Income Tax Officer vs B. Appa Rao

G. Radhakrishna Rao, J.—The ITO, A-Ward, Visakhapatnam, filed a suit O.S. No. 324 of 1981 on the file of the Second Addl. Sub-Judge, Visakhapatnam, to set; aside the order dated 30-9-1980 made in O.P. No. 139 of 1980-81 by the Tax Recovery Officer (TRO). The plaintiff''s case is that the adoptions and the wills set up by the defendants and accepted by the TRO, are not correct. On the basis of the pleadings, the following issue Nos. 2 to 5 have been framed:

Whether the 1st defendant''s adoption to late B. Guruvulu is true, valid and binding?

Whether the adoption of late B. Appa Rao to late Guruvulu is true, valid and binding?

4 Whether the will dated 18-3-1976 is true, valid and binding?

Whether the will dated 16-2-1962 is true, valid and binding?

Before the commencement of the trial, the defendants filed LA. No. 7 of 1985 under rule 5 of Order XIV of the Code of Civil Procedure, 1908, seeking amendment of issues. The amendment sought for is to introduce the word ''not'' in all the issue Nos. 2 to 5 so as to cast the burden of proof on the plaintiff. The learned Sub-Judge, by taking into consideration the decisions in Asoke Chandra Mazumdar Vs. Chota Nagpur Banking Association Ltd., and Khabirannessa Bibi Vs. Sudhamoy Bose, Official Liquidator to the Berhampore Bank Ltd. and Another, came to the conclusion that it is the plaintiff that has to prove the case that has been set up by him as the plaintiff wants to set aside the order passed by the TRO wherein he has accepted the two adoptions and the wills set up by the parties. The wills are dated 18-3-1976 and 16-2-1962 and the factum of adoption of the first defendant and late B. Appa Rao by late Guruvulu are not true and valid is on the plaintiff to prove. The LA. No. 7 of 1985 was allowed, by casting the burden of proof on the plaintiff. The respondent in the LA. No. 7 of 1985 who is the plaintiff in the main suit, filed the present revision petition. It is contended that the defendants have set up the two wills and the adoptions and it is they that are having full knowledge and the defendants are the persons that have to prove the wills set up by them as they filed claim petitions for raising attachments to the extent of five- sixth share which was admittedly belonged to late Guruvulu.

The plaint schedule property is admittedly the absolute property of Bora Guruvulu who is a partner of Visakha Gowda Association. He died on 15-5-1977. The second defendant is the daughter of one B. Appa Rao. The defendants are closely related to late Guruvulu. The Visakha Gowda Association fell in arrears of income tax to the tune of Rs. 12,62,921 including penalties for the two assessment years 1971-72 and 1972-73. When the income tax Department proceeded to attach the property, the claim petition has been filed to lift the attachment to the extent of five-sixth share. It was found by the TRO that the first and the second defendants are entitled to one-sixth share each and the third defendant is entitled to half share and the TRO confirmed the attachment to the extent of only one-sixth share.

Now the crucial point that has to be determined is whether in a case where a claim petition filed and allowed by the TRO under rule 11(6) of Part I of the Second Schedule to the income tax Act, 1961, the burden of proof completely rests on the plaintiff who filed a suit to set aside that order. The two rulings that have been relied upon by the lower Court relate to benami transactions. The proof in a case of a benami trans action is entirely different in a case where the adoptions and the wills have to be proved. Rule 11(6) is as follow:

(6) Where a claim or an objection is preferred, the party, against whom an order is made, may institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any) the order of the Tax Recovery Officer shall be conclusive.

The language employed in rule 11(6) is in pari materia with the old rule 63 of Order XXI of the Code of Civil Procedure. In this context, we have to consider the effect of the enquiry that has been made under Order XXI, rule 58 and the effect of the suit under Order XXI, rule 63. The scope of the enquiry under Order XXI, rule 58 is a limited one confined to the question of possession. A suit under Order XXI, rule 63 is concerned not only with the possession, but also with title. The object of the Legislature in prescribing a suit, by way of an appeal, is to give the parties an opportunity of placing respective cases fully before the Court because a summary investigation might not furnish sufficient material for a decision by an appellate Court. In other words, the object of the suit is to establish the right which has been negatived by the order on the claim petition and is in substance, to set it aside. The order passed on the claim petition is subject to the result of the suit filed by the successful party under Order XXI, rule 63.

