TMI Blog2017 (7) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... f the immovable property, the Transfer of Property Act, would apply. As per the provisions of the Act, unless the property is transferred in the name of the purchaser, the writ petitioner herein cannot claim that he is the owner of the property. Hence, the writ petitioner has no locus standi to question the order of attachment in the present appeal, as the writ petitioner is not the owner of the property and the vendor who is the assessee cannot question the order of attachment. The transfer of immovable property can only be, by way of a sale deed. In the absence of a deed of conveyance, duly stamped and registered, no right, title or interest in an immovable property can be transferred. However, the contention of the writ petitioner/ first respondent that he is deemed to be the owner of the property cannot be accepted in the light of the Transfer of Property Act - Writ Appeal No. 95 of 2016 C. M. P. No. 1111 of 2016 - - - Dated:- 18-4-2017 - S. Manikumar And D. Krishnakumar, JJ. For the Appellant : Mr. T. Ravikumar For the Respondent : Mr. R. Gopinath JUDGMENT [ Judgment of the Court was made by D. Krishnakumar, J. ] Before the Writ Court, the first res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961. The writ petitioner/ first respondent and the third respondent presented the sale deed in Document No.87/2011 before the Sub Registrar's Office, Sowcarpet, to be registered in favour of the writ petitioner/ first respondent. But, the said document was not registered by the Sub Registrar, Sowcarpet. 3. Subsequent to the presentation of sale deed documents before the Sub Registrar Office, Sowcarpet, they came to know that the appellant department had initiated action against the third respondent, under Section 147 of the Income Tax Act, 1961 and an order has also been passed by the Assistant Commissioner of Income Tax, Company Circle I (3), Chennai on 31.12.2009, alleging that the assessee has concealed taxable income, thereby calling upon the third respondent to pay a sum of ₹ 1,63,08,463/- towards arrears of Income Tax for the assessment year 2006-2007. On 08.04.2011, the appellant department created a charge and attached the subject property, through intimation to the second respondent stating that M/s. Cosmo Foundations Ltd./ the third respondent, had failed to pay tax in time and therefore the subject property is attached. The writ petitioner/ first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est to the Revenue authority that the property at No.512 Mint Street, measuring to an extent of 8992 sq.ft. bearing RS No.600 comprised in Collector Certificate No.750 itself is sufficient to discharge the tax arrears. But the said request made by the writ petitioner/ first respondent was not accepted by the appellant department. Therefore, attachment was not lifted. Further, it is submitted that there was no sale deed registered on the date of the issuance of notice. Therefore, the claim of the writ petitioner/ first respondent that he is the absolute owner of the property is incorrect and cannot be accepted. Therefore, the contention of the writ petitioner/ first respondent is baseless and that the same is liable to be dismissed. 5. According to the learned counsel for the writ petitioner/ first respondent, the writ petitioner executed a registered sale agreement with the third respondent in Document No. 101/2010 before the Sub Registrar, Sowcarpet towards purchase of the scheduled property. The writ petitioner/ first respondent has discharged all the dues of the third respondent. As per the sale agreement, the total sale consideration has been paid on the following dates :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent should not be penalised for the non-disclosure of the said fact by the third respondent. Even the revenue records would reveal that there is no encumbrance, as issued by the Sub Registrar, Sowcarpet, as on the date of the sale agreement. Hence, the petitioner has filed the writ petition for issuance of a Writ of Mandamus, against the appellant department. According to learned counsel for the writ petitioner/ first respondent, the third respondent is not the owner of the said property, for the reason that the entire sale consideration has been paid by the writ petitioner/ first respondent and therefore the first respondent firm is the owner of the property and therefore the order of the appellant department is not binding and should be lifted. 7. Heard Mr. T. Ravikumar, learned counsel for the appellant, Mr. R. Gopinath, learned counsel for the first respondent, Mr. N. Muralikumaran learned counsel for the second respondent and Mr. A. Thiyagarajan, Senior Counsel for the third respondent and perused the material available on records. 8. It is an admitted fact that the writ petitioner/ first respondent firm entered into an agreement of sale dated 20.01.2010 and registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the enjoyment of, any immovable property. Explanation 1. For the purposes of sub-clauses (v) and (vi), immovable property shall have the same meaning as in clause (d) of section 269UA. Explanation 2. For the removal of doubts, it is hereby clarified that transfer includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India; 9. Subsequently, the Commissioner of Income Tax, passed an order dated 11.06.2014, revising the assessment order and computing the final demand payable as ₹ 10,50,259/- inclusive of interest under Section 234 B 234 C. The said amount was paid by the third respondent on 02.01.2015. The decision of the Hon'ble Supreme Court rendered in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 3rd respondent for the tax liabilities if any payable by the 3rd respondent. 15. In view of the discussions and reasons and in the light of the decisions cited supra, the impugned attachment of the property in question is directed to be lifted forthwith and the concerned Registering Authority is directed to number the impugned sale deed executed in respect of the property in question and release the sale deed, if it is otherwise in order. However, it is open to the 1st respondent Department to proceed against the other property of the 3rd respondent for the tax dues if any payable by the 3rd respondent, in accordance with law, by keeping the attachment of the other property, pending disposal of the appeal preferred by the 3rd respondent as well as the 1st respondent. 