Income-tax recovery against partners of an unregistered firm is impermissible when the certificate names only the firm.

Under the Income-tax Act, 1961, recovery proceedings are confined to the assessee named in the recovery certificate and to the modes authorised by the Second Schedule. A partner's personal property of an unregistered firm cannot be attached or sold where the certificate names only the firm, because the Act does not provide a recovery mechanism equivalent to Order XXI rule 50 CPC for proceeding against partners personally. The availability of an objection under rule 11 of the Second Schedule does not bar writ relief where the challenge goes to the very jurisdiction of the recovery action against the partners. The attachment against the partners was therefore unlawful.

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Issues: (i) Whether, in recovery proceedings under the Income-tax Act, 1961, the personal property of a partner of an unregistered firm can be attached and sold when the recovery certificate names only the firm as the assessee in default. (ii) Whether the availability of an objection under rule 11 of the Second Schedule bars relief in writ jurisdiction.

Issue (i): Whether, in recovery proceedings under the Income-tax Act, 1961, the personal property of a partner of an unregistered firm can be attached and sold when the recovery certificate names only the firm as the assessee in default.

Analysis: The scheme of the Act makes the certificate recovery machinery dependent on the assessee named in the certificate, and the Tax Recovery Officer is confined to the modes authorised by the Second Schedule. An unregistered firm is an assessable unit, but its partners are distinct assessable entities; the Act does not contain a provision comparable to Order XXI, rule 50 of the Code of Civil Procedure, 1908, enabling recovery from partners personally where only the firm is shown as the defaulter. The authorities relied upon for the Revenue arose under the Indian Income-tax Act, 1922, and were distinguished on that ground.

Conclusion: The partner's personal property could not be attached or sold under a certificate issued only against the unregistered firm; the finding is in favour of the assessee.

Issue (ii): Whether the availability of an objection under rule 11 of the Second Schedule bars relief in writ jurisdiction.

Analysis: Rule 11 permits inquiry into whether attached property is in the possession of the defaulter, but it does not authorise the Tax Recovery Officer to decide whether a partner of an unregistered firm is himself an assessee in default. Since the objection raised went to the very jurisdiction of the recovery proceedings against the partners, the existence of that remedy did not preclude writ relief.

Conclusion: The writ petition was maintainable and the alternative remedy objection failed; the finding is in favour of the assessee.

Final Conclusion: Recovery from the partners personally, on the basis of a certificate naming only the unregistered firm, was unlawful, and the attachment against the partners was set aside.

Ratio Decidendi: Under the Income-tax Act, 1961, recovery under a certificate can be pursued only against the assessee named in the certificate and within the limits of the Second Schedule, so the personal assets of a partner of an unregistered firm cannot be attached for the firm's tax arrears unless the statute expressly authorises such recovery.

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