| Case ID |
e2d560d0-de4e-4910-856f-174a2079399d |
| Body |
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| Case Number |
WRIT PETITION No. 2724 OF 1972 |
| Decision Date |
Nov 14, 1974 |
| Hearing Date |
|
| Decision |
The court held that the petitioner, who had executed a bond agreeing to pay tax arrears in case of default by the assessee, could not repudiate this promise once a tax clearance certificate was issued based on that undertaking. The petition was dismissed as the petitioner was found liable to pay the arrears due to the specific undertaking to pay tax arrears in monthly installments. The court ruled that the provisions of section 220(7) could not be invoked by the petitioner or the assessee to escape their obligations. The ruling reinforced the legal principle of promissory estoppel, emphasizing that parties must honor their commitments made in the course of legal proceedings. |
| Summary |
This case involves the interpretation of the Income-tax Act, 1961, particularly sections 220 and 230 concerning tax clearance certificates and recovery of tax arrears. The petitioner, S. Manickam Chettiar, guaranteed the payment of tax arrears owed by the assessee, S.P. Viswanathan Chettiar, who had significant tax liabilities amounting to Rs. 93,357. The court found that the petitioner could not escape liability despite invoking section 220(7), which allows for certain defenses against tax recovery. The ruling highlighted the importance of fulfilling legal obligations and the binding nature of security bonds in tax matters. The decision emphasizes the doctrine of promissory estoppel, which prevents a party from going back on a promise that was relied upon by another party. This case serves as a crucial reference for tax law practitioners and individuals dealing with tax liabilities, particularly regarding the importance of security bonds and compliance with tax obligations. Understanding the implications of such legal commitments is essential for taxpayers and their representatives. Keywords include 'Income-tax Act', 'tax clearance', 'tax arrears', 'promissory estoppel', 'legal obligations', and 'tax law'. |
| Court |
Madras High Court
|
| Entities Involved |
Not available
|
| Judges |
G. Ramanujam,
V. Ramaswami
|
| Lawyers |
K. Srinivasan,
K.C. Rajappa,
V. Balasubrahmanyan,
J. Jayaraman
|
| Petitioners |
S. Manickam Chettiar
|
| Respondents |
Income Tax Officer
|
| Citations |
1976 SLD 454 = (1976) 104 ITR 283
|
| Other Citations |
Central London Property Trust Ltd. v. High Trees House Ltd. [1947] 1 KB 130 (KB),
Combe v. Combe [1951] 2 All. ER 767 (CA),
Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. [1955] 2 All ER 657 (HL),
Turner Morrison & Co. v. Hungerford Investment Trust [1972] 85 ITR 607 (SC),
Union of India v. Anglo-Afghan Agencies AIR 1968 SC 718
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
220,
230
|