Law: Constitution of India

Section: 226

(Appeal from the judgment and order of. the Mysore High Court, dated February 1, 1967, In Writ Petition No. 846 of 1965). Income-tax-Recovery of tax-Notice of demand-Garnishee order-Whether can be issued under Act of 1961 in respect of liability under Act of 1922-Notice to third party-Whether can be, issued before expiry of time given to assessee. in notice of demand to pay -- Writ petition Discretion to treat assessee as not in default-Whether arbitrarily exercised-Particulars to be given Income-tax Act, 1961, Ss. 156, 22016), 226(3) & 29712)(j ) Constitution of India, Art. 226. In cases falling within section 297(2)(j) of the Income-tax Act, 1961, a g., in a proceeding for recovery of tax and penalty under the old Act of 1922, it is not required that all the sections of the new Act relating to recovery and collection should be literally applied but only such of the sections will apply as pare. appropriate in the particular case and subject, if necessary; to suitable modifications. The Income-tax Officer has, therefore, authority to issue a notice of demand under section 156 of the income-tar Act, 1961, and a notice under section 226(3) to a third party, with respect to the tax liability of an assessee incurred under the Act of 1922. There is no reference in section 226(3) of the Income-tax Act, 1961, to any default on the part of the assessee. In a proceeding under section 226(3), it is not necessary that the assessee should be in default or should be deemed to be in default. Under, notices of demand under section 166 of the Income-tax 'Act, 1961, served on the assessee for the assessment years 1962-63 and 1963-64, the time given for payment was to expire only on May 21, 1965, but before the expiry of period specified therein for the payment of the amount of the demand, the Income-tax Officer issued, on April 23, 1965, a notice on a third party under section 226(3) of the Act : Held, that there' was nothing in the language of section 226(3) to-suggest that the assessed had to be in default before a notice trader that section was Issued ; and the notices were validly Issued. In the absence of specific particulars in the writ petition, It is not…