ADARSH KUMAR GOEL, J. - (1.) THIS petition seeks quashing of order dt. 15th Feb., 2005 passed by the ITO, Karnal attaching the property of the petitioner and declaring sale in his favour by his predecessor to be void on the ground that the said vendor was in default of income-tax dues.
(2.) CASE set out in the petition is that he purchased the property in dispute vide sale deed dt. 9th Sept., 1996. Later on he came to know that the impugned order was affixed at the shop declaring the sale in his favour to be void under S. 281 of the IT Act, 1961 (in short "the Act") and attaching the property. The order was addressed to Satpal Manocha vendor of the petitioner, who had failed to pay dues to the Department. The dues were recoverable in the year 2003 which were after the sale. The petitioner filed an application seeking a copy of order. Since the petitioner had purchased the property which was free from all encumbrances, the same could not be attached under S. 222 of the Act. Moreover, the order was passed behind the back of the petitioner without affording any opportunity of hearing. In the reply filed on behalf of the IT Department, stand taken is that the sale in favour of the petitioner was a sham transaction to defraud the Revenue. The property in dispute belonged to respondent No. 4 against whom outstanding demand since 1995 was pending for the dues from the year 1985-86 to asst. yr. 1992-93 as follows : Sl. No. Asst. yr. Status Income-tax Interest Penalty Total 1. 1985-86 Indl. 6,73,575 139 =1,15,734 2,000 18,26,815 215 = 10,35,506 2. 1986-87 -do- 19,010 139 = 6,888 2,000 34,742 215 = 6,844 3. 1988-89 -do- 19,06,670 139 = 24,54,748 2,000 69,13,496 215 = 25,50,078 4. 1989-90 -do- 11,55,388 234A =18,25,573 11,55,388 60,77,341 234B =19,41,052 5. 1990-91 -do 8,32,869 234A = 7,66,044 8,32,869 36,31,113 234B =11,99,331 6. 1991-92 -do 24,27,383 234A =26,21,574 24,27,383 1,03,89,199 234B =29,12,859 7. 1992-93 -do 14,92,270 234A =16,45,787 19,59,270 69,20,183 234B =18,41,713 234C = 14,143 The sale deed was got registered at Delhi even though both the parties are at Karnal and the property was also at Karnal. Ownership of the property was not got transferred in the records of the municipal council. The original sale in favour of the predecessor of the petitioner on 16th March, 1986 was for Rs. 2,65,000 while sale in favour of the petitioner after 10 years has been shown for Rs. 2,45,000 by way of under- valuation. The shop was not occupied by the petitioner and was still lying vacant. Since the sale was a sham transaction to defraud the Revenue, the sale was void under S. 281 of the Act and the property could be attached to recover the arrears.
(3.) WE have heard learned counsel for the parties.;