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Issues: Challenge to communication declaring property transfer as invalid under Income-tax Act, validity of notice served on defaulter, dispute resolution mechanism under rule 11(6) of Income-tax Act.
In the judgment delivered by Justice K. Balakrishnan Nair, the petitioner, as the transferee of a property covered by a sale deed, challenged a communication issued by the first respondent declaring the transfer invalid due to the fourth respondent's default to the Income-tax Department. The communication, exhibit P-7, stated that any transfer made after the defaulter was served with a notice is void. The petitioner argued that there was no evidence to show the notice was served before the sale deed was executed in 2004, despite an agreement made in 1993 and payment of the entire consideration by 2000. The fourth respondent, in a counter-affidavit, claimed the default notice was served only in 1997, while the agreement was from 1993. The court noted that the facts in dispute would be better addressed in a suit under rule 11(6) of the Income-tax Act rather than in a writ petition under Article 226 of the Constitution of India. Consequently, the writ petition was dismissed without prejudice to the parties' contentions, allowing the petitioner to pursue remedies under rule 11(6) of the Act. The judgment underscores the importance of following the appropriate dispute resolution mechanisms provided under the law for matters involving tax defaults and property transfers, ensuring a fair and comprehensive adjudication of the issues involved.
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