Assessee-HUF received a donation of Rs. 5 lakhs from an individual. Assessment was completed which reflected said receipt. However, ITO after seventeen years, reopened assessment under section 147 and held that demand of Rs. 5 lakhs had emanated from assessee, Assessee’s appeal against said order was allowed by AAC as well as Tribunal. On reference to High Court, matter was set aside to Tribunal   thereafter passed ex parte order upholding assessment.  Assessee filed reference against said order under section 256(2)  Meanwhile recovery proceedings were initiated and assessee submitted objections that a sum of Rs. 2,45,000 had already been deposited and a sum of Rs. 1,20,000 had already been recovered and, thus, same was to be deducted from total shown in recovery certificate to TRO TRO had rejected objections and conducted auction of said property and sold same and recovered disputed sum. Assessee filed writ petition and while writ was pending, High Court answered reference in favour of assessee and entire proceedings under section 147 were held to be bad in law. Court held that   once sum of Rs. 2,45,000 was deposited, recovery certificate was required to be revised. TRO should have withheld proclamation and further proceedings of auction, particularly when demand notice and recovery certificate were based on order of Tribunal which had been set aside by High Court. Since ultimately it had been found that there was no tax requirement to be paid, writ petition is  allowed and  order were to be set aside and department is t directed to restore properties of assessee from auction purchaser and compensation should also be paid to him by department. TRO has power even to cancel recovery certificate on being informed that payment has been made by concerned defaulter. Where a reference has been admitted by High Court against an order of Tribunal, prudence demands to keep away from conducting auction of properties for purpose of recovery.  An auction  conducted under the Income-tax Act, 1961 cannot be put on the same footing as that of an auction being conducted for execution of a decree by the Court or elsewhere in public as it would be in clear distinction of income-tax default auction. Court also directed the Income tax department is directed to pay cost of Rs 1 lakh to the petitioner.    (AY. 1946-47)