P.N.Mookerjee, J. -
(1.) This Rule raises a short question. The opposite party became liable to payment of Income Tax under the Indian Income Tax-Act, 1922. For recovery of the same, proceedings were started under the Public Demands Recovery Act, as authorised by law. In the said proceedings, the opposite party was permitted to make payment of the dues under the certificate by instalments. These payments were being made from time to time and they were being accepted by the Certificate Officer, and, through him, by the Income Tax Department This state of things continued upto -14th August, 1957. Thereafter, it appears, the Proceedings for recovery were taken over by the Tax Recovery Officer under the Income Tax Act, 1961. Refore him, also, a further instalment was paid, namely, of Rs. 500, on or about 6th October, 1967, and, thereafter, on or about 9th November, 1967, the balance, due under the above existing certificate, namely, Rs. 7042.33 p., appears to have been paid and the same was accepted by the Tax Recovery Officer, who, however, recorded an order on that date in the following terms:--
"9th November, 1967: Challan passed for Rs. 7042.33 p. for payment. Await official challan. To date fixed for payment of balance." The next order on the order-sheet appears to be of the 18th May, 1968, which is recorded as follows:
"18th May, 1968; Seen credited challan for the marginal noted payment. Ask C. D. R. to pay balance including interest and costs." This further payment was apparently demanded under Section 16 (a) of the Public Demands Recovery Act and, to the same, the opposite party objected, on the ground, inter alia, that the Tax Recovery Officer had no jurisdiction to make such demand under the aforesaid Act This objection, however, was rejected by the learned Tax Recovery Officer upon the view that Section 297 (2) (j) of the Income Tax Act, 1961, authorised such recovery.
(2.) Against this order, the opposite party filed an appeal to the Commissioner under Rule 86, Schedule II, of the Income Tax Act, 1961. That appeal was allowed by the learned Commissioner upon the view that the recovery of interest and cost, sought for by the department, was not permissible under the law and, against the said order of the learned Commissioner, the present Rule was obtained by the Union of India.
(3.) Before us, in support of the Rule, Mr. Pal has relied on Section 16 (a) of the Public Demands Recovery Act, read with Section 297 (2) (j) of the Income Tax Act 1961, and his contention is that this demand for interest and cost is sufficiently warranted and authorised by the above provision of the Public Demands Recovery Act in the present proceeding, which was saved under Section 297 (2) (j) of the Income Tax Act, 1961.;