Law: Income Tax Act, 1961

Section: 230,230A

Income-tax----Tax clearance certificate---Transfer of property---General principles relating to tax clearance certificates under S.230A---Indian Income Tax Act, 1961, S.230A. The requirements of section 230A of the Income Tax Act, 1961, are as follows: (i) A document must prospectively be in sight which requires registration under section 17; (ii) the person applying for clearance must be seeking to transfer some interest to, or in property which he has; this is not necessarily immovable property; also it does not necessarily follow that if the applicant's interest sought to be transferred were the sole subject ­matter of a conveyance or assignment, it would have required registration under section 17; (iii) the value of the interest sought to be conveyed must exceed Rs.5,00,000; (iv) there might be sereval applicants under section 230A in respect of the same prospective document each applying to his own Income-tax Officer;. (v) the decision as to grant of section 230A clearance must be taken by each Income-tax Officer independently of what course the other Income-tax Officer might take in regard to other assessees. The above principles are not intended to be exhaustive, nor very exact, but are only laid down for the purpose of guidance on points of principle and understanding. It should be borne in mind that it is in the interests of the Revenue so to construe section 230A that the maximum number of persons require to get clearance and, therefore, have locus standi to apply for it. It is in the interest of the Revenue that transfers are not made without clearance of tax liability. It should also not be lost sight of, that persons without income ­tax liability who have engaged in some sort of productive economic activity should get the certificate or other benefits of their applications are not tainted by any illegality. THIS JUDGMENT DELIVERED BY The writ petitioners hereinafter called Sashank are developers. By different agreements they entered into contracts with the owners of the land in question, the Boses. These were agreements for sale and development agreements. Pursuant to these Sashank have built upon the land. They now proposed to sell the nine flats…

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