1975 (7) TMI 62 - HC - Income Tax

Summary

Issues:
1. Effect of section 47 of the Registration Act on the Transfer of Property Act.
2. Jurisdiction of competent authority under section 269C of the Income-tax Act.
3. Interpretation of the definition of "instrument of transfer" under section 269A(f) of the Income-tax Act.

Analysis:
The judgment by CHINNAPPA REDDY J. delves into the interplay between the Registration Act and the Transfer of Property Act. The petitioner contended that the sale deed took effect from the date of execution, relying on section 47 of the Registration Act and precedents like Kalyanasundaram Pillai v. Karuppa Mooppanar. However, the court examined the impact of section 47 on section 54 of the Transfer of Property Act. The court cited cases like Sadei Sahu v. Chandramani Dei and Thirumagaral Mudaliar v. Muruga Pillai, which held that a transfer by a registered instrument relates back to the date of execution, affecting third-party rights. This conflicted with the Supreme Court's stance in Ram Saran Lall v. Domini Kuer, emphasizing that registration finalizes a sale, not execution alone.

Regarding the jurisdiction of the competent authority under section 269C of the Income-tax Act, the court noted that the statutory right to acquire property for undervaluation arose between execution and registration. The court rejected the petitioner's argument that the transfer was complete on execution, as section 269C intervened post-execution. The definition of "instrument of transfer" in section 269A(f) was pivotal, encompassing registered instruments. The court aligned with the Delhi High Court's view in Mahavir Metal Works P. Ltd. v. Union of India, emphasizing that the Act applied to transfers completed by registration post-November 15, 1972.

Ultimately, the court dismissed the writ petition, upholding the application of section 269C to the transfer in question. The judgment clarified that registration finalizes a transfer, impacting third-party rights, and statutory provisions like section 269C can affect transfers completed post their enactment. The interpretation of the definition of "instrument of transfer" played a crucial role in determining the applicability of the Income-tax Act provisions to the case at hand.