Law: Income Tax Act, 1961

Section: 130

(a) Income-tax---Recovery of tax---Attachment of immovable property---Objections to attachment---Scope of investigation by Tax Recovery Officer---Whether property in possession of objector and if so whether on account of defaulter---No power to go into complicated questions of title---Indian Income Tax Act, 1961, S.281, Sched. II, R.11. (b) Income-tax--- ----Tax clearance certificate---Transfer of immovable property---Restriction on registration---Certificate to be obtained where value of property exceeds specified limit---Property owned by co-owners---Interest of each individual transferor should not exceed limit---Indian Income Tax Act, 1961, 230-A. (c) Writ--- ---- Existence of alternative remedy---Recovery of tax---Sale of immovable property---Objections to sale---Dismissal by Tax Recovery Officer---Writ petition against dismissal of objections---Maintainable---Even though remedy of suit available---Constitution of India, Art. 226---Indian Income Tax Act, 1961, Sched. II. R.11. Sub-rules (4) and (5) of rule 11 of the Second Schedule to the Income Tax Act, 1961, bring out the real scope of an enquiry under rule 11 by the Tax Recovery Officer upon objections raised to the sale of immovable property in recovery proceedings. Sub-rule (3) states that the burden is on the claimants to adduce evidence and to prove that the property at the relevant time was in their possession independently of the defaulter. Thus, the central point to be adjudicated in a proceeding under rule 11 is possession. The very scheme of rule 11 shows that the enquiry would include the question whether the possession of the claimant is on behalf of the defaulter or independently of him. Though an adjudication of title is not warranted in an enquiry under rule 11, the question of title may become relevant incidentally to decide the character of the possession. The role of title in relation to rule 11 is only to that limited extent. Though in such a proceeding a document cannot be pronounced void as being sham, yet in discerning whether the possession is on behalf of the defaulter the said question can arise incidentally. The scope of enquiry under rule 11 of the Second Schedule, is limited…

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