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TMI Blog1968 (9) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ew Act. The respondent, Sri M. Damodar Bhat, was in arrears in respect of income-tax and penalty levied on him in respect of three or four assessment years. The total amount shown as due in the notice was Rs. 74,086.02 and was made up as follows : Rs. 1. Tax for the assessment year 1960-61 7,056.15 2. Tax for the assessment year 1961-62 485.55 3. Balance of tax for the assessment year 1962-63 346.42 4. Penalty for assessment year 1962-63 1,890.00 5. Tax for the assessment year 19963-64 64,307.90 74,086 02 It is necessary at this stage to set out the relevant provisions of the Income-tax Act, 1961 (43 of 1961), and of the Income-tax Act, 1922 (11 of 1922), hereinafter referred to as the " old Act ". Section 156 of the new Act is to the following effect : Notice of demand.---When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the Income-tax Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. " Sections 220, 221 and 222 of the new Act provide : " 220. When tax payable and wheat assessee deemed in default.--(1) Any amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee the amount specified therein by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule-- (a) attachment and sale of the assessee's movable property ; (b) attachment and sale of the assessee's immovable property ; (c) arrest of the assessee and his detention in prison ; (d) appointing a receiver for the management of the assessee's movable and immovable properties. (2) The Income-tax Officer may issue a certificate under sub-section (1), notwithstanding that proceedings for recovery of the arrears by any other mode have been taken." Section 226 states as follows : " 226. Other modes of recovery.--(1) Notwithstanding the issue of a certificate to the Tax Recovery Officer under section 222, the Income-tax Officer may recover the tax by any one or more of the modes provided in this section ...... (3) (i) The Income-tax Officer may, at any time or from time to time, by notice in writing require 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 beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he repeald Act),-- . . . . (g) any proceeding for the imposition of a penalty in of any assessment for the year ending on the 31st or any earlier year, which is completed on or after the 1st day april 1962, may be initiated and any such penalty may be imposed under this act. (j) any sum payable by way of income-tax, super-tax interest penalty or otherwise under the repealed act may be recovered under this his Act, but without prejudice to any action already taken for the recovery of such sum under the repealed Act ........." Section 29 of the old Act reades : " When any tax, penalty or interest is due in consequence of any order passed under or in pursuance of this Act, the Income-tax Officer shall serve upon the assessee or other person liable to pay such tax, penalty or interest a notice of demand in the prescribed form specifying the sum so payable." Section 6 of the General Clauses Act (10 of 1897) states : " Effect of repeal.-- Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not-- (a) revive anything n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 220 to 234 of the new Act. In our opinion, the argument on behalf of the appellant is well-founded and must be accepted as correct. In the first place, it is necessary to notice that section 220(4) of the new Act mentions in what circumstances the assessee shall be deemed to be in default and section 222 provides that, when an assessee is in default or is deemed to be in default in making payment of tax, the Income-tax Officer may forward to the Tax Recovery Officer a certificate under his signature specifying the amount of arrears due from the assessee, and the Tax Recovery Officer, on receipt of such certificate, shall proceed to recover from the assessee the amount specified therein. by one or more of the modes mentioned in the section. Section 226, however, provides for other methods of recovery and there is no reference in section 226(3) to any default on the part of the assessee. Section 226(3) merely states that the Income-tax Officer may, " at any time or from time to time ", by notice in writing require 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be literally applied but only such of the sections will apply as are appropriate in the particular case and subject, if necessary, to suitable modifications. In other words, the procedure of the new Act will apply to the cases contemplated by section 297(2)(j) of the new Act mutatis mutandis. In this connection it is relevant to refer to the decision of this court in Kalawati Devi Harlalka v. Commissioner of Income-tax in which it was pointed out that section 6 of the General Clauses Act will not apply in respect of those matters where Parliament had clearly expressed its intention to the contrary by making detailed provisions for similar matters mentioned in that section. For these reasons we are of opinion that the Income-tax Officer had authority to issue the notices under section 156 and section 226(3) of the new Act with respect to the liability of the respondent under the old Act. The High Court was, therefore, in error in holding that the impugned notice was inoperative in regard to the amount of Rs. 485.55 for the assessment year 1961-62. As regards items 4 and 5 for the assessment years 1962-63 and 1963-64 the argument of the respondent is that the impugned notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot " due by the assessee " on April 23, 1965, when the notice under section 226(3) of the new Act was issued. We are accordingly of the opinion that Mr. Srinivasan is unable to make good his argument on this aspect of the case. It follows, therefore, that the impugned notice dated April 23, 1965, was validly issued as regards items 4 and 5, viz., penalty for the assessment year 1962-63, i.e., Rs. 1,890, and tax for the assessment year 1963-64, i.e., Rs. 64,307.90. We proceed to consider the next question arising in this appeal, viz., whether the High Court was right in taking the view that the Income-tax Officer did not properly exercise the statutory discretion in issuing the impugned notice with regard to the first item, viz., tax for the assessment year 1960-61 amounting to Rs. 7,056.15. It was argued on behalf of the respondent that there was an appeal pending with the Appellate Assistant Commissioner against the order of assessment and, therefore, it was incumbent upon the Income-tax Officer to exercise the statutory discretion properly under section 220(6) of the new Act in treating the assessee as being in default. The finding of the High Court is that the Income-tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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