High Court Of Calcutta
Jaymac Lasetron (P) Ltd. & Anr. vs. CIT & Ors.
Section 281, Sch. II, r. 11
Asst. Years 1982-83, 1983-84, 1984-85
Ashim Kumar Banerjee & Tapan Mukherjee, JJ.
APO No. 427 of 2000 in Writ Petn. No. 977 of 2000
3rd August, 2006
Counsel Appeared
J.P. Khaitan, Bimal Chatterjee & B.P. Subha, for the Appellants: Dipak Kumar Shome, P.K. Bhowmick & Md. Nijamuddin, for the Respondents
JUDGMENT
Ashim Kumar Banerjee, J. :
Both these appeals involve a common question of law. However, the facts in both these appeals are singular in their respective characteristics. Applicability of s. 281 of the IT Act, 1961, as well as r. 11 of the Second Schedule was called in question in these two appeals.
Facts of the case : Jaymac
2. Jaymac India (P) Ltd. (hereinafter referred to as “Jaymac India”), had assessed dues on account of income-tax for the asst. yrs. 1982-83, 1983-84 and 1984-85. Jaymac India entered into an agreement for lease with Orient Beverages Ltd. on 11th floor of the premises No. 50, Chowringhee Road, Calcutta, against a premium of Rs. 9,49,680. Before the formal deed of lease could be executed in favour of Jaymac India by Orient Beverages Ltd., Jaymac India assigned its right in favour of Jaymac Lasetron (P) Ltd. (hereinafter referred to as “Jaymac Lasetron”) by an agreement dt. 20th Sept., 1984, in consideration of the like amount being Rs. 9,49,680. Jaymac Lasetron paid the premium to Jaymac India and Jaymac Lasetron was put into possession by Jaymac India. Jaymac Lasetron was accordingly assessed taking into account such leasehold right acquired under the agreement. On 29th March, 1990, reassessment proceedings for the asst. yrs. 1983-84 and 1984-85 were completed and the tax was imposed on Jaymac India. Admittedly, Jaymac India did not pay the tax levied on it for those three assessment years being 1982-83, 1983-84 and 198485. On 17th April, 1990, a formal deed of lease was executed by Orient Beverages in favour of Jaymac Lasetron by making Jaymac India a confirmed party. On 25th Aug.,1994, the ITO having jurisdiction to assess the tax of Jaymac Lasetron gave notice to furnish evidence of its ownership of the leasehold interest in the premises in question as according to the concerned officer it was a sham transaction and was made only to evade payment of tax outstanding on account of Jaymac India. On 13th Feb., 1996, the TRO issued prohibitory orders upon the tenants/licensees in respect of the premises in question from making any payment of the licence fee and/or service charges to Jaymac Lasetron for the purpose of recovery of tax due on account of Jaymac India. Objection petitions were filed by Jaymac Lasetron before the TRO. Since he was not taking any step on those objections petitions the CIT was approached by Jaymac Lasetron. The CIT heard Jaymac Lasetron and passed a comprehensive order rejecting the revisional application filed before the CIT upholding the prohibitory order issued by the TRO. The appeal filed by Jaymac Lasetron before the CIT against the prohibitory order was also dismissed by the CIT. The TRO also issued prohibitory orders in respect of the refund claimed by Jaymac Lasetron. Being aggrieved by the order of the TRO as well as the CIT the writ petition was filed by Jaymac Lasetron. The writ petition was dismissed by the learned single Judge [reported as Jaymac Lasetron (P) Ltd. vs. CIT (2000) 164 CTR (Cal) 366 : (2000) 245 ITR 734 (Cal)]. Hence this appeal. Munir Ahmed
3. One Sk. Barkatullah purchased premises being No. 40A and B, Circus Avenue, Kolkata, by a deed of conveyance dt. 30th March,1963. The said Sk. Barkatullah had three wives during his lifetime. By a registered deed of Hiba dt. 13th Jan., 1966, Sk. Barkutullah transferred a portion of the said premises in favour of his first wife. A similar registered deed of transfer was made by Sk. Barkatullah on 18th Jan., 1966, in favour of his second wife in respect of another portion and subsequently the remaining portion in favour of the third wife on 15th Feb., 1966. During the lifetime of Sk. Barkatullah this property was never included either in the WT or in the IT return of Sk. Barkatullah. On 1st July, 1974, the second wife made an oral gift (oral Hiba) of her portion in favour of Md. Tariq, the son of the other wife. However, such oral Hiba was confirmed by a registered deed of gift dt. 17th Sept., 1974, by Jainab Begam, the second wife in favour of the Md. Tariq. The premises were subsequently leased out to Syndicate Bank by Md. Tariq and other wives. Syndicate Bank was and is still a tenant of the premises in question. Sk. Barkatullah was a defaulter to the extent of Rs. 39,46,450 on account of income- tax. He was allowed by the said CIT to pay off the said sum by instalment. After payment of a few instalments Sk. Barkatullah approached the writ Court by expressing his inability to pay further instalments, offered his properties (not Circus Avenue, Kolkata) for sale so that the balance tax liabilities could be paid off. During