9911796707
TMI Blog2000 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... hai Desai Road, Mumbai. The brief facts of the case are as under : The Tax Recovery Officer (TRO), Ward No. 24, Mumbai, vide order dated November 17, 1989, attached the above flat under schedule II to the Income-tax Act, 1961, on account of tax arrears outstanding in the case of the assessee by name Vinod Bhatia. The attachment has since been continued. By letter dated March 31, 1994, addressed by the advocate on behalf of the petitioner to the Assessing Officer, it was pointed out that the assessee has gifted the above flat to the petitioner herein under the gift deed dated December 2, 1986. Accordingly, the petitioner called upon the Assessing Officer to furnish a copy of the order attaching the flat. A similar letter was also address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht for by the petitioner. Being aggrieved by the order of the Tax Recovery Officer, the petitioner preferred a petition under rule 86 of the Second Schedule to the appellate authority. By order dated May 10, 1999, the appellate authority ruled that the decision of the Tax Recovery Officer was conclusive and the only remedy of the petitioner is to institute a suit and the appeal was misconceived. Hence, the appeal came to be dismissed. Being aggrieved by the said order, the present petition has been filed. Mr. Sathe, learned counsel appearing on behalf of the assessee, contends that on the petitioner coming to know that the flat in question stood attached, the petitioner moved the Tax Recovery Officer with a request to furnish to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for determination is : Whether the Tax Recovery Officer was right in refusing to adjudicate the petitioner's claim/objection under rule 11 on the ground that the Assessing Officer has declared the gift deed as void under section 281 of the Income-tax Act ? In the case of Gangadhar Vishivanath Ranade (No. 1) v. ITO [1989] 177 ITR 163 (Bom), the question regarding the scope, validity and operation of section 281 of the Income-tax Act arose for determination. In that matter, the facts were as follows. The assessee was doing business., His assessments for the years 1962-63 to 1964-65 were reopened. The assessee had executed a mortgage in favour of a bank on December 2, 1967, after obtaining a certificate from the Income-tax Department und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or intention by the Income-tax Officer expressed under section 281. That the adjudicatory process under rule 11 still survives and can be availed of by the claimant to claim that the transfer was not made during the pendency of proceedings. Therefore, it has been held that section 281 merely declares the intention of the Assessing Officer. It is merely a step to recover the dues of the State from the defaulter. That the jurisdiction of the Tax Recovery Officer under rule 11 is not taken away by the expression of any opinion or intention of the Assessing Officer expressed under section 281 of the Income-tax Act. In the case of the TRO v. Gangadhar Viswanath Ranade [1998] 234 ITR 188 (SC), the facts were as follows. The assessee was asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that the proceedings taken pursuant to the declaration by the Assessing Officer under section 281 was a mere prelude to the procedure for the recovery of tax and that the order under section 281 did not. in any way, affect the rights of the parties pertaining to the said properties, which could be considered under the proceedings under rule 11. By order dated September 17, 1981, the Tax Recovery Officer in the proceedings under rule 11 overruled the objections filed by the assessee, his wife and his daughter and declared the mortgage and the trust deed as also the conveyance as void. This order was challenged by a writ petition. The High Court upheld the contention of the claimants that the Tax Recovery Officer had no power unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not have examined whether the transfer was void under section 281 of the Income-tax Act and, therefore, his adjudication in that regard was without jurisdiction. That the declaration under section 281 cannot affect, in any event, the legal rights of the parties under rule 11, That the Department cannot proceed on the assumption that the transaction is void under section 281. In the present case, the petitioner claims to be in possession of the property in his own right under the gift deed. According to the petitioner, the donor was not in arrears of taxes when the order dated February 11, 1993, came to be passed. The petitioner has not filed an application under rule 11 till today. However, he has sought 'inspection of the documents f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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