2002 (2) TMI 72 - HC - Income Tax

Summary

Issues:
1. Whether the house property is liable to be sold for recovery of wealth-tax arrears.
2. Validity of auction and sale of the property.
3. Title dispute over the property.
4. Approval for sale by one party and subsequent challenge to the sale.
5. Rejection of claim petition under the Income-tax Act.

Analysis:
1. The main issue in the judgment was whether a house property could be sold for wealth-tax arrears. The property in question was auctioned for recovery of arrears owed by the late taxpayer for several assessment years. The auction resulted in the property being sold to the highest bidder for a specified amount.

2. The validity of the auction and sale was challenged through multiple writ petitions. One petitioner sought a mandamus to direct the Tax Recovery Officer to issue a sale certificate and execute a sale deed for the property. Another petitioner, along with family members, claimed ownership of the property through a registered will deed and challenged the auction as illegal.

3. A significant aspect of the case was the title dispute over the property. Various parties claimed ownership based on different legal grounds, including inheritance through will deeds and gift deeds. The judgment highlighted that title disputes could not be resolved summarily under Article 226 of the Constitution.

4. The judgment addressed the issue of one party initially approving the sale of the property for wealth-tax arrears but later challenging the validity of the sale. The court held that such contradictory actions, known as approbate and reprobate, were not permissible.

5. Additionally, the rejection of a claim petition under the Income-tax Act was examined. The court found that the petition was filed belatedly after the final proclamation for the sale of the property, indicating a dilatory tactic. The dismissal of the claim petition was deemed justified based on the circumstances.

In conclusion, the court dismissed certain writ petitions challenging the auction and sale of the property while allowing the petition seeking a mandamus for the issuance of a sale certificate and execution of a sale deed. The judgment emphasized that parties could pursue their claims through appropriate legal remedies in a civil court, acknowledging the ongoing title disputes and complexities involved.