Third-party recovery and partnership attachment require proof that the firm holds the assessee's money or assets.

A third party can be proceeded against under section 46(5A) of the Indian Income-tax Act, 1922 only if it holds money due to, or property belonging to, the assessee or accountable person. The provision allows objection where no such sum is due or held on the assessee's account, and Order XXI rule 49 of the Code of Civil Procedure likewise restricts attachment of partnership property. On the stated facts, the partnership firm was not shown to hold the deceased's estate or any money for the accountable persons, so the estate duty liability remained with those persons and not the firm. The demand notice and recovery steps against the firm were therefore unsustainable.

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Issues: Whether the partnership firm, in whose hands no estate of the deceased was shown to be available, could be treated as liable to satisfy the estate duty demand by resort to garnishee-like recovery proceedings and attachment of partnership property.

Analysis: The recovery machinery under section 46(5A) of the Indian Income-tax Act, 1922 permits notice only to a person from whom money is due or who holds money for or on account of the assessee. The provision also protects a recipient who objects that no sum is due to the assessee or that he does not hold any money on the assessee's account. Order XXI, rule 49 of the Code of Civil Procedure, 1908 similarly limits attachment of partnership property. On the facts, the firm was not shown to be holding the estate of the deceased or any money belonging to the accountable persons, and the estate duty liability remained that of the accountable persons of the deceased, not of the firm as such.

Conclusion: The demand notice and attempted recovery against the partnership firm were unsustainable, and the attachment of the firm's assets was not justified.

Ratio Decidendi: Recovery by notice to a third party under section 46(5A) of the Indian Income-tax Act, 1922 is permissible only when that person holds money or assets of the assessee, and partnership property cannot be attached for another's liability unless the statutory conditions are satisfied.

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