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2018 (8) TMI 756 - HC - Income TaxRecovery of tax dues - property purchased by the appellant was under attachment - sale deed dated 11.12.2008 - petitioner had no knowledge of such attachment - the petitioner gained knowledge of such attachment subsequently on 29.09.2011 - ultimately, the petitioner received order dated 26.05.2015 declaring the sale of the property as null and void. Held that:- This sale deed is for a consideration and index copy is also issued in connection with this transaction. From the documents it appears that the public notice for executing the sale deed was issued in vernacular news paper on 26.10.2007 and thereafter, search was carried out. The search report dated 01.10.2008 is also on record along with the title clearance certificate of the advocate. All these documents go on to suggest that the property in question was free from all encumbrance having title clear and was available for transaction. The petitioner therefore, being bonafide purchaser for consideration after due diligence can not be made to suffer on account of the tax dues running in the name of the original owner. Section 281 of the Income Tax Act provides for declaring certain transfers to be void. - However, proviso to Section 281 provides that such transfer or charge may not be declared void if such transfer or charge is made for adequate consideration and without notice of pendecny or completion of such proceeding or without the notice of any tax liability or other sum payable by the assessee. Failure to follow procedure under the 2nd Schedule - Held that:- From the affidavit as well as from the additional affidavit the department has not been able to bring on record service of notice under Rule 2 of Schedule 2, only documents on record along with the additional affidavit are the order of attachment of immovable property whereas no notice as contemplated under Rule 2 is found on record. Moreover considering the affidavit filed on behalf of the SubRegistrar, Memnagar3, Ahmedabad City, it is clear that for the first time the order of attachment was given effect to by the SubRegistrar, Memnagar only on 26.06.2015, when the charge was registered in Index II. This obviously is almost six and a half years after sale deed in favour of petitioner. Impugned order is set aside - Decided in favor of petitioner and against the revenue.
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