1987 (10) TMI 6 - HC - Income Tax

Summary

Issues:
- Registration of a release deed without income-tax clearance certificate.

Analysis:
The petition sought to quash an order declining registration of a release deed due to the absence of an income-tax clearance certificate. The release deed involved the petitioner's sisters relinquishing their 3/40ths share in favor of the petitioner. The Sub-Registrar refused registration citing the non-production of the income-tax clearance certificate. The appellate authority upheld the decision, emphasizing that the value of the entire property is crucial under Section 230A of the Income-tax Act for determining the need for the certificate. However, Section 230A(1) mandates the certificate only if the property's value exceeds Rs. 50,000, specifically focusing on the interest being transferred. In this case, the sisters' interest was limited to 3/40ths share valued at Rs. 21,775, well below the threshold. Consequently, the authorities erred in requiring the income-tax clearance certificate.

The judgment quashed the impugned orders and directed the Sub-Registrar to register the release deed without insisting on the income-tax clearance certificate. The court held that as the value of the interest being transferred did not surpass Rs. 50,000, Section 230A did not apply, and the insistence on the certificate was unwarranted. The writ petition was allowed without costs, with an advocate's fee of Rs. 150.