SYED MUBARIK SHAH NAQUASHBANDI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS Letters Patent Appeal is directed against the judgment of a learned single judge of this court, J. N. Bhat J., in Writ Petition No. 86 of 1966, decided on September 19, 1968. The learned single judge partly accepted the writ petition and partly dismissed it. The claim of the appellant for the refund of Rs. 1,410.66 was rejected. Refund was allowed to the petitioner of Rs. 497.84.

(2.) THE appellant is an income-tax assessee from whom a demand of Rs. 1,787.97 was made by the ITO, vide Communication No. 1491, dated August 24, 1959. This demand made by the department was contested by the appellant. On September 1, 1959, vide letter No. 1832, the ITO claimed a sum of Rs. 2,337.62 as the arrears. THE appellant controverted this also and submitted before the ITO that in view of Section 46(7) of the Indian I.T. Act, 1922, proceedings for the recovery of the amount could not be taken against him after the expiration of one year from the last day of the financial year in which any demand was made under the Act. In spite of this submission, the ITO, vide his letter dated April 2, 1960, intimated to the appellant that a sum of Rs. 2,500 was outstanding against the appellant. On a request made by the appellant, he was furnished with the details of the amounts due from him in respect of each assessment year together with the date of assessment and the particulars of the officer to whom recovery certificate was issued, along with number and date of the certificate. THE appellant made enquiries from the Treasury Officer and the Tehsildar, Srinagar, Both these officers denied to have received any certificate of recovery from the I.T. department. THE appellant approached the I.T. department and appraised them of this position with a view to impress upon them that no recovery could be made from him in view of Section 46(2), Section 46(5) and Section 46(7) of the Indian I.T. Act of 1922. He then made a representation to the IAC who informed the appellant that the matter be discussed with the concerned ITO. THE appellant approached the ITO but the latter was not available. Subsequently, it transpires that the ITO passed an order asking the National and Grindlays Bank Ltd., Srinagar, to deduct a sum of Rs. 1,908.50 from the account of the appellant. This amount included a sum of Rs. 497 84, about which a demand notice and challan had been issued on January 21, 1964. Before the learned single judge the main ground of attack made by the appellant was that the recoveries were sought to be made after one year from the last date of the financial year when the amount fell due and as such the proceedings were barred under Section 46(7) of the Indian I.T. Act of 1922. In so far as the demand of Rs. 497 84 was concerned, the grievance of the appellant was that the notice of demand in respect of this amount had been made on January 21, 1964, but the direction by the ITO had been given to the National and Grindlays Bank Ltd., Srinagar, by means of letter dated January 18, 1964, and that direction having been issued prior to the service of notice was not authorised by law. It was urged before the learned single judge that no recovery could be made before the expiration of 35 days from the service of the notice on the assessee. THE writ petition was resisted by the ITO and it was maintained that the proceedings were started for the recovery of the amount within the stipulated period of one year. It was also stated in the affidavit of the ITO that proper recovery certificate had been issued to the Tehsildar and to the Treasury Officer.

(3.) FOR a proper appreciation of the point in controversy, it would be relevant to first notice the relevant provisions of Section 46 of the I.T. Act. This section deals with the mode and time of recovery of arrears of tax when an assessee is in default.