Haradevi Bai vs The Collector of Kurnool and Others

Satyanarayana Raju, J.—This is a petition under Article 226 of the Constitution for the issue of a direction in the nature of a writ of mandamus to (1) the Collector of Kurnool, (2) The Special Deputy Tah-sildar, Kurnool and (3) The Income Tax Officer, Kurnool, restraining them from proceeding to attach or to bring to sale the petitioner''s properties for the realisation of the alleged Income Tax arrears of her husband, Pamandas Suganram, and in particular, from proceeding with the sale of House No. 43/50, Narasingaraopet, Kurnool.

For the recovery of arrears of Income Tax due from the petitioner''s husband, a certificate was issued by the Income Tax Officer, (the 3rd respondent herein) to the first respondent (the Collector of Kurnool) u/s 46(2) of the Indian Income Tax Act. Pursuant to the certificate issued, the Collector proceeded to attach the aforesaid house for the realisation of the arrears. It is common ground that this house was purchased in the name of the petitioner under a sale deed dated 28-7-1952. It is stated by the Income Tax Officer in his counter-affidavit that the sale was by a debtor of the petitioner''s husband for discharge of the debt due to him but that it was taken benami in the name of petitioner. It was contended on behalf of the respondents by their learned counsel Mr. C. Kondaiah that if the petitioner was aggrieved it was open to her to institute a suit for a declaration and seek her remedy in the ordinary Courts of law.

It is stated by the petitioner that during her temporary absence from Kurnool, a notice was affixed to the door of the house seeking to attach the house. The petitioner has not produced that notice before this Court and under the circumstances it is not possible to find under what provision of law the attachment was made.

It has been held by a Division Bench of the Madras High Court consisting of Rajamannar, C. J., and Panchapakesa Ayyar, J. in C. Dhanalakshmi Ammal Vs. Income Tax Officer, II Additional City Circle II, Kilpauk, Madras and Others, , that there is no provision in the Madras Revenue Recovery Act (2 of 1864) which enables the Collector to attach and sell property not registered in the defaulter''s name for arrears of revenue due from the defaulter. Under the proviso to Section 46(2) of the Income Tax Act, the Collector is empowered to exercise the powers, which under the C. P. C., a Civil Court has, for the purpose of recovery of an amount due under a decree. Under this provision, the Collector may attach the property ostensibly standing in the name of the person other than the defaulter on the assertion by the Income Tax department that the property really belongs to the defaulting assessee. If this course is taken by the Collector the ostensible owner will have the right to prefer a claim under Order 21, Rulr 58 C. P. C., and such a claim must be enquired into and disposed of by the Collector. Thereupon the unsuccessful party will have the right to file a suit.

In a counter-affidavit filed by the respondents, as early as December, 1958, it was clearly mentioned that the Collector was taking proceedings for the recovery of the amount due as arrears from the petitioner''s husband, under the provisions of the C. P. C. Whatever might have been the position anterior to the respondents filing this counter-affidavit in this Court, the petitioner at least knew from the said affidavit the exact position; and one would have expected the petitioner to file her claim before the Collector and to invite a decision thereon. But this the petitioner did not do, ostensibly on the ground that nothing need be done during the pendency of the writ petition in this Court. In the affidavit filed by the petitioner she herself stated that for her to file a suit in a competent Civil Court it would require giving two months notice u/s 80 C. P. C.

In view of the fact that the Collector is entitled under law to exercise the powers vested in him under the proviso to Section 46 (2) of the Income- tax Act, which would enable him to attach the property ostensibly standing in the name of the petitioner as property belonging to the defaulter, and he having exercised that power it is open to the petitioner, if she so chooses, to prefer a claim before the Collector which, if made will be dis posed of by him in accordance with law. Under the circumstances, this petition must be dismissed. But having regard to the fact that the petitioner has not chosen to file a claim petition after the lapse of a year after she was told about the nature of the proceeding taken by the Collector, I think the petitioner must pay the costs to the respondents. Advocate''s fee Rs. 100/-.