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Transfer of properties requiring tax clearance certificates under section 230A of the Income-tax Act, 1961. Analysis: The judgment involved three petitions concerning the transfer of properties and the issuance of tax clearance certificates under section 230A of the Income-tax Act, 1961. The petitioners approached the respondent-authorities seeking tax clearance certificates to register relevant documents under the Indian Registration Act. The authorities denied the certificates citing non-production of certain account details for the accounting year 1999-2000 and the issuance of notices under section 158BC of the Act. The petitioners contended that as they had no existing tax liability, the authorities were unjustified in refusing the certificates. They relied on the case of Gopal Industrial Estate v. ITO [1980] 123 ITR 727, which stated that recovery proceedings cannot be initiated without determining tax liability. The petitioners argued that since the block assessment was ongoing and no tax demand had been raised, the authorities had no grounds to deny the certificates. The petitioners further argued that they had not yet filed returns in response to the notices under section 158BC, and thus, no tax liability existed at the time of applying for the certificates. They also highlighted that the accounts for the accounting year 1999-2000 were not yet finalized, making it unreasonable for the authorities to expect them to produce those details before the deadline for filing returns. The Department's advocate contended that denying the certificates was justified to prevent potential revenue loss from unpaid taxes determined in the block assessment. The court, after considering the arguments, held that the petitioners were not liable to pay any tax at the time of certificate refusal. Emphasizing that no tax demand existed, the court found no valid reason for the authorities to deny the certificates under section 230A of the Act. Citing the precedent in Gopal Industrial Estate v. ITO [1980] 123 ITR 727, the court ruled in favor of the petitioners, directing the authorities to issue the certificates within 15 days. The petitions were disposed of, with the rule made absolute in each petition, and no costs were awarded.
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