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TMI Blog2019 (7) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the assessment years 1974-75 to 1999-00. Mr. Sudhir L. Hendre expired on 3.3.2003. His wife Manik S. Hendre expired on 5.7.2008. According to the petitioner, the said assesses had died intestate. Their properties, therefore, would devolve by intestate succession as per governing laws. The deceased couple had left behind one daughter and two sons. Both the sons predeceased the petitioner's grandparents. The daughter is still alive. The petitioner is a daughter of Jagdish S. Hendre, one of the sons of the assessees who died on 23.11.1977. The petitioner, therefore, claims her share in the properties left behind by the said assesses as daughter of a predeceased son. 3. It appears that the said assesses had left behind six immovable properties, some of them are tenanted. Five out of six properties were placed under attachment by the Income Tax Department for unpaid dues on 19.8.1997. The sixth one was attached on 2.4.1997. The Income Tax Department received the rent of the tenanted properties after the same were placed under attachment. However, such rent was meager and would not cover even a small portion of sizable tax dues of the assesses. The Income Tax Department, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attachment. Said rent is also not accounted for; (iii) The Department has not given any break-up of the outstanding dues without which it is not possible for the petitioner and other heirs of the deceased assesses to verify the tax dues; (iv) The Department itself had issued 'no due certificate' on 23.3.1984 which would imply that till such date, the deceased had no tax dues and lastly, (v) The sale proclamation is hit by period of limitation prescribed in Rule 68B of the Second Schedule to the Income Tax Act, 1961 ("the Act" for short). 4. We have heard the learned counsel for the parties at considerable length on the fundamental question of sale proclamations being barred by limitation as prescribed in Rule 68B of the Schedule II. In view of our answer to this issue, we have not examined the petitioner's other grievances leaving it open to be urged in future if need so arises. 5. In the context of such facts, learned counsel for the petitioner took us extensively through the provisions contained in Schedule II referring to recovery of unpaid tax. In particular, our attention was drawn to Rule 68B which was inserted by the Finance Act, 1992 w.e.f. 1.6.1992. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tax Recovery Officer may draw up a statement in the prescribed form specifying the amount of arrears due from the assessee and shall proceed to recover the amount so specified by one or more of the modes mentioned in clauses (a) to (d) thereof in accordance with the rules laid down in IInd Schedule. One of these modes is attachment and sale of the assessee's immovable property. 8. Schedule II to the Act pertains to the procedure for recovery of tax. The Schedule contains detail rules for recovery of unpaid taxes through various modes envisaged in sub-section (1) of Section 222 of the Act. Part III of Schedule II pertains to attachment and sale of immovable property. Rule 48 contained in the said part provides that attachment of the immovable property of the defaulter shall be made by an order prohibiting the defaulter from transferring or charging the property in any way and prohibiting all persons from taking any benefit under such transfer or charge. Under Rule 49, a copy of the order of attachment shall be served on the defaulter. As per Rule 50, the order of attachment shall be proclaimed at some place on or adjacent to the property attached. Rule 51 provides that whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty, a sum equal to 5% of the purchase money. Rule 63 pertains to confirmation of sale. Sub-rule (1) thereof provides that where no application is made for setting aside the sale or whether such an application is made and disallowed, the Tax Recovery Officer shall (if the full purchase money has been paid) make an order confirming the sale and thereupon the sale would become absolute. As per sub-rule (2) of Rule 63 however, where such application is made and allowed and in case of an application to set aside the sale on deposit of the amount and penalty and other charges is made within the time prescribed, the Tax Recovery Officer would make an order setting aside the sale. Under Rule 65, the Tax Recovery Officer would issue a Sale Certificate of the immovable property specifying the property sold and the name of the person who is declared to be the purchaser. 10. This is broadly the scheme for attachment and sale of immovable property of an assessee in default. Rule 68B which is at the center of the controversy was inserted by the Finance Act, 1992 w.e.f. 1.6.1992 and reads as under:- "68B.