this period the respective wives were assessed under the IT Act as well as under the WT Act wherein the Circus Avenue property was shown as their property. On 3rd June, 1988, Sk. Barkatullah died leaving three wives and fifteen children including Md. Tariq. After the death of Barkatullah, Khaleda Begam, the first wife made an oral Hiba in favour of Md. Tariq in respect of her share in the property in question. On 6th June, 1994, the TRO passed an order of attachment of the Circus Avenue property for payment of the outstanding tax dues in respect of the estate of Sk. Barkatullah and issued a notice of demand. On 16th March, 1994, by a deed of conveyance executed by Tariq the ownership in the property in question to the extent of his share was transferred to Munir Ahmed, appellant No. 1 herein. Further deed of conveyance was executed in favour of Nashir Ahmed, appellant No. 2 herein on 16th March, 1994, in respect of the remaining portion.
4. Being aggrieved by the order of attachment of rent payable by Syndicate Bank both Munir Ahmed and Nashir Ahmed filed objections before the TRO and prayed for release of the order of attachment. Representations were also made from time to time for lifting the order of attachment. The TRO, however, did not take any action on the said representations as well as objections which resulted in filing of the first writ petition in 1996. The learned single Judge passed an interim order restraining the Revenue from taking any step for sale of the premises in question as per the notice of proclamation of sale. However, the said writ petition was subsequently dismissed by an order dt. 24th April, 1997, passed by the learned single Judge. An appeal was preferred. The Division Bench directed the TRO to dispose of the objections before sale of the attached property by an order dt. 14th May, 1997.
5. In terms of the direction of the Division Bench the TRO issued notice to the parties to appear at the hearing. Upon hearing the concerned parties the TRO passed an order on 21st July, 1997, rejecting the objection petition filed by Munir Ahmed and Nashir Ahmed. The appeal was formally disposed of by the Division Bench by an order dt. 9th March, 2000 [reported as Munir Ahmed vs. Union of India (2000) 161 CTR (Cal) 465 : (2000) 243 ITR 267 (Cal)] by granting liberty to the appellants herein to file fresh writ petition challenging the order of the TRO. Hence, this writ petition.
6. The writ petition was finally heard by the learned single Judge wherein his Lordship by an order dt. 28th Nov., 2001 [reported as Munir Ahmed vs. Union of India (2002) 174 CTR (Cal) 483 : (2002) 256 ITR 492 (Cal)] dismissed the writ petition on the ground that alternative remedy was not availed of by the writ petitioners.
7. Being aggrieved by the order of dismissal of the writ petition the present appeal was filed. Relevant provisions of the statute
8. Sec. 281 and r. 11 of the Sch. II “281. (1) Where, during the pendency of any proceeding under this Act or after the completion thereof, but before the service of notice under r. 2 of the Second Schedule, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) of, any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding or otherwise : Provided that such charge or transfer shall not be void if it is made— (i) for adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or (ii) with the previous permission of the AO. (2) This section applies to cases where the amount of tax or other sum payable or likely to be payable exceeds five thousand rupees and the assets charged or transferred exceeds ten thousand rupees in value. Explanation.—In this section, ‘assets’ means land, building, machinery, plant, shares, securities and fixed deposits in banks, to the extent to which any of the assets aforesaid does not form part of the stock-in-trade of the business of the assessee.
11. Where any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the TRO shall proceed to investigate the claim or objection : (1) Provided that no such investigation shall be made where the TRO considers that the claim or objection was designedly or unnecessarily delayed. (2) Where the property to which the claim or objection applies has been advertised for sale, the TRO ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the TRO shall deem fit. (3) The claimant or objector must adduce evidence to show that— (a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or (b) (in the case of movable property) at the date of the attachment, he had some interest in, or was possessed of, the property in question. (4) Where, upon the said investigation, the TRO is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the TRO shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale. (5) Where the TRO is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the TRO shall disallow the claim. (6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a Civil Court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the TRO shall be conclusive.”
