Decided on January 17,1994

UNION OF INDIA Respondents


Suhas Chandra Sen, J. - (1.)The facts of the case have been summarised in the judgment under appeal in the following manner : The property involved in the present litigation is premises No. 3D, Nandi Street, Calcutta-29. The erstwhile owner of the property was one Mrs. Aparna Chakraborty, the predecessor-in-interest of the present respondent No. 3, who was impleaded, at the time the instant writ application was moved, as respondent No. 3. The erstwhile owner, Smt. Chakraborty, purchased the property by a registered conveyance, dated February 4, 1959, and got her name mutated in the records of the Calcutta Municipal Corporation and also in the records of the Calcutta Electric Supply Corporation for supply of electricity to the said premises. In April, 1987, there was a registered agreement between the said erstwhile owner and the present petitioner, whereby the property was agreed to be sold, by the previous respondent No. 3 to the present petitioner. On or about October 20, 1987, a tax clearance certificate for such sale under Section 230A of the Income-tax Act was issued on the prayer of the erstwhile respondent No. 3, by the Income-tax Officer, K-Ward, District-7, Calcutta. The agreed sale in favour of the present petitioner by erstwhile respondent No. 3 was effected through a registered instrument dated November 14, 1987, and the previous respondent No. 3 asked the tenant of the said property to attorn to the purchaser petitioner. It is pertinent to note that the husband of previous respondent No. 3, Sri N. G. Chakraborty, who died on April 24, 1984, was never assessed with regard to the said property. It appears from the materials produced before me that the said property was purported to have been attached on November 6, 1987, for the income-tax dues of Sri N. G. Chakraborty since deceased, and the tenants of the said property were asked not to make payment of rent to the said Sri N. G. Chakraborty --a fact which came to the knowledge of the petitioner on or about December 12, 1987. On enquiry, on or about December 18, 1987, the petitioner came to know that the said property in enforcement of the order of attachment, had been notified for sale.
(2.)It may be noted that the case of the Department is that the husband of the appellant, Sri N. G. Chakraborty, who died on April 24, 1984, had all along been assessed in respect of the annual rental value of the property in dispute. Mr. Murarka, on behalf of the purchaser of the property, has contended that the provisions of the Benami Transactions (Prohibition) Act, 1988, made it clear that the transaction being benami in the name of the wife could not be attached by the Tax Recovery Officer. The provisions of the Benami Transactions (Prohibition) Act, 1988, was a complete bar to the point taken by the Tax Recovery Officer. We do not propose to go into this controversy in this case because in our view the contention of the appellant should succeed otherwise. We make it clear that we have not upheld the contention of Mr. Murarka in this regard. This question is left open to be decided in some other proceedings.
(3.)It is well-settled that the statutory authority cannot exercise the powers beyond the statutory provisions. Under the Income-tax Act, there is no bar against transfer of property by husband to wife. If the transfer is without any consideration or for inadequate consideration then certain consequences follow. One of the consequences is that the income of the property is liable to be included in the hands of the husband for the purpose of assessment. These provisions were contained in Section 16(3) of the Indian Income-tax Act, 1922. Similar provisions have been included in Section 64, Sub-section (1), Clause (iv), of the Income-tax Act, 1961. It is to be noted that although the income is to be included in the assessment of the husband the transfer of the property to the wife did not became void altogether. Under the Income-tax Act, 1961, certain provisions have been made to safeguard the revenue and to enable the Tax Recovery Officer to proceed against the transferred properties. Section 222 provides that a Tax Recovery Officer may proceed to attach and sell the assessee's immovable property when the assessee is in default or is deemed to be in default in making payment of tax. The Explanation to Section 222 which was inserted with effect from October 1, 1975, has strengthened the arm of the Tax Recovery Officer who can attach and sell properties which have been transferred directly or indirectly by the assessee in default to his spouse but this provision has been applied to transactions which take place after June 1, 1973.

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