Subba Rao, J. -
(1.) THIS is an application for issuing a writ of mandamus directing the first respondent to forbear from proceeding with the sale or doing anything pursuant to the notice dated 4-10-1951.
(2.) THE first petitioner is the widow, and the other petitioners, are the sons of late Rangilal Jajodia, who died on 11th January 1946. Shankarlal Jajodia is the eldest brother of petitioners 2, 3 and 4. Prior to his death Rangilal Jajodia submitted returns for the assessment years 1941-42, 1942-43 and 1943-44 under the Incometax Act in respect of the business carried on by him at Madras. He also submitted returns under the Excess Profits Tax Act. He employed an auditor to discuss the matter with the Incometax Officer, and the enquiry was practically concluded, though the formal assessments were not made. After the death of Rangilal Jajodia the Incometax Officer altered the title for the assessment as "Estate of the late Sri Rangilal Jajodia, represented by Sri Shankarlal Jajodia, son of Rangilal Jajodia and Srimathi Aruna_ Devi, widow of Rangilal Jajodia and her children", and caused notice to that effect to be served at the business place, and Shankarlal Jajodia received the same.
THE assessments were made on 30-3-1946, 20-3-1947 and 20-3-1947 in regard to the assessment years 1941-42, 1942-43 and 1943-44 respectively. THE Incometax Officer forwarded certificates to the Collector specifying the amount of arrears due from the assessee on 25-3-1947, 20-3-1948 and 24-3-1948. In regard to the excess profits tax, assessment for the period ending 31-3-1942 was made on 28-2-1947, and a certificate was issued on 23-3-1948. THE Collector is now bringing to sale the petitioners' property under the Revenue Recovery Act for realising the arrears of tax. This application is filed for the aforesaid relief.
Learned Counsel for the petitioners raised before me three points: (1) The Incometax Officer did not comply with the provisions of Section 24-B(3) of the Incometax Act in making the aforesaid assessments, and therefore they were invalid. (2) The proceedings for the recovery of the arrears under the Act were commenced after the expiry of one year from the last day of the financial year in which the demand was made, and therefore the arrears could not be collected under the Madras Revenue Recovery Act; and (3) The Collector was bringing to sale 11 grounds out of 22 grounds cutting off a portion of the building in the middle, and he had no power under the Revenue Recovery Act to sell the property in that manner.
For appreciating the first point the relevant provisions of Section 24B may be read. Section 24-B(3) says :
"Where a person dies, without having furnished a return which he has been required to furnish under the provisions of Section 22, or having furnished a return which the Income-tax Officer has reason to believe to be incorrect or incomplete, the Incometax Officer may make an assessment of the total income of such person and determine the tax payable by him on the basis of such assessment, and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person had he survived, require from the executor, administrator, or other legal representative of the deceased person any accounts, documents or other evidence which he might under the provisions of Sections 22 and 23 have required from the deceased person."
Under this section if a person dies after having furnished a return, the Incometax Officer may make the assessment after requiring the legal representative of the deceased person to furnish the necessary accounts, documents or other evidence. It is said that the Incometax Officer did not accept the return, but made the assessment without issuing notice to the legal representative of the deceased Rangilal Jajodia, and that therefore the assessment was invalid. What actually happened in this case is mentioned in the counter affidavit filed by the second respondent. It is stated therein that the assessment was practically completed, and that there was nothing further to be done by the assessee, but the Incometax Officer altered the title for the assessment as "estate of the late Shri Rangilal Jajodia, represented by Shri Shankarial Jajodia, son of Rangilal Jajodia and Srimathi Arunadevi, widow of Rangilal Jajodia and her children" and caused notice to be served at the business place, and the eldest son who was in charge of the business received the same.
