TMI Blog1970 (5) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ise the amounts of tax due from him. In the course of assessment proceedings the appellant made a statement before the said Income-tax Officer on January 13, 1965, in which he gave details of some of the cars which were sold by Shri Surinder Singh Kairon to his brother, Shri Gurinder Singh Kairon, through the appellant. In this statement the appellant admitted that he had sold a Chevrolet car, 1961 model, belonging to Shri Surinder Singh Kairon to Messrs. Jaggi Pammi Car Dealers of Bombay, for a sum of Rs. 73,000 out of which he received Rs. 16,001 in cash and three cars being Mercedes, Rover and Austin. In exchange for those three cars he had taken two De-Soto cars and one Ford Country Sedan car and all these three cars were lying with him in Green Hotel, Marine Drive, Bombay, for sale on behalf of Shri Surinder Singh Kairon. He, further stated that he had paid Rs. 8,000 to Shrimati Kusum Kumari, wife of Shri Surinder Singh Kairon, by a bank draft on the Central Bank of India Ltd., Chandigarh, and Rs. 16,000 were taken from him by S. Surjit Singh, a manager of Shri Surinder Singh Kairon. He also stated that he would be able to pay, the remaining amount after the sale of those cars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain enquiries against S. Surinder Singh Kairon. I have been telling you whatever I knew regarding his affairs considering it my duty towards the National Government. You once called me at Delhi through S. Surinder Singh Kairon when I was there on a private visit. You asked me to sign a piece of paper on which you had written something and I signed the paper thinking that it is again something regarding the income-tax enquiries against S. Surinder Singh Kairon. I am a man of poor means. How can I promise such a huge sum to be paid to the Government Treasury specially when I have nothing to pay to S. Surinder Singh Kairon. All this happened due to some misunderstanding on my part or on the part of the income-tax department. As I have nothing to pay to S. Surinder Singh Kairon, I humbly request you to kindly not to start any proceedings against me. " To this letter of the appellant, the Income-tax Officer sent a reply by letter dated September 15, 1965, giving his own version of what had happened on June 3, 1965. On September 16, 1965, the Tax Recovery Officer, Amritsar, issued an order of attachment of immovable property of the appellant and on October 11, 1965, he issued a notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery certificate to the Tax Recovery Officer in exercise of his powers under section 222 of the Act. Thereafter, on January 25, 1964, the Tax Recovery Officer contacted the garnishee for compliance with the tax recovery certificate but he asked for time to obtain the stay order from the Income-tax Officer. Instead of obtaining the stay order from the Income-tax Officer, the garnishee filed an affidavit before him denying his liability on March 18, 1964. This affidavit was not accepted by the Income-tax Officer and the learned judge held that the garnishee could not choose his own time for filing his affidavit denying his liability. He should have done so within a reasonable time of the receipt of the notice under section 226(3) of the Act and in any case before the Income-tax Officer issued the tax recovery certificate to the Tax Recovery Officer. It is to be noted that in the notice issued to the garnishee under section 226(3) of the Act, the Income-tax Officer had mentioned the amount alleged to be due from him to the assessee and fixed a time within which to pay the same to the Income-tax Officer. In those circumstances, a duty was cast on the garnishee to deny his liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 1965. It cannot be said in these circumstances that the denial of liability made by the appellant on October 27, 1965, was not in accordance with clause (vi) of sub-section (3) of section 226 of the Act. As no specified demand had been made from the appellant earlier, the occasion had not arisen for him to deny on oath the liability for the amount demanded from him. Section 226(3)(i) of the Act authorises the Income-tax Officer to issue a notice in writing to any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee, to pay to the Income-tax Officer either forthwith upon the money becoming due on being held or at or within the time specified in the notice so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount. From the language of this clause it is clear that in case any specific amount is alleged to be due from a person to an assessee, that amount should be mentioned and the garnishee should be given some time to make the payment. It can only then be said that the ga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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