1975 (9) TMI 2 - SC - Income Tax

Supreme Court Upholds Kerala High Court Rulings on Jurisdiction and Recovery Proceedings

Isha Beevi And Other Versus Tax Recovery Officer And Others

Isha Beevi And Other Versus Tax Recovery Officer And Others - [1975] 101 ITR 449 (SC), (1976) 1 SCC 70 Issues Involved:1. Jurisdiction of the Tax Recovery Officer.2. Validity of tax recovery proceedings under different Income-tax Acts.3. Validity of certificates issued after the death of the assessee.4. Title to properties claimed by appellants.5. Alternative remedies and procedural aspects.Detailed Analysis:Jurisdiction of the Tax Recovery Officer:The appellants questioned the jurisdiction of the Tax Recovery Officer, arguing that the officer lacked authority to proceed with the recovery against their properties. The Kerala High Court held that the Recovery Officer had the authority to proceed under the Travancore Act by recourse to the Travancore-Cochin Revenue Recovery Act, 1951. The court emphasized that the mere reference to a wrong section for authority does not vitiate the action if the power to proceed exists under another provision. The Supreme Court upheld this view, stating that the power to proceed under another provision suffices to validate the action.Validity of Tax Recovery Proceedings:The appellants contended that the taxes due under the Travancore Act and the 1922 Act could not be recovered under the 1961 Act. The Kerala High Court ruled that the income-tax dues covered by a settlement were recoverable under the 1961 Act. The Supreme Court agreed, noting that the machinery to realize dues under section 297(2)(j) of the 1961 Act was available. The court also noted that the appellants had not objected to the validity of certificates when notices were served, thus barring them from raising such objections in writ petitions.Validity of Certificates Issued After Death:The appellants argued that certificates issued after the death of T. K. Musaliar were invalid. The Division Bench of the Kerala High Court sided with the appellants, holding that claims enforced under the attachment order would not include arrears mentioned in certificates issued posthumously. The Supreme Court upheld this view, emphasizing that the appellants could file objections under rule 11 of the Second Schedule of the 1961 Act.Title to Properties:The appellants claimed title to properties allegedly gifted by the deceased. The Kerala High Court pointed out that the appellants had alternative remedies by way of suits and had not availed themselves of objections under the Second Schedule of the 1961 Act. The Supreme Court observed that the appellants could still raise objections before the Tax Recovery Officer.Alternative Remedies and Procedural Aspects:The Supreme Court noted that the reliefs claimed in the writ petitions were premature as the notices were only preliminary under rule 48 of the Second Schedule of the 1961 Act. The court emphasized that a writ of prohibition requires demonstrating a total absence of jurisdiction, which was not the case here. The court also noted that the appellants had not raised objections regarding the appointment of the Additional Personal Assistant to the Collector as the Tax Recovery Officer at any earlier stage.The Supreme Court dismissed the appeals, stating that the appellants could still object to the Tax Recovery Officer's jurisdiction and the validity of the certificates before the officer himself. The court also noted the department's concession to apply the procedure under the Travancore Act for recovery, thus addressing concerns about procedural disadvantages.Conclusion:The appeals were dismissed, with the Supreme Court upholding the Kerala High Court's rulings on jurisdiction, validity of recovery proceedings, and the applicability of the Travancore Act's procedures. The parties were directed to bear their own costs.