B SREEDHARAN NAIR Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITIONER challenges the attachment proceedings initiated against the properties gifted by the 5th respondent-father. The case of the petitioner is that property belonging to the 5th respondent was transferred on 10th July, 1989, with the knowledge of the order of assessment and, therefore, it is submitted that towards the gift tax arrears properties gifted to the petitioner are not liable.

(2.) THE 4th respondent, TRO has filed a counter wherein it is averred that to the knowledge of the respondents, the 5th respondent has no other property. the property item No. 7 in Ext. P1 has already been sold to Sri. Karunakaran Nair and his wife Vijayakumari. The sale was executed before the service of attachment notice under r. 2 of the Second Schedule to the IT Act, 1961. Even then, this property was also attached by the issue of ITCP-16 for avoiding further alienation. By virtue of S. 29 of the GT Act, the gift-tax may be recovered from the donee, if in the opinion of the GTO, the tax cannot be recovered from the donor. In the light of this specific provision and the finding that the donor has no other property, the proceedings of the 4th respondent cannot be questioned. However, the 3rd and 4th respondents are given liberty to proceed against item No. 7, namely, 59 cents of land at survey No. 2231 of Aarmadda village which was transferred subsequent to the assessment order, initially in accordance with law and if the 3rd and 4th respondents find that the gift-tax cannot be recovered from the said property, it is open to them to proceed against item 1 to 4, 8 to 13 and 15 of Ext. P1.