PALANPUR TRADERS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) SYSTEM Communications had purchased a flat bearing No. 131 on the 13th floor in Maker Tower B, Cuffe Parade, Bombay, on November 6, 1983. The said concern had loan and/or overdraft transactions with the Bank of Madurai. The bank filed Suit No. 2626 of 1983 in this Court against the said concern. On a notice of motion at the instance of the bank, a receiver was appointed to take possession of the flat. On August 29, 1986, there was a compromise between the Bank of Madurai and the said concern. Consent terms were filed on August 29, 1986, in terms of which the said concern was to pay Rs. 60,00,000 to the Bank of Madurai with liberty to dispose of the suit flat.

(2.) ON September 12, 1986, the said concern applied to Maker Tower and B Flat Owners Association for the transfer of the flat in favour of Palanpur Traders Ltd., the petitioners herein. A photocopy of this Court's order giving permission to it to sell the aforesaid flat was attached thereto. On September 27, 1986, the petitioners and the said concern entered into an agreement for sale of the flat in question : (Exhibit D, page 47 of the paper book). The agreement, inter alia, refers to the fact that the suit flat was at one stage under a warrant of attachment dated June 13, 1986, from the IT Department and that the said warrant of attachment was lifted by a subsequent order passed by the ITO dated September 26, 1986. On the date of the agreement, i.e., on September 27, 1986, the said concern and the petitioners sent a statement in Form No. 37EE (r. 48DD) to the office of the Competent Authority as required under S. 269AB(2) of the IT Act, 1961. This statement was received in the office of the Competent Authority on September 30, 1986. Statement in Form No. 37 1 (under r. 48 1) as required under S. 269UC of the IT Act, 1961, was filed with the IT Department on October 14, 1986. A no objection certificate under S. 269DD of the IT Act, 1961, was issued by the Competent Authority to the petitioners on January 21, 1987.

(3.) REFERRING , inter alia, to the facts such as that the flat was sold by the said concern during the pendency of assessment proceedings for some years and that the demand in respect of some other years was outstanding, the IAC passed the impugned order dated December 4, 1987, holding that the sale of the flat to be void under S. 281 ( 1 ) of the IT Act, 1961.