RAMAPRASADA RAO J. - The petitioner is the owner of a house and premises No. 28/5, Chamiers Road, Madras-28. On August 1, 1970, he entered into an agreement with Sri Annamalai Mudaliar, residing at No. 27, Padavatta Amman Koil Street, Madras-7, for the sale of the property for Rs. 60,000. One of the terms of the agreement is that the petitioner should register the sale either in the name of Sri Annamalai Mudaliar or in the name of any one of his nominees, if the petitioner is asked to do. But, as the value of the property exceeds Rs. 50,000 the petitioner is obliged in law to obtain a certificate under section 230A of the Income-tax Act, 1961, from the Income-tax Officer of the division concerned certifying that he has paid the tax payable by him under law and has also satisfied the other prescriptions in section 230A of the Act. According to the petitioner, when he satisfies the Income-tax Officer that he has paid the taxes under the various taxing statutes of our country and as enumerated in section 230A(1), he is automatically entitled to the certificate from the Income-tax Officer without any more obligation on his part to do any further act to fill up any other Form as prescribed in the Rules framed under the Act. In particular, he refers to Form No. 34A prescribed in which the petitioner has to make his application for obtaining a certificate under section 230A of the Act.
It is not in dispute that Form 34A in Appendix II of the Income-tax Rules is a Form which is prescribed under rule 44A of the Income-tax Rules, 1962. The petitioner is not questioning in these petitions either the validity of the parent provision section 230A or rule 44A of the Income-tax Rules, 1962, or even the substantive portion of Form 34A in Appendix II of the Income-tax Rules. On the other hand, the petitioner is seeking for the issue of a writ of certiorari to quash items Nos. 14 and 17 in Form 34A referred to above as ultra vires of section 230A of the Income-tax Act. In the main, therefore, the contention of the petitioner is that he is prepared to submit an application in Form 34A, but without filling items Nos. 14 and 17 as he is not obliged to fill them up, that, when he is not enjoined to fill up these items in Form 34A, the first respondent is bound in law to issue the certificate, and that, as there is a public duty on the part of the first respondent to issue a certificate contemplated in section 230A without calling for filling up items 14 and 17, a writ of mandamus is to issue to compel him to render the certificate. The learned counsel for the petitioner satisfies the requirements of section 230A(1) of the Income-tax Act, 1961, there is no further obligation on his part and there arises a contemporaneous responsibility on the part of the first respondent to issue a tax clearance certificate for registration of the document without asking for further information, to wit, completion of items 14 and 17 in the Form referred to above.
Section 230A has obviously been incorporated in the Income-tax Act, 1961, though its primary intendment is to prevent registering officers functioning under the Indian Registration Act, 1908, from registering documents which purport to transfer, assign, limit or extinguish the right, title or interest of any person to or in any property (other than agricultural land) valued at more than Rs. 50,000 without a tax clearance certificate issued by the Income-tax Officer concerned certifying that the transferor has paid or made satisfactory provision for payment of all existing liabilities under the Income-tax Act, the Excess Profits Tax Act, 1940, the Business Profits Tax Act, 1947, etc. But Parliament, in its wisdom, has introduced this section in the Income-tax Act, 1961, presumably to serve as a double safeguard for the purpose of the revenue and also for the purpose of avoiding such documents being registered by the authorities functioning under the Indian Registration Act, without being satisfied that all the revenue commitments of the transferor have been satisfied or a provision has been made for their satisfactory discharge. Section 230A states the restrictions on registration of transfers of immovable property in cases specified therein. In a case where any document required to be registered under the provisions of clause (a) to clause (e) of sub-section (1) of section 17 of the Indian Registration Act, 1908, purports to transfer, assign, limit or extinguish property other than agricultural land valued at more than Rs. 50,000, then the registering officer shall not register the same unless -(1) he is satisfied from a certificate of the Income-tax Officer that the transferor has either paid or made satisfactory provision for payment of all existing liabilities, and (2) the registration of the document will not prejudicially affect the recovery of any existing liability under any of the aforesaid Acts. Under the rule making power, rule 44A has been framed prescribing the process for obtaining tax clearance certificates for registration of documents. Rule 44A says that an application under sub-section (2) of section 230A for a certificate under sub-section (1) of that section shall be made in duplicate in Form No. 34A to the Income-tax Officer. Form 34A contains 17 items, out of which the petitioner is aggrieved over items 14 and 17. Item 14 contemplates that the application form should mention the name and address of the transferee, assignee, etc. Item No. 17 provides that designation and address of the registering officer to whom the document has been or will be presented for registration, ought to be mentioned. The learned counsel for the petitioner states that, notwithstanding the substantive law and the procedure in relation to the restrictions on registration of transfers of immovable property in certain cases, items Nos. 14 and 17 in Form 34A are ultra vires of section 230A.
