Law: Income Tax Act, 1961

Section: 293

(a) Income-tax----Suits in Civil Court---Bar of suits---Recovery proceedings initiated b~ Revenue---Suit against Revenue was not competent---Indian Income Tax Act, 1961, S.293. (b) Income-tax--- ----Appeal---Jurisdiction---Issue regarding jurisdiction can be raised at appellate stage. The appellants were trustees of the K trust. The income of the trust to the extent of 25 per cent was utilised for charitable purposes and the remaining 75 per cent. accrued to its beneficiaries. the appellants filed a suit for recovery of Rs.47,196 from the respondents, namely, the Union of India, the Income-tax Officer and the Central Bank of India on the averments that respondents Nos. l and 2, namely, the Union of India and the Income-tax Officer, had illegally obtained from the account of the trust in Central Bank of India, a sum of Rs.36,063, even though there were no tax dues against the trust. Respondents Nos, I and 2, the Union of India and the Income-tax Officer, in their written statement averred that the Income-tax Tribunal had set aside the assessment framed against the trust and had directed separate assessment of the trust and the trustees. The amount was recovered from the current account of the trust with the Central Bank of India, Sagar, on February 4, 1977, against the tax dues of the trust and/or its beneficiaries under section 226(3) of the Income Tax Act, 1961. All issues arising out of the pleadings had been examined and tried by the trial Court and the trial Court of appreciation of the evidence on record had come to the conclusion that the course adopted by the respondents was legal and had the necessary sanction of law. The issue of jurisdiction was neither raised nor decided by the trial Court and as such there was no occasion for the trial Court to the said issue. The preliminary objection about the jurisdiction of the Civil Court was for the first time raised before the High Court in the first appeal. The Single Judge dismissed the appeal on the ground that in view of section 293 of the Income-tax Act the Civil Court had no jurisdiction to entertain such a suit. On further appeal: Held, dismissing the appeal, that it was apparent from the record that…

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