TaxTMI 
TaxTMI 
2013 (12) TMI 421
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....3) of the Income Tax Act, 1961 (called the 'Act' for short). Subsequently, the petitioner was issued another notice by the Tax Recovery Officer dated 22.2.2011 asking the petitioner to appear at his office on 1.3.2011 at 11.00 A.M. The petitioner, upon receiving the said notice, filed his objection, vide his letter dated 26.4.2011. In the reply it was stated that the petitioner is unable to find out any reason as to why he has been called upon by the said notice. It was stated that the petitioner is an assessee at the Income Tax Office at Raipur (Chattisgarh). Subsequently, again a reply letter was sent on 9.5.2011 to the Chief Commissioner of Income Tax, Kanpur, stating that although the notice was replied but Ram Bhargava, Tax Recovery Officer, is harassing the petitioner and his family members. The letter/complaint, submitted by the petitioner, was forwarded to the Commissioner of Income Tax-II by the Chief Commissioner of Income Tax, Kanpur, for redressal of grievances. The Tax Recovery Officer again issued a notice calling upon the petitioner to appear on 1.6.2011 and an order for attachment was issued on 25.4.2011, which has been filed as Annexure '20' to the writ petit....
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....t of Rs. 5,50,000/-, which is due on her, should be recovered from the petitioner. Further, a letter dated 21.5.2008, alleged to have been signed by the petitioner, filed as Annexure 'CA-3' at page 22, reveals that an amount of Rs. 5,50,000/- has been received by Modi Enterprises. In the rejoinder affidavit the petitioner has vehemently denied the averments made in the counter affidavit that the petitioner was paid Rs. 5,50,000/- by Smt. Vaijanti Gupta. The allegations made in paragraph 11 of the counter affidavit has been replied specifically in paragraph 11 of the rejoinder affidavit, which is quoted as below : "11. That the contents of paragaraph no. 11 of the counter affidavit are denied as stated. It is specifically stated here that Smt. Vejenti Gupta was not assessee in default in view of the fact that in paragraph under reply also there is no disclosure to the effect that the recovery relating to the assessment of which year and further did not disclose that any notice under section 143(i)(i) is ever issued to Smt. Vejenti Gupta and thereafter any order was passed at any time even under section 156 of the Act and in the absence of such notice and the demand notice, all....
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....oney becoming due or being held or at or within the time specified in the notice not being before the money becomes due or is held so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount." Sri R.K. Upadhyay, learned counsel for the Department, submitted that in view of the fact that Smt. Vaijanti Gupta informed the Department that the amount of Rs. 5,50,000/- is due on the petitioner, which was paid by her to the petitioner, the Income Tax Department may recover the amount from the petitioner. The petitioner's categorical case in the writ petition is that he was never paid any amount of Rs. 5,50,000/- nor he holds any amount for the petitioner. From the materials, which have been brought on record, it is clear that the petitioner had denied his liability to pay the amount of Rs. 5,50,000/-, which is claimed as due to one Smt. Vaijanti Gupta. In the notice (Annexure '4' to the writ petition), which was issued on 22.2.2011, the following was mentioned : "Please refer to the above notice. Vide above notice you were required to deposit the sum of Rs. 550,000/- which....
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....ire any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay to the Assessing Officer or Tax Recovery Officer. The condition precedent for exercising power under Section 226(3)(1) of the Act is when money is due to a person on whom any money of assessee is due could be proceeded under Section 226(3)(i) of the Act. The word "due" as defined in Law Lexicon by P. Ramanatha Aiyar, 2nd Edition, is as follows : "Due. As a noun, an existing obligation; an indebtedness; a simple indebtedness without reference to the time of payment; a debt ascertained and fixed though payable in future; As an adjective, capable of being justly demanded; claimed as of right; owing and unpaid, remaining unpaid; payable; regular; formal; according to rule or form. (4 M.H.C. 385.) "Due' in an instalment bond means payable. (15 IC 231; Re European Life Assrce, Co. 39 LJ Ch 326.)" "The expression 'due' is defined by Webster to mean that which is owed; that which custom, statute or law requires to be paid and by worcester that which any one has a right to demand, claim or possess; that which can jus....
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....e-tax Officer is expressly authorized to enforce by the clause preceding the clause now under discussion. I am not disposed to agree. The provision, it seems to me, is intended to apply only to an admitted liability. Where a person admits by word or conduct that any money is due to the assessee or is held by him for or on account of the assessee, he becomes liable to pay it and may well be exposed to the penal provision which enables the Income-tax Officer to take further proceedings before the Collector on the footing that the notice issued has the same effect as an attachment by the Collector in exercise of his powers under the proviso to sub-section (2) of this section. If, for instance, after taking the notice, a person makes a payment to the assessee, and that can only be on the footing that he owed money to the assessee, and that can only be on the footing that he owed money to the assessee, then, to the extent of the sum so paid (up to the amount due from the assessee),the person would become liable personally to the Department and the penal provisions of the Act can be invoked and enforced against him for its recovery. Where, however, the person to whom the notice is sent d....