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Interpretation of section 230A of the Income-tax Act regarding the requirement of a tax clearance certificate for registration of property conveyance valued over Rs. 2 lakhs under the Indian Registration Act. Analysis: The case involved a dispute regarding the necessity of an income-tax clearance certificate under section 230A of the Income-tax Act for the registration of a property conveyance valued over Rs. 2 lakhs. The petitioners, heirs of the deceased property owner, argued that as per the Hindu Succession Act, each heir inherited a quantified share of the property, making them individual owners of specific shares not exceeding Rs. 2 lakhs each. They contended that the requirement of a tax clearance certificate should not apply in their case. The petitioners relied on a precedent where it was held that individual owners of definite shares in property could transfer their shares without needing a tax clearance certificate if the value of each share was less than Rs. 10 lakhs. The total value of the property in question was Rs. 5,25,000, and each heir inherited a share less than Rs. 2 lakhs, making the tax clearance certificate unnecessary. The Additional Government Pleader argued that the property conveyance document presented for registration transferred the right, title, and interest of the vendors in a property valued over Rs. 2 lakhs, necessitating the production of a tax clearance certificate under section 230A of the Income-tax Act. However, the petitioners contended that the requirement of the tax clearance certificate should not apply to them as each heir inherited a specific, quantified share of the property, and the combined value of their shares did not exceed Rs. 2 lakhs. The court agreed with the petitioners, emphasizing that each heir was a complete owner of a quantified share not liable for fluctuation and that the value of each share was less than Rs. 2 lakhs due to the total property value being Rs. 5,25,000. Therefore, the court held that the direction to produce an income-tax clearance certificate was not justified, and the property conveyance document should be registered without such a certificate. The writ petition was allowed accordingly, with no costs imposed.
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