UNION OF INDIA Vs. JAGAT SINGH

JUDGEMENT

(1.) This judgment will dispose of R.F.A. Nos. 449 and 450 of 1975 which contain similar questions of law and fact. The facts in the judgment are being given from R.F.A. No. 449 of 1975.

(2.) Defendant No. 1 was assessed to Rs. 1,35,969 as income-tax,--vide order dated 27th August, 1968 of the Income Tax Officer. The amount was not paid by him and, therefore, a certificate under Section 222 of the Income-Tax Act, 1961 (hereinafter referred to as the Act), was sent by the Income-tax Officer to the Tax Recovery Officer, Amritsar, for realising the amount from him. The Tax Recovery Officer attached property No. 1797 /V-3 in execution of the said certificate. Smt. Sheela Wanti, Defendant No. 3, filed an objection petition against attachment and said therein that the property belonged to her. The Tax Recovery Officer accepted the objection,--vide order dated 16th September, 1970, and held that the property belonged to her and was, therefore, not liable to attachment and sale for recovery of the tax.

(3.) The Plaintiff has averred that the property, though purchased in the name of Defendant No. 2, in fact, belonged to Defendant No. 1 as Defendant No. 2 had no source of income and the consideration for purchasing the property in her name proceeded from him. Defendant No. 2, while proceedings for recovery of the amount were pending, in order to defraud the Tax Recovery Officer, transferred the property to Defendant No. 3. It is further alleged that the Tax-Recovery Officer accepted the objection on flimsy grounds and did not take into consideration the real facts. Consequently, the Plaintiff instituted a suit for declaration to the effect that the house belonged to Defendant No. 1, that Defendant No. 3 was only a Benamidar and that the property was liable for recovery of income-tax amounting to Rs. 1,35,969, along with interest thereon.