MASTER ADITYA KUMAR KEDIA Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) THE short point which arises for determination in this petition is whether the TRO was right in refusing to adjudicate upon the claim of the petitioner under r. 11 of the Second Schedule to the IT Act, 1961, on the ground that the AO has declared the gift deed dt. 2nd Dec., 1986, as void under s. 281 of the Act. The gift deed is in favour of the petitioner. It pertains to Flat No. 23, "Belle View", Bhulabhai Desai Road, Mumbai.

(2.) THE brief facts of the case are as under : The Tax Recovery Officer (TRO), Ward No. 24, Mumbai, vide order dt. 17th Nov., 1989, attached the above flat under Sch. II to the IT 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 dt. 31st March, 1994, addressed by the advocate on behalf of the petitioner to the AO, it was pointed out that the assessee has gifted the above flat to the petitioner herein under the gift deed dt. 2nd Dec., 1986. Accordingly, the petitioner called upon the AO to furnish a copy of the order attaching the flat. A similar letter was also addressed to the TRO calling upon him to forward the prohibitory order to the petitioner. By letter dt. 15th April, 1994, the petitioner forwarded to the TRO a copy of the gift deed, copy of the application made for membership to the society and copy of the computation of income and wealth -tax returns by the petitioner. However, by order dt. 11th Feb., 1993, the AO treated the gift as null and void under S. 281 of the IT Act. Hence, by letter dt. 12th Oct., 1994, the AO was requested to furnish to the petitioner details of the proceedings pending in the case of the assessee -Vinod Bhatia (donor) at the time of making the above gift on 2nd Dec., 1986, and the date of the filing of the return of Vinod Bhatia in order to enable the petitioner to ascertain the validity of the said order, dt. 11th Feb., 1993, passed under S. 281 of the Act. By letter, dt. 5th Jan., 1995, the AO informed the natural guardian of the petitioner herein that there was no provision under the IT Act to furnish information asked for in the above letter. By letter dt. 15th Feb., 1995, addressed by the TRO to the petitioner, it was stated that the gift of the flat is treated void under S. 281 of the IT Act by the AO and since the flat stands in the name of Vinod Bhatia, the petitioner was not entitled to be furnished with copies of the documents sought for by the petitioner. Being aggrieved by the order of the TRO, the petitioner preferred a petition under r. 86 of the Second Schedule to the appellate authority. By order, dt. 10th May, 1999, the appellate authority ruled that the decision of the TRO 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.

(3.) THE short point which arises for determination is : Whether the TRO was right in refusing to adjudicate the petitioner's claim/objection under r. 11 on the ground that the AO has declared the gift deed as void under S. 281 of the IT Act ?