K.A. Sudesh and Others vs Deputy Commissioner of Income Tax and Another

A.S. Venkatachala Moorthy, J.—The present original petition has been filed questioning the correctness of the order passed by the Deputy Commissioner of Income Tax (Assessment), Special Range, Trivandrum (first respondent), dated December 1, 1995, a copy of the same is marked as exhibit P-8.

The second respondent, which is a private limited company, proposed to sell some property in favour of the petitioners herein. As the sale consideration exceeded rupees two lakhs, as required u/s 230A of the Income Tax Act, 1961, an application was made for the issuance of the certificate which alone would enable the parties to get the document registered. In this case, the application was made by the petitioners. In the order dated December 1, 1993, the first respondent has expressed his inability to issue a certificate u/s 230A unless all the legal requirements for issue of the same are satisfied by the second respondent. Aggrieved by this, the present original petition has been filed.

Learned counsel appearing for the first respondent would submit that the person who has to apply for such a certificate in any transaction is only the transferor and not the transferee. But, in this case, the application was made by the transferee. In view of that, the respondents did not issue such certificate.

Now, before this court, learned counsel for the petitioners submits that the impugned order is liable to be set aside on the simple ground that the first respondent in passing such an order has not assigned any reason. Of course, there is some substance in the contention raised by the petitioners'' counsel. But, at the same time, this court has to take note of the legal position, namely, that the person who has to apply for a certificate u/s 230A of the Income Tax Act is only the transferor and not the transferee.

It is open to the transferor, namely, the second respondent, to make an application as stipulated u/s 230A of the Income Tax Act before the first respondent. Once such an application is made, the first respondent shall dispose of the same on merits and as per the provisions of the Income Tax Act.

The original petition is disposed of as above.