Law:

Section:

Section 281 of the Income-tax Act, 1961 - Certain transfers to be void - Assessment year 1984-85 - Petitioner purchased premises in question from respondent No. 3 after obtaining no objection certificate from appropriate authority - Thereafter, Assistant commissioner passed an order holding transfer of said premises as void under section 281 on ground that said property was sold during pendency of assessment proceedings of respondent No. 3 - On writ, petitioner submitted that Assistant commissioner had no power to declare a transfer of property as void and even assuming that such power existed, facts of case did not warrant an order under section 281 because transaction entered into by and between petitioner and respondent No. 3 was prior to date of filing of return by respondent No. 3 for assessment year 1984-85 - Petitioner further stated that it being a bona fide purchaser, transfer of said premises in its favour was saved under section 281 - Even revenue stated that it was not possible to support order passed under section 281, however, it submitted that quashing of action taken under section 281 should not affect attachment if any levied by Department and right of Department to have transfer declared void by taking appropriate proceedings in accordance with law - Whether, on facts, impugned order passed under section 281 was to be quashed and set aside subject to fact that quashing of said order would not affect attachment if any levied by Department in respect of said premises - Held, yes FACTS The petitioner, a Canadian banking Corporation carrying on business of banking was put in absolute and exclusive possession of the premises in question by respondent No.3. By an agreement dated 9-9-1983, the petitioner purchased the said premises from respondent No. 3. The petitioner moved the appropriate authority by filing Form. 37 EE, Form No. 37 and o objection certificate was issued approving transfer of the said property by the respondent No. 3 in favour of the petitioner. Thereafter, the Assistant Commissioner issued a notice under section 281(1) calling upon respondent No. 3 to show cause as to why the transfer of the said premises in favour of the…

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