Law:

Section:

Section 222 of the income-tax act, 1961, read with Rule 31 of second schedule of the Income-tax Act, 1961-Recovery of tax-Attachment of property in court's custody-Assessee-firm secured two awards against company b for certain amount and put them into execution in district court-Firm and partners individually had to pay huge tax arrears-Firm was dissolved on certain date on which tro issued prohibitory order to B and to district judge under rule 31 of second schedule-B deposited in court major portion of sums payable by it to firm-Meanwhile some other creditors of assessee filed suits and obtained decrees which created a charge upon amount payable by b to assessee-Whether prohibitory order under rule 31, attaching property of firm, can be issued for recovery of arrears of tax dues against individual partners-Held, no Section 182(4) of the income-tax act, 1961-Firm-Assessment of registered firm-Whether dues against individual partners could be recovered from firm under section 182(4) where there was no evidence that these could not be recovered from partners-Held, no Section 281 of the Income-tax Act, 1961-Transfer-To be void in certain cases-Whether, in view of facts mentioned under the head 'recovery of tax attachment of property in court's custody charge created under decrees obtained by other creditors was in violation of section 281, and, therefore, void-Held, void only to extent of tax due from assessee-firm-Whether execution application filed by one of creditors for realisation of amount due after initial execution application was dismissed but while prohibitory order/attachmentremained in force, was in continuation of initial execution application and was not barred by time-Held, on facts, yes Facts The assessee-firm D, which secured two awards against a company, B, in its favour and put them into execution in the District Court, was dissolved on 28-9-1980. Both the firm and the partners individually had to pay huge arrears of income-tax. On the date of the dissolution, the TRO issued prohibitory order to B and to the District Judge against the amount due from B to the firm in exercise of his powers under rule 31 of the Second Schedule. B deposited the…

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