Law:

Section:

Section 226, read with Rules 11 and 55 of Schedule II of the Income-tax Act, 1961 - Collection and recovery of tax - Other modes of recovery - "B" defaulted in payment of income tax - Authorities attached a property allegedly belonging to B and issued proclamation for sale of that - Objector "D" objected to sale of that property - On said objections Additional Collector agreed to postpone sale - However Collector put property at auction and property was sold - Whether since sale was made much before expiry of 30 days from date of proclamation, procedure followed by authorities contravened rule 55 of second schedule - Held, yes - Whether, moreover, since Tahsildar had not been conferred with powers of TRO, he could not accept highest bid in auction - Held, yes - Whether in view of above irregularities auction sale held should not be allowed to stand - Held, yes FACTS On failure of defaulter "B" to pay tax, the income-tax authorities, proceeded to recover the arrears of income-tax, and attached a house on the footing that it belonged to the defaulter. "D" filed an objection to the effect that the property did not belong to the defaulter, but belonged to him. On receiving this objection, the Additional District Magistrate, passed an order postponing the sale. That order was, however, recalled by the Collector and directed the Tahsildar to proceed with the sale of the property attached. In accordance with that direction, the Tahsildar put the property to auction and the house was auctioned. On writ petition: HELD The property was sold on 9-9-1966, 11 days after the proclamation. Rule 55 of the Second Schedule lays down that no sale of immovable property under this Schedule shall, without the consent in writing of the defaulter, take place until after the expiration of at least 30 days from the date of the proclamation. In the instant case, sale was held much before the expiry of 30 days from the date of the proclamation. The procedure followed by the authorities contravened rule 55 of the Second Schedule. Sub-rule (1) of rule 11 lays down that if any objection is raised against the attachment, the Tax Recovery Officer shall proceed to investigate the objection.…

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