Certificate recovery proceedings cannot reopen assessment validity, while factual service of demand notice remains largely immune from supervisory interference.

In certificate recovery proceedings, the Tax Recovery Officer is bound by the assessment and certificate and cannot re-examine the correctness of the assessment or whether the Hindu undivided family was the proper assessee; such objections must be pursued in appropriate proceedings under the Act. Service of the demand notice on the family was upheld on the factual finding that it was received by an employee, and that finding was not interfered with in supervisory jurisdiction. Recovery could also proceed directly against the assessee named in the certificate, making the objection that only receivers could be proceeded against untenable. The recovery order was restored.

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Issues: (i) Whether, in certificate proceedings, the Tax Recovery Officer could question the correctness or validity of the assessment and the existence of the Hindu undivided family as the assessee; (ii) Whether service of the demand notice on the Hindu undivided family was valid; (iii) Whether recovery could be directed only against the receivers and not directly against the assessee.

Issue (i): Whether, in certificate proceedings, the Tax Recovery Officer could question the correctness or validity of the assessment and the existence of the Hindu undivided family as the assessee.

Analysis: Under section 222 of the Income-tax Act, 1961, the certificate proceeding is founded on the assessee shown in the certificate, and under section 224 the assessee cannot, before the Tax Recovery Officer, dispute the correctness or validity of the assessment. If the assessee contends that the Hindu undivided family was not the proper unit of assessment, that contention had to be pursued in appropriate proceedings under the Act. The Tax Recovery Officer was therefore bound by the certificate and was not required to investigate whether the Hindu undivided family existed at the relevant time.

Conclusion: The objection was not open in certificate proceedings and the Tax Recovery Officer was right in refusing to go behind the assessment and certificate.

Issue (ii): Whether service of the demand notice on the Hindu undivided family was valid.

Analysis: The Tax Recovery Officer found that the demand notice had been received by an employee of the Hindu undivided family and held that service was proper. That finding was treated as one of fact and did not affect the jurisdiction of the recovery authorities. In proceedings under article 227 of the Constitution of India, the Court declined to interfere with that factual finding.

Conclusion: Service of the demand notice was upheld as valid.

Issue (iii): Whether recovery could be directed only against the receivers and not directly against the assessee.

Analysis: The assessment and the certificate stood in the name of the Hindu undivided family, and the defaulter under the Second Schedule was the assessee named in the certificate. On that footing, the demand and recovery proceedings were properly taken against the assessee itself. The contention that only the receivers could be proceeded against was either not pressed or was otherwise untenable on the record and the statutory scheme.

Conclusion: The recovery proceedings against the assessee were valid and the objection failed.

Final Conclusion: The order of the Commissioner was unsustainable in law, and the recovery order passed by the Tax Recovery Officer was restored.

Ratio Decidendi: In certificate recovery proceedings, the Tax Recovery Officer must proceed on the basis of the assessee and certificate filed under the Act and cannot re-examine the validity of the assessment or the unit of assessment; factual findings as to service of demand notice will not ordinarily be interfered with in supervisory jurisdiction.

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