2001 (1) TMI 12 - HC - Income Tax

Summary

Issues:
1. Refusal to issue income-tax clearance certificate under section 230A(1) of the Income-tax Act, 1961.
2. Provisional attachment of the property in question.
3. Consideration of an alternative property for provisional attachment.

Analysis:
1. The petitioner, a public charitable trust and an assessee under the Income-tax Act, challenged the decision refusing to issue an income-tax clearance certificate. The trust, exempted under the Act, sought the certificate for a term loan. Respondent No.1 rejected the application, citing non-compliance with the Registration Act. The petitioner argued no outstanding liability exists, relying on case law. The court held that without a fixed tax liability, the refusal was unjustified under section 230A(1)(b) of the Act.

2. Respondent No.1 provisionally attached the trust's property due to a survey finding cash donation receipts. The petitioner disputed the attachment and offered an alternative property for attachment. The court found no justification for the attachment as no tax liability was determined against the trust. It directed the release of the original property from attachment and issuance of the income-tax clearance certificate.

3. The petitioner offered an unencumbered property for provisional attachment, supported by a valuer's report. The court accepted the offer and directed the provisional attachment of the new property near Sunrise Shopping Centre. It ordered the issuance of the income-tax clearance certificate within two weeks, emphasizing compliance with the statutory provisions and the absence of any fixed tax liability on the petitioner.