1971 (3) TMI 9 - HC - Income Tax

Items Nos. 14 and 17 in Form 34A are to be found in a completed document referred to as the document in section 230A - Items 14 and 17 of Form No. 34A in Appendix II to Income-tax Rules, 1962 are not ultra vires of section 230A - a writ of certiorari cannot be issued - writ petition is dismissed

Summary

Issues:
Interpretation of section 230A of the Income-tax Act, 1961 regarding the requirement of tax clearance certificate for property transfers exceeding Rs. 50,000. Validity of items 14 and 17 in Form 34A under rule 44A of the Income-tax Rules, 1962 in relation to section 230A.

Analysis:
The petitioner entered into an agreement for the sale of a property exceeding Rs. 50,000, necessitating a tax clearance certificate under section 230A of the Income-tax Act, 1961. The petitioner contended that he should be entitled to the certificate without filling certain items in Form 34A, specifically items 14 and 17, arguing they were ultra vires of section 230A. However, the court noted that section 230A aims to prevent registration of property transfers without ensuring tax liabilities are met, providing a double safeguard for revenue purposes. The court emphasized that items 14 and 17 in Form 34A, requiring details of the transferee and registering officer, were essential elements typically included in property transfer documents falling under section 230A's purview.

The court highlighted that the Income-tax Officer must assess not only tax liabilities but also potential prejudicial effects on revenue before issuing a certificate. Given the necessity for the officer to review the document subject to registration, items 14 and 17 were deemed crucial components of Form 34A. The court concluded that these items were not ultra vires of section 230A, as they aligned with the requirements of property transfer documents falling under the section's ambit. Consequently, the court dismissed the petitioner's plea for a writ of certiorari and upheld the validity of items 14 and 17 in Form 34A under rule 44A.

In another petition seeking a writ of mandamus to compel the Income-tax Officer to issue the certificate, the court reiterated that there was no statutory obligation for the officer to do so if the application did not adhere to the prescribed procedure. As the petitioner failed to fulfill the procedural requirements, the court discharged the rule nisi and dismissed the writ petition. Overall, the judgment clarified the importance of complying with the prescribed process for obtaining tax clearance certificates under section 230A and upheld the validity of Form 34A's requirements, including items 14 and 17, in ensuring proper assessment of property transfers exceeding Rs. 50,000.