(1) No sale of immovable property shall be made under this Part after the expiry of thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l year in which the order giving rise to a demand of tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has become conclusive under the provisions of Section 245-I or Chapter XX of the Act which deals with the appeals and revisions. Proviso to sub-rule (1), however, gives some leverage in case where the immovable property is required to be sold due to the fact that the highest bid is less than the reserve price or where the case falls under Rule 57 or Rule 58 or the same is set aside under Rule 61. In such a case, the period of limitation of sale would stand extended by one year. Sub-rule (2) of Rule 68B provides for exclusion of certain periods while computing the period of limitation. Sub-rule (3) makes special provision for cases where the immovable property is attached before 1.6.1992 and the order giving rise to the demand of tax, interest etc has also become conclusive and final before the said date. In such a situation, the period of limitation as referred to in sub-rule (1) would commence from 1.6.1992. This sub-rule, thus, makes it clear that the limitation provided under sub-rule (1) for sale of immovable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-rule (1), the legislature has now provided for the first time w.e.f. 1.6.1992 a time limit of a period of three years for sale of attached immovable property starting from the end of financial year in which the order giving rise to a demand of tax, interest etc has become conclusive. Sub-rule (4) of Rule 68B provides for the consequences of the immovable property not being sold within such time. As per this sub-rule in such a situation, the attachment order in relation to the said property would be deemed to have been vacated on the expiry of the time limit specified. In the present case, Rule 68B would apply with full force. The attachment of the said immovable properties was ordered way back in the year 1997. The sale proclamation which was made in February, 2019 was thus, hit by the period of limitation prescribed under such Rule. By virtue of sub-rule (4) of Rule 68B therefore, upon completion of the period of limitation, the attachment would be deemed to have been vacated. The auction sale, therefore, could not have been carried out. 13. The learned single Judge of the Madras High Court in the decision in the case of V. Rajendran (supra) had on similar grounds set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also is deemed to have been vacated." 15. The Division Bench of this Court in the decision in the case of M.U. Joshi (supra) in reference to Rule 68B of Schedule II had held and observed as under:- "17. In this view of the matter, in the facts of the case, we are of the opinion that the limitation for sale of the attached immovable property commenced from 15.6.1994 and not from 19.5.1998 as erroneously contended by the revenue. Once it is held that the limitation under Rule 68B commences from 15.6.1994, then, the sale held on 30.3.2004 being beyond the period of limitation prescribed under 68B becomes invalid. The contention of the revenue that the petition suffers from delay is without any merit because, even before the sale was completed the petitioner had raised the point of limitation, but the same was rejected and the sale was confirmed. The writ petition was filed immediately thereafter on 31.5.2004 and, therefore, it cannot be said that the petition suffers from delay. 18. Accordingly, the petition succeeds. The sale of the immovable property held on 30.3.2004 beyond the period of limitation prescribed under rule 68B of the Second Schedule of the I.T. Act is quashed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e our discretion under Article 226 in favour of a person who refuses to pay his admitted taxes. The petition is dismissed. Interim order is vacated." The crux of the judgment, therefore is that the Court was not inclined to exercise discretionary writ jurisdiction in favour of the petitioner since in the opinion of the Court, the petitioner failed to show equity in his favour. In the judgment, of course, the Court has observed that Rule 68B of the IInd Schedule would not apply to the certificates issued prior to 1.6.1992. To this extent, we are unable to persuade ourselves to follow the same line. Sub-rule (3) of Rule 68B makes it clear that the limitation prescribed under sub-rule (1) would apply also to past instances, with necessary modification provided therein which we have already discussed earlier. 18. The consent given by the petitioner to sale the properties will not prevent her from pursuing their petition. Firstly, it was not an unconditional consent. In her letter dated 23.1.2019, she had raised the issue of owner charging of interest and or no-due certificate issued in the past. Her consent was thus subject to these objections. Further, the question of limitation wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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