Clause 296 - Certain transfers to be void. - Direct Taxes Code, 2010

Certain transfers to be void. 296. (1) If a person creates a charge on, or transfers, any of his assets in favour of any other person during the pendency of any proceeding under this Code or after the completion thereof, then, such charge on, or transfer of, any asset by him in favour of the other person, shall be void as against any claim in respect of any sum payable by him under this Code. (2) The charge, or transfer, referred to in sub-section (1) by a person shall not be void, if it is made— (a) for adequate consideration and without knowledge of the pendency of such proceeding or of any such sum payable by the person; (b) with the previous permission of the Assessing Officer. (3) This section applies to cases where the amount of tax or other sum payable, or likely to be payable, under this Code exceeds five thousand rupees and the assets charged or transferred exceeds ten thousand rupees in value. (4) In this section, "asset" shall not include any business trading asset.