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Issues: (i) Whether the Income-tax Officer could invoke section 226(4) concurrently with recovery proceedings under section 222 of the Income-tax Act, 1961; (ii) Whether the civil court, while dealing with an application under section 226(4), could examine objections as to service of demand notices, quantum of arrears, limitation, or the validity of recovery.
Issue (i): Whether the Income-tax Officer could invoke section 226(4) concurrently with recovery proceedings under section 222 of the Income-tax Act, 1961.
Analysis: Section 222 provides recovery through the Tax Recovery Officer after a certificate is issued, while section 226 authorises recovery by other modes as well. The two provisions operate in addition to each other, and the use of one does not bar resort to the other. The statutory scheme permits concurrent recovery steps, including application to a court in custody of money belonging to the assessee.
Conclusion: Yes. The Income-tax Officer was entitled to proceed under section 226(4) even though proceedings under section 222 had also been initiated.
Issue (ii): Whether the civil court, while dealing with an application under section 226(4), could examine objections as to service of demand notices, quantum of arrears, limitation, or the validity of recovery.
Analysis: Questions relating to execution, discharge, satisfaction, service of demand notices, quantum of arrears, and limitation in recovery matters are matters for the Tax Recovery Officer under the Second Schedule. The civil court, on an application under section 226(4), has no jurisdiction to conduct such factual or legal enquiry. The amount in deposit can be recovered by the Income-tax Officer when the statutory conditions for application under section 226(4) are satisfied. The partners were also jointly and severally liable for the firm's tax dues.
Conclusion: No. The civil court could not reject the application on those grounds, and the objections were not maintainable before it.
Final Conclusion: The impugned order was unsustainable, and the Income-tax Officer was entitled to recover the deposited amount towards the arrears of tax due from the assessee and the firm.
Ratio Decidendi: Recovery under section 226(4) is an independent statutory mode available to the Income-tax Officer, and objections relating to demand, arrears, limitation, or satisfaction of the certificate must be pursued before the Tax Recovery Officer rather than the civil court.
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