Law: Income Tax Act, 1922

Section: 45,46

Income tax Act (XI of 1922), Ss. 45 & 46 Recovery of tax-¬Certificate of arrears issued to Collector on basis of assessment order Tax reduced on appeal Fresh notice of demand whether necessary Recovery proceedings on basis of original certificate-¬Whether permissible. The tax as assessed by the Income tax Officer was not paid by the assessee after service of the notice of demand. A certificate was forwarded to the Collector under section 46 (2) of the Income-tax Act for recovery of arrears of tax and proceedings were initiat¬ed for the attachment of the immovable properties of the assessee. The tax payable by the assessee was however substantially reduced by the Appellate Assistant Commissioner on appeal. No fresh notice of demand was issued thereafter and the Collector proceeded to bring to sale the properties attached on the basis of the original certificate. On a petition by the assessee for a writ quashing the recovery proceedings: Held, that the Department was not entitled to treat the assessee as a defaulter in the absence of a fresh notice of demand being served after the Appellate Assistant Commissioner reduced the tax payable by the assessee, and the proceedings of the Collector based on the original certificate were, therefore, illegal. The Department was bound to issue a separate demand notice in accordance with the decision of the Appellate Assistant Commissioner fixing the time and place for payment of the tax. Metropolitan Structural Works Ltd. v. Union of India (1955) 28 I T R 432 fol. JUDGMENT HOMBE GOWDA, J. The Petitioner Seghu Buchiah Setty has presented these two petitions under Article 226 of the Constitution of India for issue of a writ of certiorari or direction in the nature of a writ of certiorari quashing the proceedings of the Income tax Officer, Kolar, and the Commissioner of Income tax, Bangalore, in the petitioners cases under sections 45 and 46 of the Indian Income tax Act for the assessment years 1953 54 and 1954 55. Two separate orders for the years 1953 54 and 1954 55 were passed by the Income tax Officer against the petitioner under section 23 (4) of the Indian Income tax Act fixing up his assessable income for the…

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