Law:

Section:

Section 226 of the Income-tax Act, 1961 - Collection and recovery of tax - Other modes of recovery - Assessment year 1964-65 - Petitioner was taken into custody and certain amount in his possession seized and was deposited with Court - Petitioner admitted that amount in question belonged to his employer M and be handed over to him - ITO filed a petition before Magistrate praying that amount in question be ordered to be handed over to department towardsincome-tax assessment on M for year in question - Whether Court was entitled to comply with demand of ITO even without consent of M - Held, yes FACTS The petitioner was taken into custody by the, Railway Police, as he was in possession of currency notes of Rs. 1,70,000 and he could not satisfactorily account for the same. The said currency notes were sent to the court of the Sub-Magistrate. The case of the petitioner was that the amount was entrusted to him by his employer, M. The petitioner and his employer 'M' filed a joint petition before the Sub-Magistrate, for the return of the said amount to M in view of the fact that further action had been dropped by the Railway Police. ITO, filed a petition before the Sub-Magistrate, praying that the amount in deposit claimed by M may be ordered to be handed over to the department towards the income-tax assessment on M for the year 1964-65. M filed a memo before the Sub-Magistrate, agreeing to the withdrawal of said amount from the court by the ITO without prejudice to the rights of the partners of the firm. In dealing with a transfer application filed by the petitioner, the Sessions Judge, directed the Sub-Magistrate to act on the memo filed by M and to comply with the demand of the ITO. Accordingly, the Sub-Magistrate, had directed the sum lying in court deposit to be transferred to the account of the department in accordance with the provisions of section 226(4). On writ petition : HELD In the instant case the petitioner had admitted that the amount in question belonged to M and in fact he filed a petition for the amount being paid over to the said M. The said M had consented to the amount being transferred to the ITO. Even without his consent, the lower court was…

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