1988 (2) TMI 5

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.... herein seeks a declaration that rules 16 and 51 of the Second Schedule to the Income-tax Act, 1961, are ultra vires article 19(1)(f) of the Constitution. The petitioner also seeks declaration that the attachment effected by the second respondent on November 17, 1976, should take effect only from the date of the attachment order and not from the date of service of notice under rule 2 of the Second....

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....was executed on May 22, 1974. It is said that it is a simple mortgage duly registered. Pursuant to the notice served on the defaulting assessee under rule 2, the Tax Recovery Officer attached the house of which the petitioner is the second mortgagee on November 17, 1976. The petitioner filed a claim petition before the Tax Recovery Officer which was rejected. Thereafter, a suit bearing No. 101 ....

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....violative of article 14 of the Constitution. Learned counsel invited our attention to section 281 of the Income-tax Act as it stood prior to amendments in 1975 and submitted that in letter and spirit, the position as it obtained prior to the amendment in 1975 of section 281 should prevail even for the purpose of recovery under the Second Schedule to the Income-tax Act. Learned counsel for the peti....

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....referred to by him sets out the position clearly. The fact that the transaction of mortgage was bona fide and was without notice of the pendency of the proceedings against the defaulting assessee does not affect the right of the Income-tax Department to treat the mortgage transaction as void under the rules for recovery contained in the Second Schedule. The following observations in the judgment o....