Karnataka High Court
P.B. Shankar And Ors. vs First Income-Tax Officer, Hassan ... on 27 November, 1980
Equivalent citations: (1981)21CTR(KAR)343, [1981]128ITR431(KAR), [1981]128ITR431(KARN), [1981]6TAXMAN370(KAR)
JUDGMENT M.K. Srinivasa Iyengar, J.
1. The point involved in all these writ petitions is identical and is in respect of an order made by the First ITO, Hassan Circle, Hassan, purporting to be under s. 230A of the I.T. Act, 1961.
2. The petitioners were transferees of parcels of the properties belonging to an HUF whose karta is one M. P. Jayaram. The portions of the properties were bought under sale deeds dated December 4, 1978, and December 5, 1978. The consideration mentioned in each of the sale deeds was less than Rs. 50,000. The sale deeds were duly registered by the Sub-Registrar having jurisdiction in respect of these properties. The ITO issued notice to these transferees to show cause why a declaration should not be made under s. 230A that the transfers were void as the documents had been registered contrary to the provisions in s. 230A. Objections were filed, inter alia, contending that the proposed action was not warranted by the said provision. However, by an order dated November 16, 1979, a copy of which has been produced as Ex. D in all the writ petitions, the ITO made an order, the operative portion of which is as follows :
"Thus, the transfer of properties at Arsikere mentioned in the schedule, the value of which exceed Rs. 50,000 having been registered without obtaining a requisite clearance certificate under section 230A of the Act, I declare the transfers registered by the Sub-Registrar, Arsikere, under documents Nos. 1504, 1505 dated 4-12-1978 and 1517, 1518, 1519, 1520 dated 5-12-1978 as void under section 230A of the Act."
3. I may mentioned here that the transfers declared void were six in number whereas only five of the transferees have filed these writ petitions. But the order proceeds on a common basis.
4. The view of taken by the ITO was that it was necessary to obtain a certificate under s. 230A on the basis that the value of the properties sold would exceed Rs. 50,000. According to the contention of the petitioners, the property purchased by each of them was of the value of less than Rs. 50,000 and, therefore, no certificate at all was necessary before the documents could be registered. It is necessary to resolve this question at this stage. The contention on behalf of the petitioners is that s. 230A invests no such power with the ITO to declare any transaction as void. The wording of the section is clear and it does not warrant any such declaration being made by the ITO. The effect of the section is that in cases covered by the said provision, the registration of the document would not prejudicially affect the recovery of any existing liability under the Acts specified in s. 230A(1)(a), namely, the I.T. Act, the E.P.T. Act, the W.T. Act, the G.T. Act, etc., etc. The provisions having not invested the ITO with any power to declare any transaction void, the action of the ITO under the impugned order, Ex. D, is clearly without jurisdiction. In respect of an analogous provision, namely, s. 281 of the I.T. Act, 1961, when a similar declaration had been made, this court held that such a declaration was unwarranted and not authorised by law and a similar order that had been made was quashed in B. A. Basith v. ITO (See p. 434 infra). It was pointed out therein that the question of the transferred property becoming liable for any dues of the transferor would arise only when a specific claim had been made and was sought to be enforced against the property. Sri Ramabhadran, learned counsel for the petitioners, submitted that so far as the transferor-assessee was concerned, the Commissioner had granted him instalments to clear off his dues to the department and, in those circumstances, the question of proceeding against the properties transferred would not arise as long as the transferor-assessee kept up the payment of the instalments. Anyhow, these are aspects which do not arise for consideration or for purposes of giving any direction at this stage.
5. For the reasons stated, the order, Ex. D, in each of these cases is quashed as being without jurisdiction. There shall be no order as to costs.
6. In W.P. No. 2807/80, rule nisi had not been issued, but only notice regarding the rule had been issued. As, however, the impugned order is common to all the petitions, that petition has also been taken up for final bearing and disposed of.