Law:

Section:

Section 222, read with rule 2 of second schedule, of the income-tax act, 1961 - Recovery of tax - Demand notice to defaulter by TRO - Petitioner partner in a registered firm assessed to income-tax - Firm filed appeal to AAC and during its pendency ITO issued certificate for recovery of tax from assessee-firm, mentioning therein names of two partners - TRO issued demand notice to petitioner - Whether recovery proceedings and said recovery notice valid in law - Held, no Facts The petitioner was a partner in a registered firm RT. The said firm was assessed to income-tax for the assessment years 1962-63 and 1963-64. It filed an appeal to the AAC against the assessment orders but, during its pendency, the ITO issued a certificate under section 222 to the TRO for recovery of the amount due by virtue of the aforementioned assessment orders. In this certificate, the ITO certified the amount of tax as "due from RT resident of Bangalore by partners VT and SN". The TRO issued on 8-08-1975 a notice to the petitioner, styled as "Notice of demand to defaulter", under rule 2 of the Second Schedule, demanding the payment of income-tax due from him in terms of the ITO's said certificate. The petitioner challenged this notice in the present writ petition on the grounds that (i) he was not the assessee; (ii) no notice of demand of any tax payable had been issued to him; (iii) he could not be considered to be an assessee in default; and (iv) no certificate had been issued or could be issued against him. Held 1. The scheme of the Act was that there should first be an assessment pursuant to which a demand notice should be served on the assessee. If there was a default in paying amount demanded, then such assessee would become an assessee in default and recovery proceedings by issue of a certificate could be initiated against him. The primary thing was that the assessment must be against a person who was ultimately sought to be proceeded against and demand notice should have been served on him consequent on such assessment. The instant case did not satisfy the above requirement. The defaulter mentioned in the certificate issued by the ITO was the assessee, namely, RT. This was…

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