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Issues: (i) Whether amounts assessed and certified under the repealed Income-tax Act, 1922 could be recovered after the commencement of the Income-tax Act, 1961 from partners of an unregistered firm and members of an association of persons without fresh notices of demand or fresh certificates naming them individually; (ii) Whether section 297(2)(j) of the Income-tax Act, 1961 preserved and authorised recovery of such sums under the new recovery machinery in section 222 of the Income-tax Act, 1961.
Issue (i): Whether amounts assessed and certified under the repealed Income-tax Act, 1922 could be recovered after the commencement of the Income-tax Act, 1961 from partners of an unregistered firm and members of an association of persons without fresh notices of demand or fresh certificates naming them individually.
Analysis: The notices of demand issued to the unregistered firm and the association of persons under section 29 of the Income-tax Act, 1922 were treated as sufficient notices for the relevant constituents. The certificates forwarded under section 46(2) of the Income-tax Act, 1922 naming the firm or association as assessee were held to authorise recovery from the partners or members, because liability to pay had already attached under the proviso to section 46(2) before the new Act commenced. A further individual notice or a fresh certificate was not required merely because recovery was later pursued against the partners or members.
Conclusion: The petitioners were not entitled to insist on fresh individual notices of demand or fresh certificates; recovery against them could proceed on the basis of the existing notices and certificates.
Issue (ii): Whether section 297(2)(j) of the Income-tax Act, 1961 preserved and authorised recovery of such sums under the new recovery machinery in section 222 of the Income-tax Act, 1961.
Analysis: The saving clause in section 297(2)(j) was construed as permitting recovery of sums that had already become payable under the repealed Act, and as enabling use of the recovery modes provided by the new Act. The absence in section 222 of language corresponding to the proviso to section 46(2) did not defeat recovery where liability had already arisen under the repealed Act and the certificate had been forwarded before the new Act came into force. The construction urged by the petitioners was rejected as unduly technical and as making the saving provision nugatory.
Conclusion: Recovery under section 222, read with section 297(2)(j), was held permissible for sums that had become payable under the repealed Act.
Final Conclusion: The challenge to the recovery notices failed, and the writ petitions were dismissed because the amounts certified under the repealed Act remained recoverable under the new Act's machinery.
Ratio Decidendi: A saving clause that authorises recovery of sums already payable under a repealed taxing enactment permits enforcement through the recovery machinery of the successor Act, and does not require a fresh notice or fresh certificate where liability had already crystallised under the repealed Act.
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