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Mrs. Helen Jayaraj Vs. Sub-registrar of Mylapore and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberWrit Petition Nos. 623 and 832 of 1976
Judge
Reported in[1983]139ITR942(Mad)
ActsIncome Tax Act, 1961 - Sections 230A, 230A(1) and 230A(2)
AppellantMrs. Helen Jayaraj
RespondentSub-registrar of Mylapore and ors.
Appellant AdvocateV. Sridevan, Adv.
Respondent AdvocateC. Krishnan and ;Nalini Chidambaram, Advs.
Cases ReferredC.S. Loganathan v. P.L. Kapur
Excerpt:
.....in respect of which settlement deed executed by third respondent in favour of petitioner valued at more than rs. 50000 - third respondent was not income-tax assessee - no arrears of any taxes mentioned in section 230a (1) (a) due from third respondent - department wrongly declined to issue certificate under section 230a in respect of third respondent in favour of petitioner. - - 50,000. therefore, the first respondent registering officer was well within his rights in insisting upon the production of an i. act, 1961. the petitioner has clearly alleged in para......the one hand and the commissioner on the other, one other reason for the i.t. dept. declining to issue a certificate under section 230a of the i.t. act, 1961, to the petitioner is mentioned, and that is, the third respondent is now no more and the application for the certificate had been made only by the petitioner herein and the petitioner's sister, the seventh respondent had objected to the issuance of the certificate. merely because a reference has been made in sub-section (2) of section 230a of the act to the person referred to in sub-section (1), namely, the person who purports to transfer, assign etc., his interest in properties valued at more than fifty thousand rupees, the i.t. dept. cannot, in my opinion, decline to issue a certificate in favour of the petitioner on the ground.....
Judgment:

Varadarajan, J.

1. These two writ petitions have been filed by the same individual, Mrs. Helen Jayaraj, under Article 226 of the Constitution of India, W.P. No. 623 of 1976, being for the issue of a writ of certiorari calling for the records of the Sub-Registrar, Mylapore, Madras, the first respondent, relating to Enquiry No. 1 of 1975, and for quashing the order dated November 26., 1975, passed by him in that enquiry as confirmed by the order of the Inspector General of Registration, Madras, the second respondent, dated January 5, 1976, and W.P. No. 832 of 1976, being for the issue of a writ of mandamus or any other appropriate direction or order directing the Second ITO, City Circle, 11(2), Madras-34, the fourth respondent and the Commissioner of Income-tax, III Circle, Madras-34, the fifth respondent, to issue an I.T. Clearance Certificate under Section 230A of the I.T. Act, 1961, in relation to the third respondent in respect of income tax and other taxes specified in this section for registering the document dated March 3, 1974, executed by the third respondent in favour of the petitioner and the seventh respondent which has been presented for compulsory registration by the petitioner before the first respondent. It is unnecessary to state the facts mentioned in W.P. No. 623 of 1976, which has to be dismissed having regard to the fact that appropriate reliefs have been prayed for in W.P. No. 832 of 1976.

2. According to the petitioner, the third respondent had executed a settlement deed dated March 3, 1974, in favour of herself and her sister, the seventh respondent, both of whom are the daughters of the third respondent, in respect of properties valued at more than rupees fifty thousand. Subsequent to the execution of the settlement deed, the third respondent declined to have the document registered. The petitioner, therefore, presented the document before the first respondent, the Sub-Registrar on June 15, 1974, for compulsory registration after paying the deficit stamp fee of Rs. 1,380.25 together with penalty of Rs. 100. The first respondent conducted an enquiry in Enquiry No. 1 of 1975, on his file and passed an order dated May 13, 1975, holding that the document had been duly executed by the third respondent and is liable for compulsory registration and that having regard to the fact that the properties in respect of which the settlement deed was executed by the third respondent are valued at more than Rs. 50,000, an I.T. Clearance Certificate under Section 230A of the I.T. Act, 1961, has to be produced for registering the document. The petitioner filed an application before the first respondent on July 15, 1975, requesting him to dispense with the production of the I.T. Clearance Certificate on the ground that Section 230A does not apply to involuntary transfers. Proceeding on the basis that the document dated March 3, 1974, is an involuntary document, she produced the copy of the judgment in C.S. Loganathan v. P.L. Kapur : [1972]83ITR430(Delhi) , along with the application. The first respondent passed the impugned order dated November 26, 1975, declining to dispense with the I.T. Clearance Certificate. Thereafter, the petitioner filed an application for appropriate relief before the second respondent, the Inspector General of Registration ; but by his order dated January 5, 1976, he held that the I.T. Clearance Certificate was necessary and that the petitioner could seek redress in a court of law, if so advised. Thereafter, the petitioner presented an application on May 31, 1975, before the fourth respondent, the ITO, for the issue of the certificate in respect of the third respondent. But the fourth respondent declined to receive the application for the issue of the I.T. Clearance Certificate stating that the application could be made only by the third respondent.