9. Analysis of the subject provisions on a plain reading (i) When a tax proceeding is pending or before a notice under r. 2 of the Sch. II is served under this Act the assessee is not entitled to create any encumbrance in respect of his assets. (ii) If such encumbrance is created that would be void as against the claim of the Revenue on account of recovery of tax payable by the assessee. (iii) However, such transfer would not be void if it is made for adequate consideration and without notice of any such tax proceedings. (iv) Assets include land and building. Law on the subject Jaymac :
10. The parties cited the following decisions : (i) Nawal Kishore Chowdhury & Anr. vs. ITO (1980) 122 ITR 576 (Cal); (ii) Gangadhar Vishwanath Ranade & Ors. vs. ITO (1989) 177 ITR 163 (Bom); (iii) George Thomas vs. TRO (1995) 214 ITR 168 (Mad); (iv) Srimati Preeti Rungta vs. ITO (1996) 130 CTR (Cal) 530 : (1995) 214 ITR 594 (Cal); (v) CIT vs. Podar Cement (P) Ltd. (1997) 141 CTR (SC) 67 : (1997) 226 ITR 625 (SC); (vi) TRO vs. Gangadhar Viswanath Ranade (Decd.) (1998) 149 CTR (SC) 90 : (1998) 234 ITR 188 (SC); (vii) Mysore Minerals Ltd. vs. CIT (1999) 156 CTR (SC) 1 : (1999) 239 ITR 775 (SC); (viii) ITO vs. Nawal Kishore Choudhury (2002) 174 CTR (Cal) 391 : (2002) 257 ITR 426 (Cal); (ix) CIT vs. Sri Meenakshi Mills Ltd. (1967) 63 ITR 609 (SC); and (x) LIC of India vs. Escorts Ltd. AIR 1986 SC 1370. Munir Ahmed
11. The parties cited the following decisions : (i) Estate of Late Rangalal Jajodia vs. CIT (1971) 79 ITR 505 (SC); (ii) R.K. Raghavan alias R.K. Selvaraj vs. Union of India (1983) 32 CTR (Mad) 248 : (1983) 140 ITR 894 (Mad); (iii) Chrompet Educational Society vs. TRO (1999) 240 ITR 788 (Mad); (iv) Institute of Chartered Financial Analysts of India vs. Asstt. CIT (2002) 178 CTR (AP) 238 : (2002) 256 ITR 115 (AP); (v) Custodian of Branches of Banco National Ultramarino vs. Nalini Bai Naique AIR 1989 SC 1589; and (vi) Mohan Wahi vs. CIT (2001) 167 CTR (SC) 86 : (2001) 248 ITR 799 (SC).
12. Law as decided (i) Estate of Late Rangalal Jajodia vs. CIT (supra) : Here the apex Court held that an assessment proceeding does not cease to be a proceeding under the Act merely by reason of want of notice. (ii) Nawal Kishore Chowdhury vs. ITO (supra) and ITO vs. Nawal Kishore Choudhury (supra) : The single Bench of this Court observed that the provision of s. 281 could not be attracted except for the recovery of the dues of the Revenue. While quashing the notice issued under s. 226(3) of the Act of 1961 his Lordship expressed great doubt as to whether s. 281 gave any procedural right or a substantial right to the Revenue. This judgment was upheld in appeal in ITO vs. Nawal Kishore Choudhury (supra). The Division Bench reiterated that the Revenue had a right to approach the appropriate forum for a declaration under s. 281. (iii) R.K. Raghavan alias R.K. Selvaraj vs. Union of India (supra) : In this case the question of priority of claim was gone into by the Madras High Court. The bank filed a suit for recovery under the mortgage created by the assessee whereas the TRO lodged a claim for payment of the outstanding tax liabilities. The Division Bench of the Madras High Court held that the contention of the mortgagee to the extent that the transaction was bona fide and without notice of pendency of tax proceeding against the assessee did not in any way affect the right of the Revenue to treat the transaction as void under the rules. (iv) Gangadhar Vishwanath Ranade vs. ITO (supra) : Sec. 281 of the said Act of 1961 and s. 53 of the Transfer of Property Act, 1882, are pari materia and the section is declaratory in nature. The provision was a mere prelude to the transfer for recovery of tax and the rights of the parties were not in any way affected. It was also observed that by introduction of s. 281 no power or jurisdiction was conferred conclusive upon the IT authorities. (v) George Thomas vs. TRO (supra) : The Division Bench decision of the Madras High Court held a notice issued under r. 11, inter alia, asking the objector to produce relevant documents pertaining to ownership of the subject property valid. (vi) Srimati Preeti Rungta vs. ITO (supra) :
The learned single Judge of this Court while deciding an identical issue observed that s. 281 did not contemplate any order to be passed thereunder without a properly instituted proceeding. (vii) CIT vs. Podar Cement (P) Ltd. (supra) : While interpreting the definition of “owner” in common law the apex Court observed that it means a person who has got valid title legally conveyed to him after complying with the requirement of law such as the Transfer of Properly Act, the Registration Act, etc. (viii) TRO vs. Gangadhar Viswanath Ranade (supra) :
