Valid service of demand notice sustains Income-tax recovery despite objections on competency and limitation grounds

Recovery proceedings under the Income-tax Act were sustained where service of demand notices was proved by personal service and affixation after refusal or of effecting service. The objection that notices had to be served on all legal representatives failed because service on the assessee association was sufficient to initiate recovery. The challenge to the recovery certificates on the ground of defective issuance also failed, as the officer concerned was the competent assessing officer for the association. The limitation plea was rejected because the certificates were issued within the statutory period after demand.

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Issues: Whether the recovery certificate proceedings were invalid for want of service of notice of demand, for alleged defect in issuance by the competent assessing officer, and for alleged bar of limitation under the Income-tax Act.

Analysis: The challenge to recovery failed because the record showed service of demand notices for the relevant assessment years, including personal service and service by affixation where acceptance was refused or service could not be effected. The objection that notices ought to have been served on all legal representatives was rejected because the petitioner was herself a member of the association of persons and service on the assessee association was sufficient for initiation of recovery. The objection as to the authority issuing the certificates also failed since the officer concerned was the assessing officer for the association of persons, and therefore competent to forward the certificates. The plea of limitation was rejected because the certificates were issued within the statutory period after the demands were made.

Conclusion: The certificate proceedings were upheld and the petitioner's substantive challenge was rejected, though the Court directed a temporary hold on further proceedings in respect of the specified premises to enable a representation to be made and considered.

Final Conclusion: The recovery action was sustained in law, but limited interim protection was granted to the petitioner for a short period to pursue administrative redress before further coercive steps.

Ratio Decidendi: Recovery proceedings under the Income-tax Act cannot be impeached where valid service of demand notice is proved, the issuing officer is competent for the assessee entity, and the proceedings are commenced within the statutory limitation period.

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