Service of demand notices disputed late, but recovery proceedings were upheld because the denial lacked credibility.

A belated and self-serving denial of service of income-tax demand notices will not invalidate recovery proceedings merely because the Department cannot produce the original records. The Court found the plea of non-service not credible in light of the petitioners' conduct, the long delay in raising the objection, and the failure to challenge recovery at the earliest stage after steps had already begun. An uncontroverted affidavit was not enough to displace surrounding circumstances showing the assertion was an afterthought. The challenge failed, and the recovery proceedings were upheld as valid.

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Issues: Whether the recovery proceedings for income-tax arrears were illegal for want of service of notices of demand before recovery was initiated.

Analysis: The challenge was confined to the alleged non-service of notices of demand. Although the Department could not produce the relevant records, the surrounding circumstances, including the petitioners' conduct, the long delay in raising the objection, and the failure to object at the earliest stage when recovery steps had already commenced, showed that the plea of non-service was not credible. The Court held that an uncontroverted affidavit does not, by itself, require acceptance where the surrounding facts indicate that the assertion is a self-serving afterthought.

Conclusion: The plea of non-service of notices of demand was rejected, and the recovery proceedings were held to be valid and not vitiated.

Final Conclusion: The writ petition failed because no illegality was established in the recovery proceedings or in the Commissioner's order.

Ratio Decidendi: A belated and self-serving denial of service of demand notices, unsupported by credible circumstances, will not invalidate income-tax recovery proceedings merely because the Department is unable to produce the original records.

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