S.L.Saraf, J. - (1.) BY this writ petition, the petitioner seeks quashing of the order passed by respondent No. 1 under Section 264 of the Income-tax Act, 1961, on. December 5, 1995. The petitioner filed this revision application under Section 264 of the Income-tax Act against the refusal of the assessing authority to grant a certificate for sale of a particular property,
(2.) THE case of the petitioner was that the petitioner was entitled to sell the said property if he so chooses and he sought permission under Section 250A of the Act for sale of the said property from the assessing authority. THE petitioner contended before the Assessing Officer that he had no existing liability as prescribed under Section 230A of the Income-tax Act and fulfils all the requirements and conditions of Section 230A and Rules 44A and 44B of the Income-tax Rules, as such the respondents are obliged to issue the certificate under Section 230A of the Act. According to the petitioner, the property was agreed to be sold at a value of Rs. 22 lakhs. THE Assessing Officer refused to grant the certificate on the ground that a suit was filed by the Income-tax Department to declare that the settlement arrived at by the Settlement Board and the assessee was wrongful and was obtained by fraud. It was alleged that if they would have succeeded before the Additional District Judge a claim of Rs. 13,71,000 would have arisen against the petitioner and nothing more. THE Assessing Officer by an order dated December 5, 1995, refused to grant the certificate because Civil Suit No. 44 of 1969 for recovery of Rs: 13,71,000 is still pending for decision and as such the issue of certificate under Section 230A would have prejudiced the recovery of heavy outstanding demand and so he refused to interfere in the matter. Learned counsel for the petitioner submits that the suit which was filed before the civil court has now been dismissed by an order dated November 28, 1997, and he files an affidavit to that effect before this court. To appreciate the submissions of counsel Section 230A of the Act of 1961 is set out hereunder ; "230A. (1) Notwithstanding anything contained in any other law for the time being in force, 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 (16 of 1908), 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, no registering officer appointed under that Act shall register any such document, unless the Income-tax Officer 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."
(3.) FROM the perusal of the aforesaid provisions of the Act, it is clear that what is contemplated is the existing liability ascertained and payable upon an assessment and other order. Admittedly there was no existing liability of the petitioner as on the date when the application for certificate under Section 230A was made before the authorities by the petitioner. A claim was raised by the Department on the basis of an alleged fraud alleged to have been perpetrated by the petitioner. Such a claim unless certified by a decree of the civil court and by passing appropriate orders of assessment under the Income-tax Act by following the proper procedure as laid down under the said Act, can constitute an existing liability. In the instant case, the claim, if any, was not an existing liability on the date when the petitioner has sought for permission and certificate under Section 230A of the Income-tax Act. There was only a claim and nothing more. The civil court decree will have given the Department a right to claim and nothing more. The decree would not have converted the claim into a liability. Section 230A makes it clear in no unambiguous terms that "existing liability" can be the ground for non-granting of certificate or permission for sale. In the instant case, I find no existing liability of the petitioner under the provisions of Section 230A of the Act, nor has any been claimed by the Department as such. The Department has only raised a claim and the same has been dismissed by the Additional District Judge, Kanpur. In that view of the matter, I direct the respondents to grant the certificate under Section 230A within a period of three weeks from the date of service of this order on the respondents for the sale of property No. 83/22A, Fazalganj, Kanpur. With these observations this petition is finally disposed of.;