1. This is a writ petition under art. 226 of the Constitution. It has been prayed that the proceedings for recovery of income-tax dues and the order of the Commissioner of Income-tax be quashed and the respondents be restrained from making attachment and collection of rent of property No. 55/110, General Ganj, Kanpur.
2. The material facts as they appear from the petition, the affidavit and the annexures thereto, are these. There was an HUF consisting of Shri Krishna and his four sons. Shri Krishna was the karta of an HUF. The HUF was being regularly assessed in respect of its income. The karta filed returns for the assessment years 1949-50 and 1950-51 and the assessment for these years was completed under s. 23(3) of the Indian I.T Act, 1922 (briefly “the Act”), on March 28, 1955, and January 18, 1956, respectively. The assessment of income-tax for the assessment years 1951-52, 1952-53, 1953-54, 1954-55 and 1955-56 was completed ex parte under s. 23(4) of the Act on February 28, 1956. It appears that proceedings for recovery of income-tax for the assessment years 1949-50 and 1950-51 was started in January, 1956, and house No. 55/110, General Ganj, Kanpur, was attached in January, 1956. Smt. Lakshmi Devi, wife of Shri Krishna, karta, filed Suit No. 106/58 in the Court of the 1st Civil Judge, Kanpur, seeking declaration that the plaintiffs were owners of house No. 55/110 by virtue of a sale deed dated January 15, 1955, and the same was not liable to attachment and sale in recovery of the income-tax dues against the HUF. The plaintiffs arrayed the Union of India and the karta of the HUF and others as parties to the suit. The suit was dismissed by the civil judge. The plaintiff filed First Appeal No. 27 of 1963 in this court and the appeal was also dismissed by judgment dated May 24, 1973. It appears that the proceedings for recovery of the income-tax dues by sale of house No. 55/110, General Ganj, Kanpur, did not take place during the pendency of the suit and the first appeal. After the dismissal of the appeal, the Department again took steps to realise the arrears of income-tax. Since the beginning of the year 1975, the karta sent several letters and applications to the ITO and other authorities. In an application dated December 16, 1975 (annex. III), addressed to the Commissioner, the karta averred that he had not received any assessment order or demand notices in respect of the assessment years 1949-50 and 1950-51. In that application he also added that the Union of India had filed assessment orders for the assessment years 1949-50 to 1955-56 in Suit No. 106/58 in the year 1963 and only then the karta came to know about these assessment orders. In some applications and letters, the karta prayed for inspection of the records and for supply of assessment orders and demand notices. This process continued during the years 1975 to 1979. The last order dated 17-8-1979/8-11-79 was passed by the Commissioner saying that “no interference was called for”. Thereafter, this writ petition was filed in this court in February, 1980. In the writ petition several prayers have been made; one prayer is for quashing the recovery proceedings for “the assessment years in question”, but the assessment years have not been specified. However, the learned counsel for the petitioners has orally submitted that the assessment years involved are 1949-50 to 1955-56. The other prayer is for quashing the order of the Commissioner but no date of the order has been mentioned; orally it has been urged that the order is dated 17-8-1979/21-11-79.
3. The writ petition was filed by Shri Krishna, karta of the HUF. He died during the pendency of the petition and his sons and others have been brought on the record as petitioners and they have continued the petition.
4. On behalf of the respondents, Shri P.N Shukla, ITO, filed a counter-affidavit. He stated that the income-tax records relating to the assessee were not available. He added that it was not admitted that no notices of demand were served on the assessee. The inspection could not be allowed to the petitioner (Shri Krishna) because the records were not available. The total arrears outstanding against the assessee were Rs. 1,60,000. The writ was highly belated and was liable to be dismissed on the ground of laches itself.
5. Ram Ratan Gupta, son of Shri Krishna, filed a rejoinder-affidavit.
6. The learned counsel for the petitioners has not challenged the validity of the assessment orders in respect of the assessment years 1949-50 to 1955-56; the learned counsel has made only one submission. He has contended that notices of demand were not issued to the assessee before taking steps for recovery of income-tax dues for the assessment years 1949-50 to 1955-56 and for this reason the entire recovery proceedings were rendered null and void. Service of notice of demand was a condition precedent to the taking of steps for recovery of the amount assessed as income-tax. The assessee was asserting from the very beginning that he had not received any notice of demand. He had asserted this fact on oath in the affidavit given in support of the petition. The onus lay on the Department to prove that such notices of demand were in fact served on the assessee. The respondents had failed to place any material on the record indicating that in fact notices of demand were served on the assessee. The non-availability of the relevant records could not absolve the Department from its legal duty and no presumption of service of notices of demand on the assessee could be raised.
