G.K. Vijaya Bhaskar Reddy V. Commissioner of Income Tax-III and Commissioner of Income Tax, Chennai-I and The Additional Commissioner of Income Tax, Company Range-II and Tax Recovery Officer-6 and Tax Recovery Officer-II, Company Range-II and The Joint Registrar and Sub-Registrar and M/s. IGGI Resorts International Ltd. and Indian Overseas Bank

WP/11543/2009

AI Insights

The case involves G.K. Vijaya Bhaskar Reddy, the petitioner, who purchased a flat from IGGI Resorts International Ltd. (the 8th respondent) in 2000. The flat was later declared void in terms of transfer by the Tax Recovery Officer (TRO) due to an attachment under the Income Tax Act, 1961. The petitioner contested this decision, arguing that he was a bona fide purchaser and had no knowledge of the attachment at the time of purchase. The court examined the legality of the TRO's order, which was based on the property being under attachment at the time of the sale, and found the order to be valid, dismissing the writ petition.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 681699 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 15-06-2009
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: B SARMA
• Assessee Lawyers: S KUMAR
• Keywords: Equity; Income Tax Act; Natural Justice; Transfer of immovable property; Void transfer; Writ of Certiorari
• Section: 11; 226; 281

Judgement Text

" IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE FIFTEENTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION NO : 11543 of 2009 Between: G.K. Vijaya Bhaskar Reddy S/o. G.K. Timmareddy R/o. H.No.19, D.No.2-191, SBI 1st Colony, Adoni, Kurnool District. ..... PETITIONER AND 1Commissioner of Income Tax-III, 7th Floor, I.T. Towers, A.C. Guards, Hyderabad. 2Commissioner of Income Tax, Cheenai-I, 121, N.H.Road, Chennai-34. 3The Additional Commissioner of Income Tax, Company Range-II, 121, N.H.Road, Chennai-34. 4Tax Recovery Officer-6, I.T. Towers, 6th Floor, 'C' Block, A.C. Guards, Hyderabad. 5Tax Recovery Officer-II, Company Range-II, IVth Floor New Block, Room No.404, 121, N.H.Road, Chennai-34. 6The Joint Registrar, M.J. Market, Hyderabad. 7Sub-Registrar, O/o. The Sub-Registrar, Sanjeev Reddy Nagar, Hyderabad. 8M/s. IGGI Resorts International Ltd., No.T-18-A, Also Mal Complex, 149, Montieth Road,Egmore, Chennai-8. 9Indian Overseas Bank, Hyderabad Main Branch, 104/1, Bank Street, Koti, Hyderabad-95. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue a writ of Certiorari or any other appropriate writ, order or orders declaring that the order of the 5th respondent under Rule 11 of the Second schedule of the Income Tax Act, 1961 Read with Section 281 of the Income Tax Act vide proceedings bearing TR No.29/02-03/TRO-II dated 5.5.2009 declaring the transfer of immovable property bearing Flat No.101, First Floor, Front Block, of Life Style IGGI Metro Residency, situated at 6-2-42, A.C. Guards, Hyderabad affected by 8th respondent to the petitioner to be void, as illegal, prejudicial, arbitrary, beyond the scope of the powers of the 5th respondent and against principles of natural justice and equity and to quash such other order of declaration as the said order resulted in abuse of process of law and to pass Counsel for the Petitioner:MR.S.ARUN KUMAR Counsel for the Respondent No.: MR.B.NARASIMHA SARMA The Court made the following : THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR W.P.No.11543 of 2009 ORDER: (Per Ghulam Mohammed, J) This writ petition is filed seeking a writ of Mandamus to declare the proceedings bearing TR No.29/02-03/TRO-II, dated 05.05.2009 of the 5th respondent under Rule 11 of the Second Schedule of the Income Tax Act, 1961 read with Section 281 of the Income Tax Act, declaring the transfer of immovable property bearing Flat No.101, First Floor, Front Block, of Life Style IGGI Metro Residency, situated at 6-2-42, A.C.Guards, Hyderabad, effected by the 8th respondent to the petitioner to be void, as illegal and arbitrary. 2. The brief facts of the case are as follows: The petitioner purchased the above said flat from the 8th respondent by paying a valid consideration of Rs.3,00,000/- vide registered sale deed dated 23.08.2000 and thereafter, he let out the same in the year 2004. The 5th respondent served a notice dated 4.10.2002 on the 8th respondent with an order of prohibition and restraining it in dealing with the property situated at 6-2-42, A.C. Guards, Hyderabad. The 5th respondent also through the 4th respondent served a letter, dated 24.10.2002 to the 6th and the 7th respondents, enclosing a copy of the notice, dated 4.10.2002, prohibiting sale of the property until further orders. The contention of the petitioner is that he purchased the property earlier to the notice issued by the 5th respondent. The petitioner filed a claim application on 06.11.2002 under Rule 11 to the Second Schedule of the Income Tax Act, 1961 before the 5th respondent for raising the attachment. While so, the 5th respondent has served a show cause notice dated 23.12.2008 to the petitioner to explain why transfer of property effected by the 8th respondent in his favour should not be treated as void. The petitioner has given reply to the show cause notice. Not being satisfied with the explanation offered by the petitioner, the 5th respondent has passed an order dated 5.5.2009 declaring the transfer of the property effected by the 8th respondent to the petitioner to be void. Aggrieved by the same, the present writ petition has been filed. 3. The learned counsel for the petitioner contended that the petitioner has purchased the flat from the 8th respondent by paying a valid sale consideration through a registered sale deed in the year 2000 and therefore, the petitioner is the bonafide purchaser. The 5th respondent issued the notice after two years of purchase of the flat by the petitioner. The learned counsel contended that before purchase of the flat, the petitioner has verified the title deeds and obtained encumbrance certificate and it does not refer to the attachment made by the Income Tax Department. The learned counsel further contended that the orders passed by the 5th respondent is not in accordance with law and suffers from the legal infirmities. 4. Heard the learned counsel for the petitioner and the learned counsel for the respondents 1 to 5. 5. We have perused the record. It appears that the petitioner has purchased the property without verifying the original title deeds. At the time of purchase, the title deeds were with the Income Tax Department and the property was under attachment. The 5th respondent after issuing notices under the provisions of the Income Tax Act and after giving sufficient opportunity to the petitioner, has passed the orders dated 5.5.2009 declaring that the transfer of immovable property bearing No. 6.2.42, A.C.Guards, Hyderabad is in violation of the provisions of Income Tax Act. In the circumstances, we do not find any infirmity in the impugned order passed by the 5th respondent. 6. However, it is open for the petitioner to challenge the order dated 5.5.2009 by way of filing a suit as contemplated under Sub Rule 6 of Rule 11 of the Second Schedule of the Income Tax Act, 1961, which reads as under: “ Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive.” 7. On filing such suit by the petitioner, the civil court has to adjudicate the issues, which are raised in the writ petition, without being influenced by any of the observations made in this order. 8. With the above observation, the writ petition is dismissed. No costs. _____________________ GHULAM MOHAMMED,J _____________________ VILAS V. AFZULPURKAR 15-06-2009 Stp ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1) 2 CD copies Form-NIC-OGS/WP{MSN} "