1987 (9) TMI 1

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....d a sum of Rs. 3,08,533.10 to the credit of the decree obtained by the decreeholders who are the petitioners before us. The Income-tax Officer filed an application on November 20, 1985, before that court under section 226(4) of the Income-tax Act, 1961, for adjustment of the aforesaid amount, namely, Rs. 3,08,533.10, against alleged income-tax dues of the decreeholders (appellants herein) amounting to Rs. 6,88,244. The decreeholders objected on the ground that no notice of demand as required under section 156 of the Income-tax Act had been served on them for this amount. On February 10, 1986, another application was filed by the Income-tax Officer disclosing the break-up of the said sum of Rs. 6,88,244. This petition shows that the alleged ....

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.... court to which a petition or application has been made under section 226(4) of the Income-tax Act had no jurisdiction to decide the questions of fact, such as absence of service of a notice of demand for arrears of tax. It was held by him that once an application was made by the Income-tax Officer under subsection (4) of section 226, no discretion was given to the civil court at all to make an investigation as to whether the assessment of tax was according to law or if the tax was in arrears or whether the notice of demand had been served or whether the recovery of tax was barred by a general or special law of limitation and that on such an application, the amount deposited in court to the credit of the assessee must be paid over to the In....