Sec. 281 declares any transfer within the mischief period void as against the payment of revenue whereas r. 11 empowers the Recovery Officer to find out whether the property was in the possession of the assessee or any person claiming under him and the nature of the title and after being satisfied he is entitled to attach the property. He, however, cannot declare any transfer void, for that the Revenue would have to file a suit to have a declaration on that score if it is found that the assessee within the mischief period transferred the property to a third party. (ix) Mysore Minerals Ltd. vs. CIT (supra) : In this case the definition of “owner” given by the apex Court in the case of Podar Cement (supra) was applied. (x) Chrompet Educational Society vs. TRO (supra) : The TRO has to examine who is in possession of the property and in what capacity. He can only attach the property in the possession of the assessee in his own right or in the possession of a tenant or a third party claiming under him. If the attached property is claimed by a third party who adduces evidence to show that he was possessed of the property under some kind of title, the property would have to be released in terms of sub-r. (4). (xi) Institute of Chartered Financial Analysts of India vs. Asstt. CIT (supra) : The Division Bench of the Andhra Pradesh High Court held that availability of an alternative remedy is one of the considerations for which the High Court may refuse to exercise its jurisdiction under Art. 226. However, where the petitioner wants to enforce his fundamental right such principle would not apply. (xii) CIT vs. Sri Meenakshi Mills Ltd. (supra) : The Courts are entitled to lift the veil of corporate entity and to pay regard to the economic realities behind the legal facade. (xiii) LIC of India vs. Escorts Ltd. (supra) : Lifting of corporate veil would depend upon the relevant statutory provisions, the object sought to be achieved, the impugned conduct, the involvement of the element of public interest, the effect on parties who may be affected, etc. (xiv) Custodian of Branches of Banco National Ultramarino vs. Nalini Bai Naique (supra) : This decision of the apex Court defined the phrase “legal representative” under the CPC. While giving such interpretation the apex Court held that legal representative means a person who in law represents the estate of a deceased person and includes heirs of the said deceased person competent to inherit the property of the deceased. (xv) Mohan Wahi vs. CIT (supra) : A notice of demand on the assessee under s. 156 of the Act is mandatory before taking any step for recovery under the Sch. II. Non-service of a notice goes to the root of the validity of the subsequent proceeding for recovery. Our interpretation
13. On a combined reading of the aforesaid decisions and on a close study of ss. 159, 281 and r. 11 our understanding of law is as follows : (i) Sec. 281 is declaratory in nature and it does not give any power or authority to the Revenue to declare a transaction void. (ii) Rule 11 empowers the Recovery Officer to investigate into the rights and privileges of the parties in the property under attachment as also to dispose of objections raised therefor. Under sub-r. (4) when the Recovery Officer is satisfied that the claim or objection in respect of the attached property was not in the possession of the defaulter or that the property on the relevant date did not belong to the defaulter, he would release the property by lifting the order of attachment. Under sub-r. (5) when the Recovery Officer is satisfied that the property was in the possession of the defaulter as his own property and not on account of any other person or was in the possession of some other person claiming title under him, the Recovery Officer would disallow the claim. Under sub-r. (6) if a claim is disallowed or an objection is rejected the aggrieved party may institute a civil suit to establish his right in the property in dispute and the order of rejection passed by the TRO shall be conclusive subject to any order passed by the Civil Court. (iii) Hence, on a plain reading of s. 281 r/w r. 11 it would appear that the Recovery Officer is to examine who was in possession of the property and who was the legal owner of the property. In case he finds that within the mischief period the defaulter or any person claiming under him was in possession he would reject such claim or objection and in such event the aggrieved party would have to approach the Civil Court. On the other hand, if the Recovery Officer finds that the third party is having legal title in law and he is the owner of the property in question as defined by the apex Court in Podar Cement (supra), the Recovery Officer or the CIT, as the case may be, does not have power to declare such title void. Such transfer although legally made may be void as against the Revenue. In such case the Revenue would have to approach the Civil Court to have such declaration and sub-r. (6) does not have any role to play. (iv) If an assessee dies leaving tax liability his heir and legal representative would be liable to discharge such liability on behalf of the deceased to the extent of inheritance of the estate and for that purpose such legal heir and/or legal representative would be deemed assessee under s. 159 of the said Act of 1961. Application of law in the present scenario