In the present case when the claimant claiming possession on the basis of adoptions and the wills disputes the attachment, the scope of the suit under rule 11(6) is not only to determine whether the wills and the adoptions are correct but also to establish that the property belongs to the persons who claimed it. The plaintiff has to prove that he has got a right to attach the property for the purposes of selling the right, title and interest of the judgment-debtor. We cannot expect the ITO plaintiff to adduce negative evidence. The ITO has neither knowledge nor information about the factum of adoptions. Once the party filed a petition and in a summary enquiry though it is not necessary to find out the factum of the possession that has been decided by the TRO, it is incumbent on the person to prove the factum of the adoption and the execution of the wills who has set up those pleas. The general plea that the person who has approached the Court, has to prove, cannot be accepted. The finding given in a summary proceeding cannot be taken to cast the burden of proof on the other side who has no knowledge about the factum of adoption or the execution of the wills. It is the defendants that have set up the adoptions and the wills and it is for them to prove and their claim about possession and title has to be established.

The scope of proceedings under Order XXI, rules 58 and 63 has been considered in Smt. Tarubala Saha v. Nath Bank Ltd. 1972 Tax LR 1918 (Cal.) after relying upon the decision in The Kalyan People''s Co-operative Bank Vs. Dulhanbibi Aqual Aminsaheb Patil, It has been observed as follows:

Before we proceed any further, it is relevant to enquire into the respective scope of proceedings under Order XXI, rule 58 and Order XXI, rule 63 of the Code. The scope of an enquiry under Order XXI, rule 58 is a limited one. It is confined to question of possession only. But a suit under Order XXI, rule 63 is concerned not only with the question of possession but also with the question of title. In other words, the scope of the suit is different from and wider than that of an investigation under Order XXI, rule 58. In fact the order made in an investigation under Order XXI, rule 58 constitutes the cause of action for a suit under Order XXI, rule 63." (p. 1922)

In Ganpati Ram Bhande and Others Vs. Baliram Raghunath Jadhav and Others, it has been observed as follows with regard to the procedure of investigation under Order XXI, rule 58:

...It requires to be emphasised that the direction of the investigation, which the Court has to carry out, points to possession being the criteria. It is, of course, possible that in the course of such an investigation as to who is in possession of the property subjected to attachment, the question of some legal right or interest or title may also arise and if such legal right affects the determination of the question as to who is the real person in possession in fact or in law, then such a legal right or interest will naturally have to be taken into account. But it is also settled law that complicated questions as to title are not to be gone into under the summary procedure of the investigation under Order XXI, rule 58." (p. 160)

The learned counsel for the respondents relied upon Paras Nath Thakur v. Smt. Mohani Dasi AIR 1959 SC 1204 and contended that it is on the plaintiff to prove that the will is sham and a fictitious one. The proposition that has been laid down in that case cannot be disputed, but there it is a question of proof of the trust deed and the declaration sought for is that the document executed and registered is a fictitious transaction. But here the wills and adoptions have been set up and the mode of proof is entirely different and when the mode of proof is entirely different, it is not desirable to take into consideration the decisions that have been relied upon with regard to the benami transactions. The lower Court was not justified in taking into consideration the rulings relating to benami transactions. I find that the reasons given by the lower Court are not correct and the finding that has been given in a summary proceeding by the TRO cannot be deemed to be final as the rule itself contemplates filing of a suit. The defendants have to let in evidence which is within their exclusive knowledge. The issues that have been originally framed are correct and the casting of proof of burden is on the defendants so far as issue Nos. 2 to 5 are concerned, is just. In the result, the order of the lower Court is set aside. The revision is allowed. No order as to costs.