TMI Blog1974 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... as wrongly mentioned in the sale proclamation. But, on July 22, 1972, he withdrew the objection-petition and stated " regarding correct arrears of tax the position may be reconciled with reference to the office records. Auction may go on without interruption ". Thereafter, the figure mentioned in the sale proclamation was corrected though no fresh sale proclamation was published. The sale was held on August 21, 1972. The property was sold for a sum of Rs. 1,27,000 subject to a mortgage for Rs. 30,000. The auction purchaser deposited the entire sale consideration on September 2, 1972. On September 16, 1972, the petitioner filed an application before the Tax Recovery Officer under rule 61 of the Second Schedule of the Income-tax Act with a request that it might also be treated as an application under rules 9 and 11 of the Schedule. If the application was one under rule 61 the application would have to be dismissed summarily for failure of the defaulter to deposit the amount recoverable from him in execution of the certificate. That was why the petitioner requested that the application might be treated as one under rule 9 also. Before the Tax Recovery Officer an objection was raised t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent sale. " With great respect to the learned judges, I find it extremely difficult to agree with them. It is true that any proceedings for the recovery of arrears of tax by sale of the defaulter's property must commence with the issuance of a certificate by the Income-tax Officer specifying the arrears of tax due from the assessee. But it does not follow that an error in the figure mentioned in the certificate is an error of jurisdiction vitiating the subsequent sale. Otherwise, a defaulter, who is aware of the error, may lie low till the sale is held and then seek to have the entire proceedings set at nought and the sale declared void. If an assessee is in arrears of tax, if the Income-tax Officer is competent to issue the certificate and if the Tax Recovery Officer is competent to proceed further to recover the arrears, it matters not that a wrong figure is mentioned in the certificate ; it does not affect jurisdiction. A question of jurisdiction may arise if the person named in the certificate as the defaulter is not in fact the defaulter or if no arrears of tax are due at all. I do not see why the mention of a wrong figure in the certificate should be treated as one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Officer, the Income-tax Officer shall have power to withdraw or correct any clerical or arithematical mistake in the certificate by sending an intimation to the Tax Recovery Officer. " Section 225(4) provides : " Where a certificate for the recovery of tax has been issued and subsequently the amount of the outstanding demand is reduced as a result of an appeal or other proceeding under this Act, the Income-tax Officer shall, when the order which was the subject-matter of such appeal or other proceeding has become final and conclusive, amend the certificate or withdraw it, as the case may be. " Orders withdrawing or cancelling a certificate or any correction made by an Income-tax Officer under section 224(2) or any amendment made under section 225(4) are required to be intimated to the Tax Recovery Officer by the Income-tax Officer under section 224(3). The effect of section 224(2), section 225(4) and section 224(3) is that it is no longer necessary, under the Income-tax Act, 1961, to issue a fresh notice of demand when the amount of tax is reduced in an appeal or when an error is discovered in the figure mentioned in the notice of demand or the certificate. In such cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstance that the defaulter himself by his letter dated July 22, 1972, waived his objection on the score that an incorrect amount is mentioned in the sale proclamation. The ground on which the defaulter sought to have the sale set aside, it has been seen, was that the sale proclamation mentioned a large amount as due from the defaulter though what was in fact due was a much smaller amount. Now, a sale can be set aside under rule 61 of the Second Schedule on the ground of material irregularity in publishing or conducting the sale provided certain conditions are fulfilled. An error relating to the amount due from the defaulter as mentioned in the sale proclamation is clearly an irregularity in publishing or conducting the sale. The application to set aside a sale on that ground must, therefore, be made under rule 61 only. According to the learned counsel for the petitioner an application could also be made under rule 9 which is as follows : " Except as otherwise expressly provided in this Act, every question arising between the Income-tax Officer and the defaulter or their representatives, relating to the execution, discharge or satisfaction of a certificate duly filed un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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