TMI Blog2001 (4) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The plaintiff is the appellant herein, who filed the suit to set aside the summary order dated December 16, 1988, in O. P. No. 165 of 1980-81 passed by the first defendant/Tax Recovery Officer, Visakapatnam, holding that the plaintiff is a resident of Vizianagaram and is an assessee during the year 1970-71 vide file No.710 on the file of the Tax Recovery Officer. The Income-tax Officer issued a certificate under section 222 of the Act against the plaintiff to realise the arrears of tax. The said tax was due from the benami business made by the first plaintiff in the name of N.H. Rao and Company and he disclosed the said benami business on January 19, 1966, which was accepted by the Income-tax Department and accordingly a revised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Thereafter, the Commissioner of Income-tax Department, Visakapatnam, deputed one G. Narsimha Murthy, the then Income-tax Officer, Ward-B, Visakapatnam, to go to Calcutta and directed the plaintiff to depute one person to assist him in verifying the correctness of the plaintiff's claim of the payments made by his benamidars. Accordingly, one Subba Raju, accompanied the Income-tax Officer to Calcutta. After verification, the Income-tax Officer prepared notes of payment of benamidars through various banks and amounts lying with the third parties and obtained necessary information from the office concerned and sent a letter dated January 12, 1981, to the plaintiff giving credit of Rs.74,866. Again, the plaintiff on March 3, 1981, requested t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the contentions of the plaintiff and he was ordered to pay Rs.4,24,883 before March 31, 1984. Aggrieved by the above order, the plaintiff filed a suit 0. S. No. 268 of 1984 on the file of Sub-Court, Visakapatnam, On considering the matter, the Sub-judge, Visakapatnam, set aside the impugned order holding that the same was not based on legal principles and remanded the matter to the first defendant directing the authority to dispose of the matter in accordance with law. Against the said order, no appeal was filed by the defendants, and the defendants kept the matter pending without any reason and surprisingly, without issuing any notice, took up the matter on August 12, 1987, and passed the orders on January 21, 1988. Thus, it is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on February 8, 1989, with an intention to sell the property before the present suit is filed. Thus, it is prayed to set aside the impugned order. The first defendant filed a written statement denying the material averments and contended that N. Ch. R. Rao and Co. was a partnership company and that the plaintiff claimed the other partners as benamidars and assessed for the period 1958-59 to 1970-71 and as the arrears were outstanding several reminders were issued and that the plaintiff did not turn up, a certificate under section 222 of the Income-tax Act was issued for realisation of the arrears, that in spite of the same, the arrears were not recovered and the property of the plaintiff was attached, in pursuance of the certificates sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the defaulter and the Tax Recovery Officer and the plaintiff is not entitled to the protection and without giving a specific finding about the fraud and by considering the decisions in Munshi Ram v. Municipal Committee, AIR 1979 SC 1250 ; CIT v. Parmeshwari Devi Sultania [1998] 230 ITR 745 (SC) and C. A. Abraham v. ITO [1961] 41 ITR 425 (SC), dismissed the suit holding that the provisions of the Act provide machinery for redressal of the grievances and that under rule 86 the remedy is provided to the Chief Commissioner or Commissioner of Income-tax, and that the plaintiffs herein did not exhaust the remedies available under the statute. Learned counsel for the appellant, Mr. D. Ramalinga Swamy, vehemently contended that the entire app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occasion the civil court had entertained the suit in 0. S. No. 268 of 1984 and set aside the order of the Tax Recovery Officer and remitted the matter back to him for fresh consideration. After such remand and after comprehensive enquiry, the Tax Recovery Officer, Visakhapatnam, had determined the amount payable by the appellant as Es. 5,44,510.02. While, determining the same, every aspect was gone into, both projected by the appellant and also the representative of the Income-tax Department. In that context, the lower court has held that there is nothing shown to conclude that the Tax Recovery Officer did not act in good faith and that in fact, it is protected by section 293 of the Income-tax Act. The fraud is a pure question of fact and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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