3. Subsequently, the petitioner filed W.P. No. 623 of 1976 for the issue of a writ of certtorari as stated above. Later she filed W.P. No. 832 of 1976 for the issue of a writ of mandamus. The third respondent, the executant of the document dated March 3, 1974 and respondents Nos. 1 and 2 have not filed any counter-affidavit in W.P. No. 832 of 1976. Even respondents Nos. 6 to 8 have not filed any counter affidavit in that writ petition. Only respondents Nos. 4 and 5 have filed counter-affidavits in that writ petition admitting that the third respondent was not an income-tax assessee at all and contending that Section 230A of the I.T. Act, 1961 is applicable to all transfers whether voluntary or involuntary. Respondents Nos. 4 and 5 have stated in their counter-affidavit that there is nothing on record to show that the petitioner presented any application on May 31, 1975, for the issuance of an I.T. Clearance Certificate relating to the third respondent without specifically denying the petitioner's allegation that the application dated May 31, 1975, for the issuance of the I.T. Clearance Certificate relating to the third respondent was refused to be accepted by the ITO. Respondents Nos. 4 and 5 further contend that even if the petitioner had presented such an application, no certificate could be granted to the petitioner on the ground that the fourth respondent has no jurisdiction to grant it, having regard to the provisions of Section 230A(2) of the I.T. Act, 1961, under which the application for the issue of an I.T. Clearance Certificate has to be made by the person referred to in Sub-section (1) of Section 230A and the petitioner was not the person, contemplated by Section 230A(1) and (2), to apply for and obtain a certificate and, also because, the third respondent objected by his letters dated May 17, 1975, and June 11, 1975, to the issuance of the certificate to the petitioner. Respondents Nos. 4 and 5 contend that no writ of mandamus could be issued against the fourth respondent to do an act which is not authorised by the statute.

4. Section 230A of the I.T. Act, 1961, reads thus:

'(1) Notwithstanding anything contained in any other law for thetime being in force, where any document requited to be registered underthe provisions of Clauses (a) to (e) of Sub-section (1) of Section 17 of the IndianRegistration Act, 1908 (16 of 1908), purports to transfer, assign, limit orextinguish the right, title or interest of any person to or in any propertyvalued at more than fifty thousand rupees, no registering officer appointedunder that Act shall register any such document, unless the Income-taxOfficer certifies that--

(a) such person has either paid or made satisfactory provision for payment of all existing liabilities under this Act, the Excess Profits Tax Act, 1940 (15 of 1940), the Business Profits Tax Act, 1947 (21 of 1947), the Indian Income-tax Act, 1922 (11 of 1922), the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1957 (29 of 1957), the Gift-tax Act, 1958 (18 of 1958), the Super Profits Tax Act, 1963 (14 of 1963), and the Companies (Profits) Surtax Act, 1964 (7 of 1964); or

(b) the registration of the document will not prejudicially affect the recovery of any existing liability under any of the aforesaid Acts.

(2) The application for the certificate required under Sub-section (1) shall be made by the person referred to in that Sub-section and shall be in such form and shall contain such particulars as may be prescribed.

(3) The provisions of Sub-section (1) shall not apply in a case where the person referred to in that Sub-section is any such institution, association or body, or belongs to any such class of institutions, associations or bodies, as the Board may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette.'

