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Issues involved: Interpretation of the effective date for exercise of powers under section 269C of the Income Tax Act, 1961.
Summary: The High Court of Bombay heard an appeal regarding the timing of when the Competent Authority can exercise powers under section 269C of the Income Tax Act, 1961. The petitioner argued that the effective date for exercising these powers should be the date of execution of the document, not the date of registration. However, this argument was rejected based on previous decisions by the Delhi High Court and the Andhra Pradesh High Court. Both courts had ruled that the transfer of immovable property is considered to be effected only upon registration of the instrument of transfer. In Mahavir Metal Works P. Ltd. v. Union of India, the Delhi High Court upheld the requirement for registration for a transfer of property under Chapter XX-A of the Income Tax Act, 1961. Similarly, the Andhra Pradesh High Court in Divvi Suryanarayana Murthy v. Competent Authority held that the date of registration is crucial, even if the sale deed was executed before the introduction of relevant provisions in the Income Tax Act. The High Court of Bombay emphasized the importance of accepting decisions by other High Courts on similar points when interpreting and applying central enactments like the Income Tax Act, 1961. Therefore, the decision of the learned single judge was upheld without any infirmity. The appeal was dismissed with costs, and it was noted that interim injunction granted earlier had led to a complex situation where the property sought to be acquired may have undergone changes. The Court stated that any rights acquired by third parties due to the petitioner's actions would be a matter between them, and appropriate orders should have been made earlier. The Court also granted a certificate under Article 132 of the Constitution of India due to the substantial question of law involved in the case.
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