The learned counsel for the petitioner, however, is unable to substantiate and further his argument as to how and in what manner the items referred to above are violative of the sense, text and content of section 230A. As already stated, this section is primarily intended to be a safeguard against tax evasion, and it provides a double standard in that it requires not only a tax clearance certificate from the Income-tax Officer but it prescribes an interdict to the registering officer not to register any document of the type under consideration unless the Income-tax Officer certifies in the manner he is asked to do so. It is to be seen that, whilst applying his mind to an application for the issue of a tax clearance certificate under section 230A read with rule 44A of the Rules, the registering officer has to be satisfied not only on the question that the person concerned has either paid or made satisfactory provision for payment of all existing liabilities but also on the other question that the registration of the document will not prejudicially affect the recovery of any existing liability. These limbs of section 230A loom large in the instant case. One cannot comprehend as to how the Income-tax Officer can make a decision on the issues and subjectively satisfy himself that prejudices to the revenue will not occur, unless he has an opportunity to peruse the document which is obviously going to therefore, the very criteria which is necessary for the Income-tax Officer to satisfy himself subjectively is relatable to the document which is also to be registered by the registering officer, then it appears to me that the production of the document in some shape or other is an absolute necessity before the officer could arrive at a decision. It is this document that is referred to in section 230A which purports to transfer, assign, limit or extinguish the right, title or interest of any person to or in any property (other than agricultural land) valued at more than Rs. 50,000 and that is one of the documents which comes within the purview of clauses (a) to (e) of section 17 of the Indian Registration Act. Viewing the sense of the section from any angle, it appears to me that it is elementary that, before a certificate is issued by the Income-tax Officer, he should apprise himself of the contents of the document which is going to be the subject-matter of registration. If this is, therefore, the essence or meaning of section 230A, items Nos. 14 and 17 are merely some of the elements which are invariably recited in such documents. Item No. 14 speaks of name and address of the transferee. No document worth the name is complete without mentioning name and address of the transferee. As regards item No. 17, it is common knowledge that a completed document which purports to transfer rights in immovable property should set out in its schedule the description of the property, its location and generally the registering office within whose jurisdiction the property is situate. Therefore, what is required under item No. 17 of Form 34A is also a necessary recital which is found in any document of conveyance or in any document which purports to transfer, assign, limit or extinguish the right, title or interest of any person to or in any immovable property. Thus items Nos. 14 and 17 in Form 34A are concerned with information which are to be found in a completed document referred to as the document in section 230A.
Therefore, items Nos. 14 and 17 in Form 34A having rightly been introduced by virtue of the undisputed rule-making authority, it appears to me that these items are not in any manner or wise ultra vires of section 230A. In this view of the matter, a writ of certiorari cannot be issued and the rule nisi in W. P. No. 3395 of 1970 is discharged and the writ petition is dismissed. There will be no order as to costs.
W. P. No. 3394 of 1970 is for the issue of a writ of mandamus directing the Income-tax Officer to issue the necessary certificate as contemplated under section 230A of the Act. In the view I have already taken, there is no statutory obligation or public duty on the part of the first respondent to issue a certificate under section 230A of the Act, if the application for the purpose is not processed through as prescribed under the Act. Here again, the rule nisi is discharged and the writ petition is dismissed. There will be no order as to costs.