Law:

Section:

Section 222 of the Income-tax Act, 1961 (Corresponding to section 46(2) of Indian Income-tax Act, 1961), read with sections 63 and 151 of Civil Procedure Code, 1908 - Collection and recovery of tax - Certificate proceedings - Judgment debtor had to pay considerable sum of arrears of income-tax dues - A recovery certificate in respect of said dues was sent by ITO under section 46(2) of 1922 Act to Collector who had attached a house property - Because of objections of widow of deceased-assessee, auction sale of house by collector remained stayed - In meantime house had been attached and sold in execution of decree in favour of Bank - After house was sold, ITO filed application under section 151 of Code of Civil Procedure claiming priority on behalf of Union of India - He claimed entire sum towards satisfaction of arrears of income-tax dues as due were in excess of amount realised by sale - Whether even though house had been sold under section 63 of Code of Civil Procedure, attachment made earlier by Collector would not cease to operate and would fasten itself to sale proceeds realised by sale of house - Held, yes - Whether, therefore, priority claimed by ITO was to be allowed - Held, yes FACTS The -debtors had to pay a considerable sum as arrears of income-tax dues. A recovery certificate in respect of arrears of income-tax dues had been a sent by the ITO under section 46(2) of 1922 Act to the Collector who had attached the house. Because of objections of widow of deceased-assessee the auction sale of the house by the Collector remained stayed. In the meantime, the house had been attached and sold in the execution of a decree in favour of the bank. After the house had been sold, the ITO filed an application under section 151 of the Code of Civil Procedure, claiming priority on behalf of the Union of India, he claimed the entire sum towards the satisfaction of the arrears of income-tax dues as the dues were in excess of the amount realised by the sale. The Civil Judge allowed the application of the ITO. On revision application. HELD An attachment had already been made of the house in the year 1955. That attachment was held to be valid right up to the High Court.…

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