Law: Income Tax Act, 1961

Section: 222,232

Section 222, read with section 232, of the Income-tax Act, 1961 and article 14 of the constitution of India - Collection and recovery of tax - Certificate proceedings - Assessee purchased some stock-in-trade from a defunct firm - Consequently, he was assessed under section 144 as successor of said firm - Proceedings for recovery of dues under section 222 were initiated against assessee - Assessee challenged said proceedings by submitting that process of recovery through Tax Recovery Officer was more onerous and disadvantageous and hence exercise of option by designated authority to adopt some was offensive of article 14; and that it was not successor to firm as no notice was served on firm - Whether though section 232 provides institution of a civil suit, provisions of section 222 for alternative mode of recovery cannot be said to be offending article 14 of constitution - Held, yes - Whether further, question as to whether assessee merely purchased stock-in-trade or was transferee was a question of fact to be determined by assessing authority and assessee having not raised any objection, before him, same could not be raised in writ proceedings - Held, yes FACTS The assessee purchased some stock-in-trade on 1-7-1963, from a defunct firm. On 29-3-1968, he was assessed under section 144 for the assessment year 1963-64, as the successor of said defunct firm. The demand notice, assessment order, etc., were not served on said defunct firm. The Tax Recovery Officer initiated proceeding for recovery of dues against the assessee. The assessee appeared before the Tax Recovery Officer and objected that he was not the successor and was not liable to pay the tax. On 28-1-1969, the objection of the assessee was overruled on the ground that the validity of the assessment could not be questioned before the Tax Recovery Officer. The assessee filed appeal under rule 86 of the Second Schedule before the Revenue Divisional Commissioner, which was dismissed. HELD The assessee pointed out that there are two alternative methods of recovery, one under section 222 and other under section 232, the process of recovery through the Tax Recovery Officer being more onerous and…

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