Let us now apply the law in these two cases after analysis of the facts. On analysis of the facts in these two cases we find that although the same law is applicable in both these cases because of the peculiar facts and circumstances involved in the respective cases the result of application of the law would be different. In the instant case Jaymac India entered into the agreement of lease with Orient Beverage on Jaymac India 31st Jan., 1983. Before the original lease could be executed by Orient Beverage in favour of Jaymac India, Jaymac India assigned their right in favour of Jaymac Lasetron. In common law the usual procedure should have been a lease by Orient in favour of Jaymac India and then Jaymac India in turn would execute proper documents in favour of Jaymac Lasetron. This procedure was not followed and Jaymac India by-passed one stair and caused the deed of lease executed directly by Orient in favour of Jaymac Lasetron through a document where Jaymac India became a confirming party and this document was executed admittedly within the mischief period. It was sought to be contended before us that when this agreement was entered into, the assessments for the years 1983-84 and 1984-85 were incomplete and as such the order of attachment was not valid for payment of tax by Jaymac India in respect of the subsequent two assessment years. This question, in our view, may not be strictly relevant in view of the legal position. Admittedly Jaymac Lasetron was the legal owner on the relevant date by virtue of the deed of lease executed by Orient Beverages in their favour. Jaymac India knew that they were defaulters under the said Act of 1961. Hence, they by-passed the first stair possibly to avoid clearance under s. 230A. In any event once Jaymac Lasetron was found to be the legal owner of the property on the relevant date the order of attachment could not have been continued when the Recovery Officer or the CIT, as the case may be, was shown the deed of lease. The transaction was, however, void under s. 281 as we prima facie find. However, a declaration from a competent Civil Court is necessary to that effect.
16. Now the question comes, who would approach the Civil Court. Under sub-r. (6) when a claim of a third party is rejected by the TRO such third party would have to approach the Civil Court. In the instant case Jaymac Lasetron is a third party. Their claim was rejected by the TRO. Hence, they should approach the Civil Court as contended by the Revenue. We are unable to accept such interpretation. In our view, sub-r. (6) would have no application in the instant case as the Recovery Officer was bound to release the property from attachment under sub-r. (4). The Recovery Officer in the instant case did not take any step. Hence, the CIT was approached with a revisional application. The CIT by his reasoned order rejected such application for revision. Whether such revisional application was maintainable or not we do not wish to comment on that. We are of the view that the Recovery Officer in this case did not have any other option but to release the property under sub-r. (4) and then to file a suit for having the transfer nullified by a decree of a competent Civil Court. Munir Ahmed
17. In the instant case the TRO pursuant to the interim order passed by the Division Bench heard the objections and ultimately rejected the same upholding the order of attachment. It was sought to be contended before us by the Revenue that such hearing was not under r. 11 but under an order of the Court. We are unable to accept such contention. The TRO was bound to dispose of the objection raised before him. He did not do so. The assessee approached the writ Court. The learned single Judge dismissed the writ petition. Appeal was preferred. The Division Bench as and by way of an interim order directed the TRO to dispose of the objection pending before him. Hence, such hearing and the order passed therein were under r. 11 and the contention of the Revenue on that score is rejected.
