Income-tax recovery limits enforcement to the named defaulter; clubbed sale proceedings for another assessee's dues are void.

Income-tax recovery under section 222(1) and section 224(1) read with the Second Schedule is confined to the arrears covered by the certificate issued against the particular defaulter. The rules governing notice, proclamation, auction, confirmation and sale certificate do not authorise clubbing separate recovery certificates of different assessees or applying one assessee's property towards another's dues. A sale founded on such clubbing is not a mere procedural irregularity; it goes to the root of the authority to sell. The sale of the petitioner's property for the managing director's arrears was therefore without jurisdiction and invalid, and the confirmation of sale and sale deed could not stand.

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Issues: Whether immovable property belonging to an assessee could be sold under the Second Schedule to the Income-tax Act, 1961 for recovery of arrears due not only from that assessee but also from another assessee, and whether the sale proclamation, confirmation of sale, and sale deed were valid.

Analysis: Under section 222(1) and section 224(1) read with the Second Schedule, recovery proceedings are confined to the arrears specified in the certificate issued against the particular defaulter. The scheme of rules 2, 8, 53, 61, 63 and 65 contemplates notice, proclamation, auction, confirmation, and issuance of sale certificate only in respect of the amount recoverable from the defaulter whose property is being proceeded against. Clubbing separate recovery certificates relating to different assessees and issuing a single sale proclamation would permit the sale proceeds of one assessee's property to be applied towards another assessee's dues, which the statutory scheme does not authorise. The irregularity was not merely procedural but went to the root of the authority to sell.

Conclusion: The sale of the petitioner's property for recovery of the managing director's arrears was without jurisdiction and invalid.

Final Conclusion: The impugned sale proceedings, the confirmation of sale, and the sale deed could not stand, and relief was granted to the petitioners.

Ratio Decidendi: Property of one assessee cannot be sold under the income-tax recovery machinery for arrears due from another assessee, and a sale founded on such clubbing is void for want of jurisdiction.

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