Court upholds auction of house in recovery proceedings, finding notices valid and partners aware of proceedings.

The court dismissed the petition, ruling that the recovery proceedings through auction of the house were valid as notices and assessment orders were served on the receiver, who was authorized to handle the firm's affairs. The court found the petitioner and co-partners were aware of the assessment proceedings and house attachment since 1969 but did not challenge the assessment orders promptly. It held that the receiver was legally competent to receive the notices and orders, denying the relief sought and dismissing the petition without costs.

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Issues Involved:
1. Quashing of ex parte assessment orders for the assessment years 1963-64, 1964-65, and 1965-66.
2. Quashing of the proclamation dated March 24, 1987, for auctioning house No. 74/110, Dhan Kutti, Kanpur.
3. Validity of recovery proceedings based on ex parte assessment orders.
4. Service of notices under section 143(2) of the Income-tax Act, 1961, and assessment orders on the partners of the firm, Badshah Pasand Karyalaya.
5. The legal competence of the receiver to receive notices and assessment orders for the firm.

Issue-wise Detailed Analysis:

1. Quashing of ex parte assessment orders for the assessment years 1963-64, 1964-65, and 1965-66:
The petitioner requested the court to quash the ex parte assessment orders made by respondent No. 2 for the assessment years 1963-64, 1964-65, and 1965-66, arguing that the notices under section 143(2) of the Income-tax Act, 1961, and the assessment orders and demand notices were not served on the partners of the firm, Badshah Pasand Karyalaya. The court found that the notices and assessment orders were duly served on the receiver, who was legally competent to receive them. The petitioner's contention that the receiver had no concern with the business of the firm constituted under the deed dated October 11, 1962, was not accepted as there was no material on record to support this claim.

2. Quashing of the proclamation dated March 24, 1987, for auctioning house No. 74/110, Dhan Kutti, Kanpur:
The petitioner sought to quash the proclamation for auctioning the house, arguing that the recovery proceedings were null and void as the assessment orders were not served on the partners. The court found that the recovery proceedings by way of auction of the house were valid as the notices and assessment orders were served on the receiver, who was authorized to conduct the business and other activities of the firm. The court also noted that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969.

3. Validity of recovery proceedings based on ex parte assessment orders:
The petitioner argued that the recovery proceedings based on the ex parte assessment orders were invalid as the notices and assessment orders were not served on the partners. The court found that the recovery proceedings were valid as the notices and assessment orders were served on the receiver, who was legally competent to receive them. The court also noted that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969 and failed to take timely action to challenge the assessment orders.

4. Service of notices under section 143(2) of the Income-tax Act, 1961, and assessment orders on the partners of the firm, Badshah Pasand Karyalaya:
The petitioner contended that the notices under section 143(2) of the Income-tax Act, 1961, and the assessment orders and demand notices were not served on the partners of the firm. The court found that the notices and assessment orders were duly served on the receiver, who was legally competent to receive them. The court also noted that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969.

5. The legal competence of the receiver to receive notices and assessment orders for the firm:
The petitioner argued that the receiver appointed in May 1966 was not legally competent to receive the notices and assessment orders for the assessment years 1963-64 to 1965-66. The court found that the receiver was authorized to conduct the business and other activities of the firm, Badshah Pasand Karyalaya, and was legally competent to receive the notices and assessment orders. The court also noted that the receiver made an application under section 146 of the Income-tax Act, 1961, to set aside the ex parte assessment orders, indicating that he was interested in the partners of the firm.

Conclusion:
The court dismissed the petition, finding that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969 and failed to take timely action to challenge the assessment orders. The court held that the recovery proceedings by way of auction of the house were valid and that the receiver was legally competent to receive the notices and assessment orders. The court declined to grant the relief sought by the petitioner and dismissed the petition with no order as to costs.

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