V.C. Senthilkumar vs The Commissioner of Income Tax, The Tax Recovery Officer and M. Loganathan

M. Jaichandren, J.—The Petitioner has stated that he is an agreement holder of an agreement for sale, in respect of the property, in Survey

No. 111/B, situated at Bharathidasan Street, Veerappan Chathiram, Erode, belonging to the third Respondent. It has been further stated that the

Petitioner had entered into an agreement for sale with the third Respondent, in respect of the property in question, after having found from the

office of the Sub Registrar concerned that there was No. encumbrance in respect of the said property. The Petitioner had entered into an

agreement with the third Respondent and his son, on 2.5.2007, having paid an advance of Rs. 5,00,000/-. Thereafter, the Petitioner had paid a

further sum of Rs. 10,00,000/-to the third Respondent, as part of the sale consideration. While so, the Petitioner had come to know that the

property in question, belonging to the third Respondent, had been attached by the income tax department, due to the non payment of tax arrears

by the third Respondent. The request made by the Petitioner to release the property in question from attachment had been rejected by the order of

the second Respondent, dated 22.1.2010. In such circumstances, the Petitioner has preferred the present writ petition before this Court, under

Article 226 of the Constitution of India.

The learned Counsel appearing on behalf of the Petitioner had submitted that the impugned order of the second Respondent, dated 22.1.2010,

is arbitrary and void. The second Respondent had passed the impugned order, without considering the fact that the Petitioner had entered into an

agreement for sale, with the third Respondent, in respect of the property in question, only after proper verification of the encumbrance, created in

respect of the said property. The agreement had been entered into only after it was found that there was No. encumbrance, in respect of the said

property.

It had also been stated that the Petitioner had paid the full consideration to the third Respondent for the purchase of the property in question in

the year 2007 itself, as per the sale agreement, dated 2.5.2007. Thereafter, the Petitioner has been in continuous possession and enjoyment of the

property in question, till date. While so, the Tax Recovery Officer, Range-I, Erode, had issued an order of attachment of the property in question,

due to the non payment of the tax arrears, by the third Respondent, to the tune of Rs. 1,76,00,957/-, even though the third Respondent is owning a

number of other immovable properties, including a shopping complex, worth several crores of rupees. The Petitioner should not suffer due to the

non payment of the tax arrears by the third Respondent.

The learned Counsel for the Petitioner had also submitted that No. notice had been issued to the Petitioner and No. opportunity had been given

to him even though he is a bona fide agreement holder, in respect of the property in question. In such circumstances, the impugned order of the

second Respondent is liable to be set aside.

The learned Counsel appearing on behalf of the Petitioner had relied on the following decisions in support of his contentions:

1) The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, .

2) Ashok Chawla v. DIT (2009) 176 Tax man 202 (Del)

3) Vishwanath Agarwala v. TRO (2009) 182 Taxman 327;225 CTR (Cal.) 358

4) Jagdish Sharma v. UOI 2008 (217) CTC (Raj.) 472

5) Samson John v. TRO (2008) 169 Taxman 227/6300 188 (Bom.)

The learned Counsel appearing on behalf of the first and the second Respondents had submitted that the Petitioner has No. locus standi to

maintain the present writ petition. A notice had been issued to the third Respondent, under Rule 2 of the Second Schedule of the Income Tax Act,

1961, dated 6.11.2001, directing him to pay the tax arrears of Rs. 1,76,00,957/-. As the third Respondent had failed to discharge his liability his

property, in S. No. 111/B, had been attached, by an order, dated 15.11.2007, issued under Rule 48 of the Second Schedule to the Income Tax

Act, 1961, and it had been served on the third Respondent, on 16.11.2007.

He had also submitted that as per Rule 51 of the Income Tax Rules 1962, the attachment of an immovable property would relate back to the

date on which the notice to pay back the arrears had been served on the defaulter. Thereafter, an alienation of the property in question by the

defaulter, would be void, as per Rule 16 of the Income Tax Rules,1962. In such circumstances, it is not open to the Petitioner to claim that the

attachment of the property of the third Respondent is illegal and void. When the third Respondent had not agitated the matter, in the manner known

to law, it is not open to the Petitioner to approach this Court by filing a writ petition, under Article 226 of the Constitution of India. Therefore, the

writ petition filed by the Petitioner is devoid of merits and therefore, it is liable to be dismissed, in limine.

In view of the averments made in the affidavit filed support of the writ petition and in view of the submissions made by the learned Counsels

appearing on behalf of the parties concerned and on a perusal of the records available and on considering the decisions cited by the learned

Counsel for the Petitioner, this Court is of the considered view that the Petitioner does not have the locus standi to maintain the present writ

petition. The attachment of the property in question by the concerned authorities of the Income Tax Department, which had been made in

accordance with the procedures established by law, cannot be questioned by the Petitioner, who is said to be an agreement holder, in respect of

the property in question.

The agreement for sale, said to have been entered into by the Petitioner with the third Respondent, cannot bind the Respondents 1 and 2, as

they are not parties to the said agreement. Further, the Petitioner has not been in a position to show that the third Respondent had agitated the

matter, before the appropriate forum or authority, in accordance with the relevant provisions of law. The Petitioner cannot be said to be an

aggrieved party, at this stage. However, it goes without saying that it would be open to the Petitioner to agitate the matter against the third

Respondent, before the appropriate forum, in the manner known to law. As such, it is clear that the writ petition is devoid of merits. Hence, it is

dismissed. No. costs. Consequently, connected miscellaneous petition is closed.