R SURYA KUMARI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner, who is an assessee under the Income Tax Act, questions the order dated 10-12-1998 passed by the 1st respondent herein refusing to issue a certificate under Section 230-A of the income Tax Act and seeks a direction to the 1st respondent to issue the Clearance Certificate. There is also a further prayer to direct the 3rd respondent (Sub-Registrar, Dwaraka Nagar, Visakhapatnam) to register the sale deed that may be submitted by the petitioner. The impugned order dated 10-12-1998 reads as follows:

(2.) WE fail to understand how the certificate under Section 230-A can be withheld on the mere ground that the raid by ACB has brought to light certain material which have bearing on the source for investment of the property contemplated to be sold by the petitioner. It is clear from Section 230-A that the assessing Officer has to satisfy himself that the applicant has either paid or made satisfactory provision for payment of all "existing liabilities" under the Income Tax Act and other allied Acts or the registration of the document will not prejudicially affect the recovery of any existing liability under the various Acts mentioned in clause (a) of sub-section (1) of Section 230-A. Admittedly, there is no demand pending against the petitioner. There is no proceeding, either by way of re-opening or otherwise, pending in regard to the past years in which the tax relatable to the property in question is pending adjudication. The liabilities which may arise in the future in the event of the assessment proceedings being re-opened or revised are not within the contemplation of Section 230-A. The impugned order does not refer to any existing liability of the petitioner remaining unsatisfied or the recovery of the existing liability being prejudicially affected. The vague allegation that the proceedings initiated against the petitioner's husband under the Prevention of corruption Act by ACB has got some bearing on the investment of the property intended to be sold by the petitioner, does not, in our view, constitute a legitimate ground to refuse a Certificate under Section 230-A. Moreover, the second reason mentioned in the impugned order that the Anti-Corruption Bureau requested him not to accord permission for sale or transfer of property, is an irrelevant ground. The mere request by the Anti-Corruption Bureau officials does not absolve the respondent No. l of the statutory obligation to apply his mind independently with reference to the criteria laid down in clauses (a)and (b) of Section 230-A (1 ).

(3.) THE learned Standing Counsel for the Department relied on the observations made by the Supreme Court in Bihari Lal Jaiswal v. Commissioner of Income Tax, ITR 1996 746. That was a case in which the assessee applied for registration of a partnership firm which was constituted contrary to the prohibition laid down in Excise law. The individual licence holder wanted to form a partnership soon after the licence was granted to him. Their Lordships of the Supreme Court observed that when the law prohibits the entering into a particular partnership agreement, there can be in law no partnership agreement. Repelling the argument that the provisions of the Excise Law cannot be imported while considering the application for registration filed under the Income Tax Law, the learned Judges observed as under: