 66,000 from the petitioner, the managing director of Kanakadurga Chit Funds (Private) Ltd., Nizamabad. Pursuant to the certificate a house belonging to the petitioner was attached and brought to sale. Though the actual amount due was Rs. 66,000 and that was the figure mentioned in the certificate issued under Section 222, by some mistake the order of attachment served on the petitioner and the sale proclamation published as required by the rules mentioned the sum of Rs. 1,04,080 as the sum payable by the petitioner. T horder of attachment was passed on December 14, 1971, and the sale proclamation was published on June 7, 1972. The petitioner feiled an objection-petition before the Tax Recovery Officer pointing out that the amount due from the petitioner was wrongly mentioned in the sale proclamation. But, on July 22, 1972, he withdrew the objection-petition and stated " regarding correct arrears of tax the position may be reconciled with reference to the office records. Auction may go on without interruption ". Thereafter, the figure mentioned in the sale proclamation was corrected though no fresh sale proclamation was published. The sale was held on August 21, 1972. The property was sold for a sum of Rs. 1,27,000 subject to a mortgage for Rs. 30,000. The auction purchaser deposited the entire sale consideration on September 2, 1972. On September 16, 1972, the petitioner filed an application before the Tax Recovery Officer under Rule 61 of the Second Schedule of the Income-tax Act with a request that it might also be treated as an application under Rules 9 and 11 of the Schedule. If the application was one under Rule 61 the application would have to be dismissed summarily for failure of the defaulter to deposit the amount recoverable from him in execution of the certificate. That was why the petitioner requested that the application might be treated as one under Rule 9 also. Before the Tax Recovery Officer an objection was raised that the application was not maintainable under Rule 9. But the objection was overruled. The main ground on which the sale was sought to be set aside was that the sale was without jurisdiction since the proclamation of sale mentioned an incorrect sum as due from the petitioner. The Tax Recovery Officer held that the mention of the wrong figure was an irregularity and that it did not vitiate the sale. The petitioner preferred an appeal to the Tax Recovery Commissioner. The Tax Recovery Commissioner confirmed the finding of the Tax Recovery Officer that the wrong mention of the amount due from the petitioner was only an irregularity which did not vitiate the sale. The Tax Recovery Commissioner also held that the application could not be treated as one under Rule 9 as it did not disclose any dispute between the Income-tax Officer and the defaulter.

(2.) SRI Trivikrama Rao, learned counsel for the petitioner, urged that the mention of a wrong amount in the sale proclamation as due from the petitioner went to the root of the matter and rendered the sale void. He relied on the decisions in Santosha Nadar v; First Additional Income-tax Officer, [1961] 42 ITR 715, 725 (Mad), SRIramiah v. Income-tax Officer, [1964] 52 ITR 409 (Mys). and Collector of North Arcot v. V. K. Kannan, [1967] 65 ITR 301 (Mad).

(3.) SECTION 225(4) provides :