Clubbing of income does not void an earlier wife's property transfer; tax recovery attachment was unsustainable.

A property transferred to a wife long before the husband's tax arrears could not be attached and sold for his later default. The commentary explains that clubbing provisions under section 16(3) of the 1922 Act and section 64(1)(iv) of the 1961 Act may include the property's income in the husband's assessment, but they do not by themselves void the transfer. Recovery under section 222 is limited to the assessee's property, and section 281 voids only transfers made during or after proceedings with intent to defeat recovery, subject to statutory exceptions. Because the property stood in the wife's name since 1959 and a tax clearance certificate had been issued, the recovery action could not be sustained.

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Issues: Whether the Tax Recovery Officer could attach and sell property standing in the wife's name for the husband's tax dues when the transfer to the wife was made long before the relevant tax arrears and the sale had been completed after a tax clearance certificate.

Analysis: The statutory scheme under section 16(3) of the Indian Income-tax Act, 1922 and section 64(1)(iv) of the Income-tax Act, 1961 permits inclusion of the income of property transferred by a husband to his wife in the husband's assessment in specified circumstances, but the transfer itself does not become void merely because the income is clubbed. Section 222 of the Income-tax Act, 1961 enables attachment and sale of the assessee's immovable property in default, and the explanation thereto extends recovery in certain transferred-property situations only within the statutory limits. Section 281 of the Income-tax Act, 1961 voids transfers only where they are made during pendency of proceedings or thereafter, and where the transfer is intended to defeat tax recovery, subject to the stated exceptions. On the facts, the property had stood in the wife's name since 1959, whereas the claimed tax arrears related to later assessment years. The transfer was therefore not connected with evasion of the husband's tax liability. The prior tax clearance certificate and registered conveyance also negatived the revenue's ability to impeach the transfer at this stage.

Conclusion: The Tax Recovery Officer had no authority to proceed against the property and the attachment could not be sustained.

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