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Judgment
AJOY NATH RAY, J.
The writ petitioners, hereinafter called Sashank are developers.
By different agreements they entered into contracts with the owners of the land in question, the Boses.
These were agreements for sale and development agreements.
Pursuant to these Sashank have built upon the land. They now proposed to sell the nine flats and there are already on the scene some six purchasers who have paid the money.
The writ application has arisen because on an application made by Sashank, the Income Tax Officer has refused to grant clearance u/s 230A.
The principal point of the Income Tax Officer has been that unless a clearance certificate is obtained by the Boses first, he is not minded to grant a clearance certificate to Sashank, the developer.
The case of Sashank in the writ petition has been that the Boses are still the legal owners of the land but they are under a compulsion to convey it to Sashank or their nominees who will be the flat owners.
Further, it is the case of Sashank that they are the constructors and, therefore, they are the persons interested in the building constructed upon the land.
Thus they say they are entitled to a clearance certificate irrespective of whether the Boses get it or not.
The further case of Sashank is that the Boses would not need any clearance u/s 230A for registration because the individual interest of the numerous Boses is each valued under Rs. 5,00,000.
Although this is the case in the writ petition, the application made in the prescribed form for obtaining clearance u/s 230A gives a different picture. There Sashank had claimed itself to be the legal owner in respect of the land and premises. They have described the Boses as equitable and beneficial owner, again in respect of the land and premises. The bifurcation of interest made in the writ petition is, therefore, absolutely different from the bifurcation made in the s. 230A form.
It is, therefore, impossible on this contrary stand to give the writ petitioners any relief.
However in the interest of all concerned it should be noted that the requirements of s. 230A are as follows :
(i) A document must be prospectively so in sight which requires registration u/s 17.
(ii) The person applying for clearance must be seeking to transfer some interest to or any property which he has; this is not necessarily immovable property; also it does not necessarily follow that if the applicants interest sought to be transferred were the sole subject-matter of a conveyance or assignment, it would have required registration u/s 17.
(iii) The value of the interest sought to be conveyed must exceed Rs. 5,00,000.
(iv) There might be several applicants, u/s 230A in respect of the same prospective document each applying to his own Income Tax Officer.
(v) The decision as to grant of s. 230A clearance must be taken by each Income Tax Officer independently or what course the other Income Tax Officer might take in regard to other assessees.
The above principles are not intended to be exhaustive, nor very exact, but are only laid down for the purpose of guidance on points of principle and understanding.
No relief is, therefore, granted on the writ petition. The writ petitioner will be entitled to apply afresh u/s 230A and if such application is made a decision will be taken thereon uninfluenced by the rejection already made.
It should also to borne in mind that it is in the interest of the Revenue so to construe s. 230A that the maximum number of persons require to get clearance and, therefore, have locus standi to apply for it.
It is also in the interest of the Revenue that transfers are not made without clearance of tax liability. It should also not be lost sight of, that persons without Income Tax liability who have engaged in some sort of productive economic activity should get certificate or other benefits if their applications are not tainted by any illegality.