7. We have carefully considered the material on record and the circumstances of the case. It is true that the Department has not been able to say positively, in the absence of the relevant records, that the notices of demand in respect of the assessment years in question were served on the assessee, but, in our opinion, the own conduct of the karta shows that his assertion that he was not served with notices of demand is false and unworthy of reliance. The recovery proceedings for the income-tax dues for the assessment years 1949-50 and 1950-51 were started in January 1955, and the house No. 55/110 was attached. The karta must have become aware of these proceedings at that time. The assessments for the subsequent assessment years were completed in February 1956, but the karta took up the stand that he came to know of these assessments in the year 1963 when relevant assessment orders were filed in the civil suit. We may assume that the karta obtained knowledge of those assessment orders for the first time in the year 1963. One thing which strikes is the conduct of the karta, in that soon after coming to know of the recovery proceedings or about the assessment orders for the assessment years 1951-52 and onwards, he did not try to file an objection before the I.T authorities pointing out that the recovery proceedings could not be taken because there was no compliance with the provision of serving the notice of demand. Taking such an objection would have been a simple and cheap method but this was not done. The fact that the karta was anxious to save house No. 55/110 is evident from the fact that he executed a fictitious sale deed in favour of his wife and others in January, 1955, most probably in anticipation of the income-tax assessment order which was passed on March 28, 1955. When the house was attached for recovery of income-tax dues, Suit No. 106/58 was filed by the wife of the karta and some others who were the purchasers of the house under the sale deed of January 1955. Since the wife of the karta was one of the plaintiffs in the suit and the object of the suit was to save the house from the reach of the I.T authorities, it will be fair and reasonable to conclude that the suit was instituted at the instance of the karta with the purpose to save the house. The litigation which continued for 15 years ended in dismissal of the suit. After the conclusion of the civil litigation, when the Department proceeded to realise the arrears, then the karta came forward and moved applications for inspection of the record. When he became sure that the relevant records were not available, it was only then that he for the first time asserted in December, 1975, that the notices of demand were not served on him. Thus, this assertion came for the first time after a gap of about 15 years or more. The circumstance that the karta did not take up the plea of non-service of; notices of demand at the earliest and made this assertion after a long delay only when he became sure that the income-tax records were not available, shows that the assertion made by the karta was an after-thought and a false one. The assertion of the karta is a self-serving one, in his own interest and, therefore, in the aforesaid circumstances it does not deserve any weight. The mere fact that the assertion has been supported by the karta by an affidavit is of no consequence. The karta was a highly interested person and, therefore, his statement on oath can have no greater value than his belated assertion. The fact that the Department has not been able to make a definite assertion that the notices of demand were served on the assessee cannot help the assessee or the petitioners in this case. The failure of the respondents to make a positive assertion is not sufficient in view of the peculiar facts of the instant case, to lead to the conclusion that the assertion made by the assessee is true and worthy of reliance. It is neither a rule of prudence nor a rule of law that the statements made in an affidavit which remains uncontroverted, must invariably be accepted as true and reliable. Ordinarily, in the absence of denial, the statements may be accepted as true but if there are circumstances which suggest that the statements on affidavit should not be accepted as true, the absence of denial by the other side, would not by itself be sufficient to clothe the statements on affidavit with truthfulness and reliability. In view of the special facts and circumstances of this case, we are not inclined to accept the statement of the karta made on oath in the affidavit that the notices of demand in respect of the assessment years in question were not served on him before the commencement of recovery proceedings. As said earlier, this statement is clearly an after-thought and was made when the deponent became sure that the Department is handicapped by the non-availability of the relevant records. The normal and natural course for the ITO is to send the assessment order along with notice of demand, and tender for deposit of the amount due in a treasury or bank, to the assessee. This course must have been followed in the instant case as well. There is no reason for us to think that the income-tax office would have departed from this well-known and well-established practice of the Department when an order of assessment was made and it was found that certain amount of income-tax was due from the assessee.
8. For the foregoing reasons, we are not inclined to accept the contention of the assessee that the notices of demand in respect of the assessment years in question were not served on the karta and that the proceedings for recovery of arrears of income-tax are illegal for want of such notices. In view of what has been held above, the recovery proceedings or the order of the Commissioner do not suffer from any illegality and do not call for any interference. This writ petition has no merit and must fail.
9. The writ petition is dismissed with costs. Stay order, if any, is discharged.