18. On a perusal of the argument of the Revenue in the case of Munir Ahmed and on a perusal of the sequence of events and order of rejection impugned herein it appears to us that according to the Revenue the owners of the premises in question at the relevant period were heirs and legal representatives of Barkatullah. Hence, under s. 159 they were bound to discharge the liability on behalf of the deceased assessee. From the order impugned in the writ petition appearing at pp. 339-344 of the paper book it appears to us that Md. Tariq being the owner of two- third portion of the property in question filed objection questioning the validity of the attachment on 2nd June, 1994, whereas Md. Tariq sold his portion to Ahmeds on 16th March, 1994. It was contended before the TRO that the property never belonged to the estate of Sk. Barkatullah on the relevant dates as the property was transferred by Barkatullah during his lifetime. The officer while rejecting the contention of the objectors observed that as per s. 159 the legal representative was liable to discharge the liabilities of the deceased as he was the deemed assessee in place of the deceased assessee under s. 159. The officer relied on the decision of this Court in Nawal Kishore Chowdhury (supra) and observed that since he was not competent to decide the question of title and he was only to find out who was in possession the objection raised by Md. Tariq was rejected.
19. Sec. 159 obligates the heirs and legal representatives of the deceased assessee to discharge liability on behalf of the deceased to the extent of inheritance. In the instant case the Recovery Officer found that Md. Tariq was in possession on 7th Jan., 1994 when the order of attachment was levied. The officer also found that Md. Tariq was the heir and legal representative of the deceased, Barkatullah. Hence, he rejected the objection filed by Barkatullah. He, however, did not assign any reason why the objections of Ahmeds were rejected.
20. Admittedly the property did not belong to Barkatullah on the date of assessment. Hence, the transfer by Sk. Barkatullah prior to assessment was not void under s. 281 unless it is proved that the transfers made by Sk. Barkatullah in favour of his wives of the concerned property or any part thereof were done within the mischief period. For that a declaration from the Civil Court is necessary.
21. With regard to the attachment of property in the possession of Md. Tariq, before issue of such order of attachment the officer was to satisfy himself not only to the extent that Md. Tariq was in possession but also his inheritance of that property from Sk. Barkatullah within the mischief period. Without such satisfaction being had he was not entitled to continue the order of attachment and he was bound to release it under r. 11(4).
22. Now comes the question of objection raised by Ahmeds. Assuming Md. Tariq did inherit the property from Sk. Barkatullah, his transfer in favour of Ahmeds even despite notice of attachment could not be ignored as it was done by a registered deed of conveyance and in such circumstances the Revenue would have to approach the Civil Court for nullifying such transfer by filing a declaratory suit. Rule 11(6) would have no application in such case.
23. We do not find any attempt on the part of the Recovery Officer to discuss in detail and to come to a finding as to how the attachment could be continued and the objection filed by Md. Tariq as well as Ahmeds could be rejected. Mere reference to s. 159, in our view, was not enough. A reasoned decision on that score binding Md. Tariq as a legal heir under s. 159 is conspicuously absent in the order of the TRO impugned in the writ petition.
24. We, however, feel that the learned single Judge in the case of Ahmeds should not have dismissed the writ petition on the ground of alternative remedy at the final hearing of the writ petition inasmuch as the writ petition was entertained at the initial stage and interim order was passed therein. Conclusion
25. Although we find in both the cases the orders of the TRO and the CIT, as the case may be, impugned in the writ petitions are liable to be set aside, the consequences of such would be different in these two cases for the reasons discussed above. Result
26. Appeal No. 427 of 2000 succeeds and is allowed. The order of the learned single Judge is quashed and set aside. The writ petition being No. 977 of 2000 is allowed. The order of the CIT dt. 7th Sept., 1999, appearing at pp. 138-144 of the paper book is quashed and set aside. The order of attachment issued on 13th Feb., 1996, would, however, continue for a period of three months or subject to further order of the Civil Court to be passed in a civil suit to be filed by the Revenue challenging the transfer, whichever period is earlier. Appeal No. 378 of 2001 succeeds and is allowed. The order of the learned single Judge dt. 28th Nov., 2001, is quashed and set aside. The order of the TRO dt. 21st July, 1997, appearing at pp. 338-344 of the paper book is quashed and set aside. The order of attachment would, however, continue for a period of six months from date. The matter is remanded back to the TRO who is directed to dispose of the objection filed by Md. Tariq as well as Ahmeds, the appellants herein, in the light of the observations made by us in this judgment within the said period. Both the appeals are disposed of accordingly without any order as to costs.
Tapan Mukherjee, J. :
I agree.
[Citation : 286 ITR 453]
