GOPI CHAND Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner was assessed to income-tax for the assessment years 1945-46, 1946-47 and 1947-48, vide orders dated 31st May, 1948, 14th October, 1948, and 29th January, 1949, respectively, by the Income-tax Officer, Rohtak. The assessment orders for the first two years show that the petitioner had filed returns of income as "individual" but the Income-tax Officer assessed him in the status of Hindu undivided family. In all the three orders the name of the assessee is mentioned as "lala Gopi Chand Dallal, Railway Road, Rohtak" while the status is mentioned as Hindu undivided family. Against these orders, the petitioner filed appeals which were accepted in part by the Appellate Assistant Commissioner of Income-tax on May 13, 1950. The Appellate Assistant Commissioner allowed reduction in the income of the petitioner by Rs. 9,000 for the year 1946-47 and Rs. 1,200 for the year 1947-48. He also held that the status of the petitioner was that of an individual and not Hindu undivided family. He, therefore, ordered that the status shall be changed to that of an individual. Against the orders of the Appellate Assistant Commissioner in all the three appeals, the petitioner filed appeals before the Income-tax Appellate Tribunal, which were decided on April 5, 1951. The Tribunal reduced the income of the petitioner for 1945-46 from Rs. 35,000 to Rs. 27,000, for 1946-47 from Rs. 56,000 to Rs. 40,000 and for the year 1947-48 from Rs. 1,25,000 to Rs. 75,000.

(2.) THE Income-tax Officer had issued notices of demand to the petitioner under Sections 29 and 45 of the Income-tax Act, 1922, along with the assessment orders, but on his failure to pay the amounts, recovery certificates were sent to the Collector, Rohtak, on July 17, 1948, with regard to the assessment year 1945-46, on January 26, 1949, with regard to the assessment year 1946-47, and on February 23, 1950, for the assessment year 1947-48. In pursuance of those recovery certificates, the Collector, Rohtak, attached the property of the petitioner. However, no further proceedings were taken till December 21, 1965, on which date the Tax Recovery Officer of the income-tax department, Patiala, called upon the petitioner to deposit the amounts due from him within a week failing which coercive measures would betaken against him. On February 21, 1966, the Tax Recovery Officer told the petitioner that if the amounts were not deposited, he would be arrested. At that stage, the petitioner filed the present petition challenging the recovery proceedings mainly on the following grounds: 1. That no notices under Sections 29 and 45 of the Income-tax Act, 1922, were at all issued and served on the petitioner after the orders of the Assistant Appellate Commissioner of Income-tax and the Income-tax Appellate Tribunal, and hence no certificate for the recovery of the amount could be issued to the Collector under Section 46 (2) of that Act. 2. That in view of the appellate orders, the earlier orders, notices of demand and recovery certificates issued by the Income-tax Officer must be taken to have been superseded and attachments made in pursuance of the recovery certificates, already issued, must be deemed to have ceased with effect from the date of the appellate orders. Consequently, the order of the Collector and the threat of arrest are void and without jurisdiction.

(3.) THAT a certificate could be forwarded under Section 46 (2) of the Income-tax Act, 1922, to the Collector for recovery only if the petitioner was an assessee in default under Section 45 of that Act. Since no notice of demand under Section 29 of the said Act was issued to the petitioner within time, the recovery certificate could not be issued and no recovery proceedings could be taken in pursuance thereof. 3. Written statement has been filed by the respondents in which it has been submitted that the recovery proceedings were in accordance with law and not invalid, and so cannot be quashed.