But it was argued that the late Rangilal Jajodia executed a Will whereunder all his properties were bequeathed to his widow and sons other than Shankarlal Jajodia, and that therefore the notice served upon Shankarlal Jajodia was not a valid notice. Except making that allegation, no effort has been made before me to establish that Rangilal Jajodia executed such a Will. In the absence of any proof that such a Will was executed by Rangilal Jajodia, I must assume for the purpose of this application that Shankarlal Jajodia is also one of the heirs along with his mother and brothers. The notice therefore served upon the eldest member of the family who was doing the business, and addressed to all the legal representatives at the business premises must be taken to be a sufficient notice on the legal representatives of the deceased. Anyhow, the legal representatives preferred an appeal against the order of the Incometax Officer, and this question would be considered in that appeal. Any observations I have made are not intended to be a final determination of the question of the validity of the assessments made. That question will necessarily be determined in the appeal by the appropriate tribunal.
The second point is based upon the provisions of Section 46 (7).
The material provisions of Section 46 are as follows:
"S. 46 (1) When an assessee is in default in making a payment of incpmetax, the Income-tax Officer may in his discretion direct that, in addition to the amount of the arrears, a sum not exceeding that amount shall be recovered from the assessee by way of penalty. (2) The Incometax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue.
(7) Save in accordance with the provisions of Sub-section (1) of Section 42, or of the proviso to Section 45, no proceedings for the recovery of any sum payable under this Act shall be commenced after the expiration of one year from the last day of the financial year in which any demand is made under this Act."
Learned counsel contends that the words "no proceedings for the recovery" in Section 46 (7) refer only to the proceedings taken by the Collector for the recovery of arrears under the Revenue Recovery Act, and therefore the proceedings having been commenced by him one year after the prescribed time are barred under that sub-section, whereas learned counsel for the Incometax Officer argues that the proceedings for the recovery of the sum commence from an earlier point of time when the Incometax Officer forwards a certificate under Section 46 (2), and he has forwarded certificates in the present case on 25-3-1947, 23-3-1948 and 24-3-1948, which dates are within the prescribed time. The question therefore is, what do "proceedings for the recovery" mean in Section 46 (7). The process of assessment involves three stages: (1) the factum of assessment, (2) demand of the amount assessed, and (3) proceedings to recover the amount if a default is made by the assessee. The Incometax Officer starts the proceedings to recover the arrears in the prescribed manner after the default is made.
The procedure prescribed for the recovery of the arrears is embodied in Section 46 of the Act. The proceedings for the recovery therefore start when the Incometax Officer forwards the certificate to the Collector. But the learned counsel for the petitioner argued with some force that the words used in Section 46 (2) brought about a distinction between the issuing of a certificate by the Incometax Officer and the starting of proceedings to recover from the assessee. He relied upon the words in Section 46 (2) "on receipt of such certificate, shall proceed to recover from such assessee the amount", and compared those words with the words in Section 46(7) "proceedings for the recovery of any sum payable under this Act", and contended that the said proceedings for recovery related to the stage when the Collector proceeded to recover the amount from the assessee. The word 'proceeding" relates to the "modes in which judicial transactions are conducted". In its general acceptance it connotes "a prescribed mode of action for carrying into effect a legal right" (See P. Ramanatha Aiyar's Law Lexicon).
The meaning of the word is wide enough to include the entire procedure prescribed by the Act for realising the amount. The fact that the Collector proceeds to recover the amount from the assessee is not inconsistent with the circumstance that the proceedings for recovery start earlier. I therefore hold that the issue by the Incometax Officer of a certificate is the first step of the proceedings for the recovery of the arrears. So construed, it follows that the proceedings were started within the time prescribed by Section 46 (7) of the Act.
There are no merits in the third point. The Collector is empowered to recover the arrears under the provisions of the Revenue Recovery Act. It has not been established that he has contravened any provisions of the Act in bringing the property to s_ale. If he is selling the property in inconvenient plots, it is for the petitioners to raise the necessary objections before him.
(3.) IN the result the application fails and is dismissed 'with costs. Advocate's fee Rs. 100.;