Court affirms Tax Recovery Officer's auction despite stay order, dismissing appeal due to procedural non-compliance.

The court upheld the Chief Commissioner's order in a case challenging the auction conducted by the Tax Recovery Officer despite a stay order. The petitioner's failure to follow procedural rules, including not setting aside the sale under Rules 60 and 61, and selling her interest in the property during the proceedings, led to the dismissal of the appeal under Rule 86. The court found the Chief Commissioner's decision legally sound, affirming the Ext.P22 order issued under the Income Tax Act.

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Issues:
1. Challenge against Ext.P22 order of the Chief Commissioner of Income Tax in an appeal filed under Rule 86 of the IInd Schedule to the Income Tax Act, 1961.
2. Propriety of Tax Recovery Officer in conducting auction despite a stay order.
3. Correctness of arrears amount for property sale.
4. Permissibility of challenge against sale confirmation without challenging the sale order.
5. Maintainability of appeal under Rule 86 after selling interest in the property.

Analysis:
1. The petitioner challenged Ext.P22 order, contending that the Chief Commissioner did not consider the propriety of the Tax Recovery Officer conducting the auction despite a stay order. The petitioner argued that the property sold for less than its worth and questioned the correctness of the arrears amount. Additionally, the petitioner raised the issue of challenging the sale confirmation without contesting the sale order, citing a decision of the Allahabad High Court.

2. The Chief Commissioner found against the petitioner on two grounds. Firstly, the petitioner did not follow Rules 60 and 61 for setting aside the sale, leading to automatic confirmation under Rule 63. The Chief Commissioner held that without complying with Rules 60 and 61, there was no basis for appealing the confirmation order under Rule 63. Secondly, the petitioner had sold her interest in the property during the proceedings, making it impermissible to continue the appeal under Rule 86.

3. The court noted the decision cited by the petitioner but emphasized the procedural requirements under the Second Schedule to the Income Tax Act. The statutory scheme mandates filing an application to set aside a sale under Rules 60 and 61 before challenging the confirmation order under Rule 63. Allowing challenges without following this procedure would disrupt the intended process. The court agreed with the Chief Commissioner's findings that the petitioner, having sold her interest, lost the right to challenge the Department's actions through an appeal under Rule 86.

4. Ultimately, the court upheld the Chief Commissioner's order as legally sound. The petitioner's failure to adhere to procedural rules and selling her interest in the property rendered the appeal under Rule 86 unsustainable. The court dismissed the writ petition, affirming the legality of Ext.P22 order issued by the Chief Commissioner of Income Tax.

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