- (1.) SINCE common ques tions of law and facts are involved in these two writ petitions by Co-operative Societies of Varanasi in which common prayers have also been made and they stand tagged we dispose of them by this common judgment in which tour fold prayers have been made: (i) To quash the order dated 24-8-1990 passed by the Additional Collector (Finance and Revenue) District Varanasi as contained in An-nexure-3. (ii) To declare Section 230-A of the Income Tax Act, 1961 as invalid. (iii)To command the respondents not to refuse registration of the sale-deeds executed by the petitioners societies to its members on 'no profit and no loss basis' to its members. (iv)The respondents be directed not to insist the petitioners in obtaining no objection certificate from the Income Tax Department for transferring the lands, valuing less than the prescribed limit under Section 230-A of the In come Tax Act, 1961.
(2.) A perusal of the impugned order shows that the Additional Collector (Finance and Revenue) District Varanasi held valid the suspension of registration of that deeds by the Deputy Registrar, Ram Nagar in the backdrop of his explanation (copy not appended), Enquiry Report of the Deputy Commissioner, Stamp (copy not appended) Letter No. 2904/4=323 dated 16-5-89 of the I. G. Registration, Al lahabad (Copy not appended) and Letter No. P. O. 534/comm/cit (C)/knp/t/88-89/12144 dated 28-3-1989 of the Income Tax Commissioner (Central), Kanpur (ap pended as Annexure-1 ). 2. I Relevant Part of Annexure-1 reads thus: "it has been brought to the notices to the under signed that M/s. Bharat Sewak Samaj Sahkari Grih Nirman Samiti, Varanasi is under taking the sales of land and these sale-deed are being registered by the Sub-Registrar without insisting of Income Tax clearance certificate re quired under Section 230-A of the Income Tax Act, 1961. Similar is the petition in respect of various other societies. Some of which are M/s. Bhartiya Sahkari Awas Samiti Ltd. Both are situated at Varanasi, since the landed property of these housing societies exceeds the prescribed limit, it is obligatory on the societies to obtain Income Tax clearance certificate under Section 230-A of the Income Tax Act, 1961. Before getting the sale-deeds of land registered before the Sub-Registrar. I also understand that area-wise market rates have been fixed by the District Authorities in each District and stamp duty is charge on the basis of these rates. But the Co-operative societies are ex empted from stamp duty and therefore they are making misuse of this facility and not taking Income Tax clearance certificate under Section 230-A of the Income Tax Act, 1961. If the land holding or the sale deed to be registered or the price of the land as obtainable on the basis of fixed circle rates exceeds the limit of Rs. 2,00,000 of the societies are required to obtain Income Tax clearance certificate under Section 230-A before the actual registration of the sale-deeds. It may also be mentioned here that originally the limit under Section 230-A was Rs. 60,000 only and w. e. f. 1-4-1988 this limit has been sized to Rs. 2,00,000. The registration of plot is, contravention of the provisions of Section 230-A of the Income Tax Act, 1961 besides being illegal, leads to evasion of right full Income lax also. I am there fore writing to you to please consider the ad visability of directing all Sub-Registrars of the State of U. P. to get the required clearance cer tificate from the Income Tax Department of the respective places before Registering sale deed. " 2. 2 The Petitioners have appended as Annexure-2 copy of Letter bearing F. No. 230-A/90-91 dated 18th May, 1990 of the Assistant Commissioner of Income Tax, Varanasi addressed to the Registrar, Varanasi which reads thus: "this is to clarify that Section 230-A prohibits registration of a document purporting to transfer, assign, limit, or extinguish the right, title, or interest of any person to or in any property valued at more than Rs. 2 lakhs by a registering authority unless the Income Tax Officer/asstt. Commissioner of Income Tax cer tifies that registration of such document will not prejudicially affect the recovery of any existing liability under the Direct Taxes, or the person transferring the property has paid or made satis factory arrangement for payment of the existing liabilities. 2. Section 230-A of the I. T Act, however imposes no restriction upon the registering authority to register any document under Sec tion 17 of the Indian Registration Act, 1908 where the value of the immovable property in question is less than Rs. 2 lakhs. You are, there fore, requested not to insist for a tax clearance certificate under Section 230-A of I. T. Act, 1961 in those cases where the value of the property to be transferred is less than Rs. 2 lakhs presented by any person, be it an individual, a HUF or a Co- operative society etc. " Mr. Awadhesh Kumar Singh, the learned Counsel appearing on behalf of the petitioners states that the prayer No. (ii) for declaring Section 230-A of the In come Tax Act, 1961 as invalid is not being pressed. This prayer is, accordingly, dismissed as not pressed. These writ petitions in this regard stands dismissed. In regard to the remaining three prayers the submissions of Mr. Singh are as follows: On a bare perusal of Section 230-A of the Income Tax Act, it is clear that registra tion of transfer of any immovable property in cases where the value of property is more than the prescribed limit then only the vendor is required to obtain a 'no ob jection certificate' of the Taxation Authority. Where the value of the proper ty, which is sought to be transferred by the registered instrument, is below the prescribed limit then no such 'no objec tion certificate' is required to be obtained to be produced before the Registering Authority.
(3.) MR. H. R. Mishra, learned Standing Counsel appearing on behalf of Respon dent Nos. 2 to 5, on the other hand, con tended that the order impugned by the petitioner is in consonance with Section 230-A of the Income Tax Act and thus the writ petitions are liable to be dismissed. If a deed is presented for its registration in respect of properties valued below the prescribed limit then there is no necessity of obtaining a no objection certificate of the Assessing Officer. The necessity of passing the order impugned arose because the Co-operative societies, who were ex empted from payment of stamp duty, were misusing this facility and executing deeds and presenting for registration by lowering the valuation of the property vis-a-vis even the circle rate of the lands. Mr. C. K. Parekh, the learned Standing Counsel of the Union followed Mr. Mishra.;