Appeal to Commissioner: Tax recovery by auction sale of property: Income-tax Act, 1961 Sch. II, RR. 63, 65 and 86: TRO confirming sale in recovery proceedings: Order confirming sale is not conclusive: Appeal is maintainable: Period of limitation runs from the date of knowledge of the order.

A property belonging to one I was sold by auction on 22-3-1988 by the TRO for recovery of tax dues. The auction was confirmed by the TRO by order dated 25- 4-1988 and certificate of sale was issued in favour of the auction purchaser on the same day. The executor of the will of I preferred an appeal before the Commissioner purporting to be u/r. 86 of Schedule II to the Income-tax Act, 1961. The appeal was dismissed as not maintainable and being barred by time.

The Allahabad High Court allowed the writ petition challenging the order of the Commissioner and held as under:

“(i) An appeal u/r. 86 lies against the original order of the TRO, provided such an order was not conclusive in nature. The relief claimed in the appeal was to cancel and set aside the sale of property. Rule 63 did not contemplate the order of confirmation of sale to be conclusive order. The appeal was maintainable.

(ii) The intention was to challenge the order of sale confirmation and the order issuing the sale certificate. What was intended to be challenged was the sale of the immovable property also and not only the sale certificate. Mere mentioning of a wrong provision in appeal would not take away the statutory right of the petitioner, if the appeal was otherwise provided under the statute and was maintainable.

(iii) The limitation for filing appeal u/r. 86(2) was 30 days from the date of the order. The petitioner acquired the knowledge of the auction sale, the order of sale confirmation and issuance of sale certificate for the first time on 18-8-1988. The appeal was filed on 19-9-1988, within limitation from the date of knowledge.

(iv) If the party aggrieved was not made aware of the order it could not be expected to take recourse to the remedy available against it. Therefore, the fundamental principle was that the party whose rights were affected by an order must have the knowledge of the order. Thus, the appeal was within limitation both from the date of knowledge of the order and its service.”