2014 (5) TMI 230 - HC - Income Tax

Recovery of arrears from third party - Revenue Proceeded against the property Held that - The petitioner is not an assessee nor is he indebted to the Income Tax Department - The property purchased by the subsequent purchaser in the year 2006 could only be the remaining property after the purchase effected by the petitioner in the year 2002 - it is always open for the concerned respondents to proceed against the said extent, without touching the property owned, possessed and enjoyed by the petitioner - the petitioner is set at liberty to approach the second respondent/Tax Officer, Range-I, by filing a proper application(stay petition) in this regard Decided in favour of Assessee.

Summary

Issues: Attempt to proceed against petitioner's property for arrears owed by a third person

The judgment in question deals with a writ petition challenging the attempt of the respondents to proceed against the property of the petitioner covered by a sale deed in connection with arrears owed by a third person. The petitioner had purchased a property in 2002, and subsequently, the remaining extent of the seller's property was sold to another person who had tax arrears. The petitioner approached the court as his property was included in the sale proclamation to be auctioned. The petitioner had obtained mutation in his name, possession certificate, basic tax receipt, and encumbrance certificate, establishing his ownership and possession of the property. The court noted that the petitioner was not indebted to the Income Tax Department, and the proceedings were against the defaulter who purchased the property after the petitioner. The court held that the respondents could proceed against the property purchased by the defaulter in 2006 without affecting the property owned by the petitioner. Another person in a similar situation had successfully excluded their property from attachment by the Tax Officer. The court granted the petitioner liberty to approach the Tax Officer with relevant documents within two weeks to seek appropriate remedies, and the confirmation of the sale was subject to the Tax Officer's final decision. The writ petition was disposed of accordingly.