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TMI Blog1969 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... tered firm. In Writ Petitions Nos. 515 to 519 and 578 and 579 the petitioner was one of the members of an association of persons in respect of which there were assessments and imposition of penalties in respect of various assessment years commencing with the assessment year 1951-52 and ending with 1956-57. Notices of demand were issued to the association of persons under section 29 of the old Act and when there was default in payment, the Income-tax Officer forwarded certificates to the Collector under section 46(2) of the old Act in which the association of persons was named as the assessee. This association of persons came to an end on November 14, 1956. After the new Act came into force, the Tax Recovery Officer, functioning under the new Act, issued demand notices to the petitioners in W. P. No. 304/67 and the other seven petitions calling upon them to pay the arrears of tax named in the certificates forwarded to the Collector to which we have referred, and intimated them that, in the event of nonpayment, their properties would be brought to sale. We are asked by the petitioners to quash these notices and to forbid the Tax Recovery Officer from proceeding with the recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other. What again emerges equally clearly from the pronouncement of the Supreme Court is that the certificates forwarded to the Collector under section 46(2) of the old Act naming the unregistered firm as the assessee in the one case and the association of persons in the other, dispensed with the necessity of forwarding certificates naming the partners of the unregistered firm or the members of the association of persons as the persons from whom recovery should be made. So, in the cases before us, when the Income-tax Officer forwarded certificates under section 46(2) in the manner in which he prepared them, it became unnecessary, if nothing else could be said about it, for the Income-tax Officer to forward another set of certificates naming the partners of the unregistered firm or the members of the association of persons as persons from whom the amounts specified in the certificates should be recovered. But Mr. Srinivasan who did not dispute that the enunciation so made by the Supreme Court is equally applicable to the cases before us, however, maintained that, although that would be the position under the provisions of the old Act, a different situation arose in regard to reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant is shown as one of the partners. It is manifest that the provisions of Order XXI, rule 50(2), apply to the present case mutatis mutandis and since the appellant does not dispute that he was a partner of the unregistered firm for the relevant accounting year, the Collector could lawfully proceed to execute the certificate under section 46(2) of the Act against the appellant and recover the income-tax arrears from him. " Section 222 of the new Act, between the provisions of which and those of section 46(2) of the old Act a contrast was instituted by Mr. Srinivasan, reads : " 222. (1) When an assessee is in default or is deemed to be in default in making a 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 such assessee 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he association of persons in respect of which an assessment was also made under the old Act. That being so, and since the enunciation made by the Supreme Court with respect to an unregistered firm has equal application to an association of persons, as we have already observed, all the petitioners were liable to be proceeded against under the proviso to section 46(2) of the old Act for the recovery of the amounts specified in the certificates which named only the unregistered firm or the association of persons. They became so liable since the certificates had been forwarded to the Collector before the new Act commenced to operate. The Collector became invested with the power to recover those amounts from them and they became in turn liable to pay those amounts to the Collector. The power to make a recoverv from the petitioners would not reside in the Collector unless the petitioners had become liable to pay, and that that is so, is in our opinion, the implication of the proviso to section 46(2) of the old Act. So, at the stage when the new Act commenced to operate, the Collector had become invested with the power to make the recovery from the petitioners who, as a necessary corolla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other sum of money is payable under the repealing Act. And so, the suggested interpretation that section 297(2)(j) insists upon a new certificate under section 222 which can be issued only in respect of an assessee who is in default under the new Act, would make the recovery from a person who had become liable to make a payment under the old Act, impossible. We do not think that an interpretation which is productive of such consequence can be sound. We do not accept the contention that if we take the view that the petitioners in the cases before us are persons from whom amounts had already become payable under the repealed Act, that would necessitate the issue of fresh notices of demand to them under section 29 of the old Act, for the effect of the enunciation made by the Supreme Court in Sahu Rajeshwar Nath's case is that the words " other person liable to pay " occurring in the old Act have reference to a person who at the stage when the notice of demand has to issue has become liable to make the payment under a provision which the old Act incorporates, as explained by the Supreme Court. If the liability to make the payment springs from the provisions of section 46(2) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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