1986 (11) TMI 20

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.... been filed against the order in Application No. 2736 of 1978. The said application was filed by the plaintiff in C.S. No. 10 of 1977 for a declaration that the attachment effected by the Income-tax Officer as per his letter No. T.R. 6694 of 1971-72 and 492 of 1977-78 dated April 22, 1978, of the monies standing to the credit of the suit as invalid and not binding on the applicant. The appellant i....

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....and R. R. Pictures are in arrears of income-tax to the extent of Rs. 15,80,400 up the end of 1977. On certificate being received from the Department, the Tax Recovery Officer issued a notice to both Sri Vinayaka Pictures and R. R. Pictures under rule 2 of the Second Schedule to the Income-tax Act, 1961. It appears that some of the creditors of R.R. Pictures also made claims in respect of the proce....

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....tice under rule 2 of the Second Schedule to the Income-tax Act is dealt with under rule 16 of that Schedule. That rule provides that where a notice has been served on a defaulter under rule 2, the defaulter or his representative-in-interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him except with the permission of the Tax Recovery Officer, ....

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....able in court deposit, the Department can file an application for payment out. In the circumstances, therefore, neither the fact that the appellant had obtained a decree nor the fact that he had obtained an order of attachment as early as on April 24, 1977, would make any difference. It is also seen from the records that rule 2, notice was served on the defaulter assessee even before the suit was ....