2011 (4) TMI 843 - HC - Income Tax

Agreement for sale - Agreement holder - maintainability of appeal - Held that - The agreement for sale, said to have been entered into by the petitioner with the third respondent, cannot bind the respondents 1 and 2, as they are not parties to the said agreement - Further, the petitioner has not been in a position to show that the third respondent had agitated the matter, before the appropriate forum or authority, in accordance with the relevant provisions of law - The petitioner cannot be said to be an aggrieved party, at this stage - However, it goes without saying that it would be open to the petitioner to agitate the matter against the third respondent, before the appropriate forum, in the manner known to law - As such, it is clear that the writ petition is devoid of merits - This Court is of the considered view that the petitioner does not have the locus standi to maintain the present writ petition hence, it is dismissed.

Issues:
1. Validity of the impugned order of attachment by the Income Tax Department.
2. Locus standi of the petitioner to maintain the writ petition.
3. Legality of the agreement for sale between the petitioner and the third respondent.

Issue 1: Validity of the Impugned Order of Attachment
The petitioner, an agreement holder, claimed that he entered into an agreement for sale with the third respondent after verifying the encumbrances on the property. The petitioner contended that the order of attachment by the Income Tax Department was arbitrary and void as he had paid the full consideration for the property and was in possession. The petitioner argued that the attachment should be released as the third respondent owned other valuable properties and the petitioner should not suffer due to the tax arrears of the third respondent. The petitioner alleged that no notice was issued to him, and he was not given an opportunity despite being a bona fide agreement holder. The petitioner sought relief under Article 226 of the Constitution of India.

Issue 2: Locus Standi of the Petitioner
The respondents argued that the petitioner lacked the locus standi to maintain the writ petition. They contended that the property attachment was in accordance with the Income Tax Act and Rules, and the petitioner could not challenge it. The respondents highlighted that the third respondent was duly notified of the tax arrears and the subsequent property attachment. They emphasized that the petitioner, not being a party to the tax dispute, could not question the attachment. The court agreed with the respondents, stating that the petitioner could not establish himself as an aggrieved party and should address any grievances against the third respondent through appropriate legal channels.

Issue 3: Legality of the Agreement for Sale
The court found that the agreement for sale between the petitioner and the third respondent did not bind the tax authorities as they were not parties to the agreement. The court emphasized that the petitioner failed to demonstrate that the third respondent had challenged the tax arrears issue through legal means. Consequently, the court dismissed the writ petition, stating that the petitioner could pursue the matter against the third respondent through proper legal avenues. The court held that the petitioner's claim lacked merit, and the attachment of the property was lawful as per established legal procedures.

In conclusion, the court dismissed the writ petition, ruling that the petitioner lacked the standing to challenge the property attachment by the Income Tax Department and that the agreement for sale did not affect the tax authorities' actions. The judgment underscored the importance of following legal procedures and established forums to address grievances, emphasizing that the petitioner could pursue remedies against the third respondent through appropriate legal channels.

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