5. Admittedly, the properties in respect of which the settlement deed dated March 3, 1974, had been executed by the third respondent in favour of the petitioner and her sister, the seventh respondent, are valued at more than Rs. 50,000. Therefore, the first respondent Registering Officer was well within his rights in insisting upon the production of an I.T. Clearance Certificate issued under Section 230A of the I.T. Act, 1961. The petitioner has clearly alleged in para. 5 of his affidavit filed in support of W.P. No. 832 of 1976 that she presented an application on May 31, 1975, before the fourth respondent ITO for the issuance of a certificate relating to the third respondent and that the fourth respondent refused to receive the same, on the ground that it was only the third respondent who should apply for the certificate, and returned the application to her. There is no specific denial of this allegation. What is stated in the counter-affidavits of respondents Nos. 4 and 5 is that there is nothing on record to show that the petitioner presented any application on May 31, 1975, before the fourth respondent for the issuance of a certificate relating to the third respondent. In the absence of any specific denial in the counter-affidavits of respondents Nos. 4 and 5 of the petitioner's said allegation, it must be deemed to have been admitted by respondents Nos. 4 and 5 that the petitioner presented an application on May 31, 1975, to the fourth respondent for the issuance of a certificate under Section 230A of the I.T. Act, 1961, relating to the third respondent and it was refused to be received and returned to her on the ground that the third respondent alone could apply for the issuance of the certificate. If the application had been returned as alleged by the petitioner in the affidavit, certainly there would be nothing on record to show that the petitioner presented an application on May 31, 1975, before the fourth respondent for the issuance of a certificate relating to the third respondent. It is admitted by respondents Nos. 4 and 5 in the counter-affidavits that the third respondent was not even an income-tax assessee. Therefore, there could not have been any arrears of tax as mentioned in Section 230A(1)(a) of the Act. This is also admitted before me. The document dated March 3, 1974, had no doubt been executed by the third respondent in respect of his properties valued at more than Rs. 50,000. Sub-section (2) of Section 230A of the Act no doubt says that the application for the certificate required under Sub-section (1) shall be made by the person referred to in that Sub-section, namely, a person who purports to transfer, assign, limit or extinguish the right, title or interest of any person to or in any property valued at more than fifty thousand rupees and that it shall be in such form and shall contain such particulars as may be prescribed. But, in the present case, it is found that the third respondent who has been held by the first respondent, in Enquiry No. 1 of 1975 by his order dated May 13, 1975, to have executed the document dated March 3, 1974, had subsequently turned round andrefused to have the document registered and he had gone one step further by sending letters dated May 17, 1975, and June 11, 1975, to the fourth respondent objecting to the issuance of a certificate under Section 230A of the I.T. Act, 1961, to the petitioner. In the correspondence between the learned counsel appearing for respondents Nos. 4 and 5 on the one hand and the Commissioner on the other, one other reason for the I.T. Dept. declining to issue a certificate under Section 230A of the I.T. Act, 1961, to the petitioner is mentioned, and that is, the third respondent is now no more and the application for the certificate had been made only by the petitioner herein and the petitioner's sister, the seventh respondent had objected to the issuance of the certificate. Merely because a reference has been made in Sub-section (2) of Section 230A of the Act to the person referred to in Sub-section (1), namely, the person who purports to transfer, assign etc., his interest in properties valued at more than fifty thousand rupees, the I.T. Dept. cannot, in my opinion, decline to issue a certificate in favour of the petitioner on the ground that the third respondent had objected to the same with the object of defeating the rights claimed by the petitioner under the document and also because the seventh respondent appears to have objected to the issuance of the certificate in favour of the petitioner. When the I.T. Dept. finds that the third respondent was not even an income-tax assessee and no arrears of any of the taxes mentioned in Clause (a) of Section 230A(1) of the Act was due from the third respondent, the I.T. Dept. should have issued a certificate to the petitioner after taking an overall picture of the matter and not be guided only by the words of Sub-section (1) of Section 230A. There is no positive law in the Act for the issuance of a certificate to a third party. Therefore, I am of opinion, that the I.T. Dept. has wrongly declined to issue a certificate under Section 230A of the Act in respect of the third respondent in favour of the petitioner. Having regard to the facts and circumstances of the case, I find that this is a fit case where the first respondent has to be directed to register the document without insisting upon the production of the certificate under Section 230A of the I.T. Act, 1961. For the reasons stated above, W.P. No. 623 of 1976 is dismissed without costs and W.P No. 832 of 1976 is allowed directing the first respondent to register the document dated March 3, 1974, presented by the petitioner for compulsory registration without insisting upon production of the I.T. Clearance Certificate under Section 230A of the I.T. Act, 1961. The petitioner will have her costs in the writ petition payable by the fifth respondent, the CIT, III Circle, Madras, and the sixth respondent, the 9th ITO, City Circle II, Madras. Advocate's fee Rs. 150.


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