INCOME-TAX OFFICER, MADRAS vs BUDHA PICTURES, MADRAS

The Supreme Court held that under Section 46(5A) of the Indian Income-tax Act, 1922, a notice can only be served to a person with whom there exists a subsisting relationship with the assessee. The Court clarified that the terms 'may become due' and 'may subsequently hold money' imply a current relationship, such as that of an employer or banker, and do not extend to all potential future employers. Since the film company had no such relationship with the actor 'B' at the time of the notice, the recovery of Rs. 20,000 was deemed unjustified, affirming the High Court's decision in favor of the company.