10. The writ petitioner/ first respondent herein, filed the above writ petition, after coming to know about the notice issued by the appellant department to the third respondent on 08.04.2011, intimating that the third respondent, namely, M/s. Cosmo Foundations Limited had failed to pay the dues to the department in time and the property being attached for the demand payable to the department, as per the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) of any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceedings. Against the third respondent, assessee, the department has initiated the proceedings. Therefore, Section 281 of the Act provides for certain transfers during the pendency of any proceedings. 11. As far as the instant case is concerned, the sale of property as defined under the Transfer of Property Act, 1882, was not completed at the time of order of Attachment was issued by the appellant department. At that time, only a sale agreement was entered into between the parties. The contention of the writ petitioner/ first respondent that the entire sale consideration was paid to the third respondent and the relevant documents have been handed over to the writ petitioner/ first respondent by the third respondent, would itself be sufficient to show that the writ petitioner/ first respondent is deemed to be the owner of the subject property. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immoveable property can be transferred. 19. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of sections 54 and 55 of TP Act and will not confer any title nor transfer any interest in an immovable property (except to the limited right granted under section 53A of TP Act). According to TP Act, an agreement of sale, whether with possession or without possession, is not a conveyance. Section 54 of TP Act enacts that sale of immoveable property can be made only by a registered instrument and an agreement of sale does not create any interest or charge on its subject matter. Scope of Power of Attorney : 20. A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent relied on the following decisions :- 1.Decision of the Division Bench of Allahabad High Court in the case of Raghuram Grah P. Ltd. anr. vs. Income Tax Officer Ors. Reported in (2006) 281 ITR 147 (AH), wherein it is held that the documents seized by the Central Excise Department and also requisitioned by the Income Tax Department did not relate to the business activities of either of the petitioners. As a matter of fact, the enquiries on the basis of these documents were directed by the Department against certain persons other than the petitioners. The action of the Department in provisionally attaching the bank accounts of the petitioner under Section 281B of the Act by the impugned order and its extension by the Commissioner were unwarranted in law and were liable to be quashed. In the instant case, the property does not belong to the writ petitioner/ first respondent and therefore the decision relied above, is not relevant to the facts of the present case. 2.In the decision of the Gwalior Bench of Madhya Pradesh High Court in the case of OM Prakash Gupta Ors., vs. Income Tax Officer, Ward 1, Gwalior Ors., reported in 251 ITR 714, it is held that since the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1991-1992. The petitioners took the respective shops in the said building and they were put in possession in the year 1992. The Tax Recovery Officer, Mumbai attached the said property on May 22, 1995 and by order dated 08.11.2005 the Tax Recovery Officer declared all the sales mentioned therein including those in favour of the petitioners therein as void in terms of Section 281 of the Act. Holding the sales transaction as void by the Tax Recovery Officer, was the subject matter in that case. The Gujarat High Court held that by allowing the petition the Revenue cannot proceed with the auction sale of the properties under attachment to recover the dues of the defaulter, and that there is no power to declare the sale transactions as void and that only civil suit would lie, under the Income Tax Act 1961. However, the aforesaid decision would not apply to the facts of the present case. 6.The decision of the Hon'ble Supreme Court in the case of Sanjeev Lal Ors. vs. Commissioner of Income Tax, Chandigarh anr., reported in (2015) 5 SCC 775, relates to interpretation of definition of the term transfer as defined under Section 2(47) for the purpose of allowing the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are not reliable when surrounding and attending facts brought on record by the A.O indicate and reflect paper work and documentation. But genuineness, creditworthiness and identity are deeper, it shall require to be established by documents. Being so, the Commissioner of Income Tax (Appeals) has taken just cursory look at the entire things and deleted the addition which is improper. Hence, the matter is remitted back to the file of the Assessing Officer for conducting detailed inquiry and decide the issue afresh. The assessee has to file bank account details of Smt.Vimalamma to prove the transaction. The appeal of the Revenue is partly allowed for statistical purposes. 16. Therefore, it is clear from the aforesaid decision of the Hon'ble Supreme Court that the transfer of immovable property can only be, by way of a sale deed. In the absence of a deed of conveyance, duly stamped and registered, no right, title or interest in an immovable property can be transferred. However, the contention of the writ petitioner/ first respondent that he is deemed to be the owner of the property cannot be accepted in the light of the Transfer of Property Act and as per the law laid down i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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