Law:

Section:

proviso to section 281 of the income-tax act, 1961 [as it stood before 1-10-1975]-void transfer-transfer for valuable consideration without notice of pendency of recovery proceedings-whether protection given in the proviso would be available while dealing with private alienations under rule 16 of second schedule-held, no Facts The ITO issued tax recovery certificates and demand notices under rule 2 of the Second Schedule on the defaulter, and after the defaulter's death, on his legal representatives between 24-3-1967 and 29-3-1972. The TRO attached, amongst other properties, a mortgaged property of the defaulter under rule 48 on 27-4-1972. The mortgagee filed an application under rule 11 objecting the attachment on the ground that the property was equitably mortgaged to it on 15-3-1969 and that the property could be attached only after satisfaction of its prior claim. The TRO rejected the objection holding that the demand notices under rule 2 were served on the defaulter prior to the date of the mortgage and under rule 51, the attachment effected on 27-4-1972 related back to the date of service of the notices and that under rule 16 an alienation effected subsequent to the attachment would be void against all claims enforceable under the attachment. The mortgagee thereafter filed a writ petition contending that the protection given in the proviso to section 281 should be available even to transfers dealt with by rule 16. The Single Judge who heard the writ petition accepted the contention and held that rule 16 was to be read so as to harmonise with the Act and the protection conferred by the proviso to section 281 must be available in respect of rule 16 as well, that, under section 281, the burden was on the Revenue and only after discharging that burden, the TRO could call upon the mortgagee to prove that he gave valuable consideration without notice of the pendency of recovery proceedings and that since these aspects were not considered by the TRO, the attachment order was vitiated by an error apparent on the face of the record and was null and void. On appeal : Held Section 281 and rule 16 operate in two different spheres and deal with quite different and…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492