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NITABEN HARISHBHAI SHAH Versus TAX RECOVERY OFFICER-I AND 3

[2017] 392 ITR 619 - Order of attachment of the property - permissible for the Tax Recovery Officer to sell the property in question for the dues of the original assessee - Held that:- Even in a case where the property is already sold by the department in an auction for the dues of the original assessee, in that case also, defaulter, or the person interested in the property can submit an appropriate application to set aside the sale on payment of entire amount due and payable by the assessee / d .....

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he property was attached under Rule 48, has been paid along with interest under section 220(2) of the Act, the impugned order declaring the transaction in favour of the petitioner as null and void deserves to be quashed and set aside. - The order of attachment under Rule 48 can be issued only with respect to the Certificate issued for the amount due and payable by the original assessee. Therefore, the contention on behalf of the revenue that the impugned attachment order dated 4/1/2005 can b .....

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le under penalty order dated 17/3/2006 and may be from the very property in question, if permissible under the law. However, on the aforesaid ground, the impugned order cannot be continued, as the amount due and payable under the Certificate has been paid by the original assessee with interest is 220(2) of the Income Tax Act. - SPECIAL CIVIL APPLICATION NO. 17280 of 2015 - Dated:- 2-2-2017 - MR. M.R. SHAH AND MR. B.N. KARIA, JJ. FOR THE PETITIONER : MR SN SOPARKAR, SENIOR ADVOCATE with MR MANAV .....

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dabad (hereinafter referred to as the property in question ), by which the Recovery Officer has declared sale of the aforesaid property in question in favour of the petitioner as null and void under Second Schedule to Rule 16 of the Income Tax Act, 1961. 2.00. It appears that a sum of ₹ 45,94,236/- was due and payable by the original assessee - Mr.Harish F. Shah in respect of Certificate bearing No.TRO.Central-II/RC/-4/04/05 dated 16/12/2004 and the interest payable under section 220(2) of .....

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nal assessee [2] Mr.Bharatbhai Fulchandbhai Shah [3] Ms.Kasturben Fulchandbhai Shah and [4] Dairy Den Engineering Pvt. Ltd. One of the co-owner namely Kasturben Fulchandbhai Shah died and therefore, her share gone to her two sons namely Mr.Harishbhai Fulchandbhai Shah and Mr.Bharatbhai Fulchandbhai Shah. That all the co-owners including the original assessee sold the property in question in favour of the petitioner - wife of the original assessee by registered sale deed dated 25/3/2008. 2.02. Th .....

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petitioner with respect to the property in question as null and void, the petitioner herein - purchaser has preferred the present petition under Article 226 of the Constitution of India. 3.00. Mr.S.N. Soparkar, learned Senior Advocate has appeared with Mr.Manav Mehta, learned advocate, on behalf of the petitioner. Mr.Manish Bhatt, learned Senior Advocate has appeared on behalf of the respondent No.1 - Revenue and Mr.Hardik Soni, learned Assistant Government Pleader has appeared on behalf of the .....

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n behalf of the petitioner. 4.01. Mr.Soparkar, learned counsel appearing on behalf of the petitioner has further submitted that earlier against the dues of ₹ 45,94,236/- and interest payable under section 220(2) of the Income Tax Act, for which the order of attachment under Rule 48 of the Second Schedule to the Income Tax Act, 1961 was passed, the original assessee has deposited a sum of ₹ 81,94,633 as on January, 2017 and the remaining amount, which was due and payable at ₹ 27 .....

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operty in question would have been sold by the department in execution of the Certificate, it is open for the defaulter, or any person, whose interest is affected by the sale, may, at any time within 30 days from the date of the sale, apply to the Tax Recovery Officer, to set aside the sale on his depositing and on payment of entire amount due and payable with interest and other amount as mentioned in Rule 60, and even the sale can be set aside. It is submitted that in the present case, as such, .....

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ent of the property in question was passed under Rule 48, has been paid. 5.00. Mr.Manish Bhatt, learned counsel appearing on behalf of the revenue has submitted that once the order of attachment is passed, the same continuous till the entire amount due and payable by the original assessee (even other than the amount for which the Certificate has been issued). It is submitted that therefore, assuming that now the original assessee has paid the entire amount due and payable under the Certificate, .....

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see has paid the entire amount due and payable under Certificate with interest, however, has submitted that some further amount is due and payable by the original assessee pursuant to the penalty order dated 17/3/2006. Therefore, he has requested to clarify that it will be open for the revenue to take further steps to recovery the amount pursuant to the penalty order dated 17/3/2006, may be from the very property in question, as the property in question has been sold after the penalty order date .....

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entral-II/RC/-4/04/05 dated 16/12/2004 and the interest payable under section 220(2) of the Income Tax Act, 1961. It is true that despite the above, the order of attachment, the original assessee transferred the property in favour of his wife - petitioner herein. However, it is required to be noted that there is serious dispute with respect to service of order dated 4/1/2005 by the original assessee. At this stage it is required to be noted that, as such, the aforesaid property in question was j .....

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ire sale deed, with respect to entire joint property, executed by all the co-owners, has been declared null and void. In any case, now the original assessee has already deposited / paid the entire amount due and payable under Certificate bearing No.TRO.Central-II/RC/-4/04/05 dated 16/12/2004, along with the interest payable under section 220(2) of the Income Tax Act, 1961, which comes to ₹ 1,09,08,485/-. It is required to be noted that the most of the amount has been deposited by the origi .....

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question was attached under Rule 48 of the second Schedule to the Income Tax Act, 1961. 6.02. At this stage, it is required to be noted that the Rule 60 of the Second Schedule to the Income Tax Act, 1961 is required to be referred to, which reads as under :- Rule 60. Application to set aside sale of immovable property on deposit:- (1)Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may, at any time within .....

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the purchase money, but not less than one rupee. (2) Where a person makes an application under rule 61 for setting aside the sale of his immovable property, he shall not, unless he withdraws that application, be entitled to make or prosecute an application under this rule. Therefore, even in a case where the property is already sold by the department in an auction for the dues of the original assessee, in that case also, defaulter, or the person interested in the property can submit an appropria .....

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4. Under the circumstances, when the entire amount due and payable under the Certificate for which the property was attached under Rule 48, has been paid along with interest under section 220(2) of the Act, the impugned order declaring the transaction in favour of the petitioner as null and void deserves to be quashed and set aside. 6.05. So far as the submission of Mr.Bhatt, learned counsel appearing on behalf of the revenue that further amount is due and payable by the original assessee - Mr.H .....

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