| Case ID |
2e1e9501-55fd-42ec-a0b2-f2604557a668 |
| Body |
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| Case Number |
D-2741 of 2016 |
| Decision Date |
Aug 19, 1992 |
| Hearing Date |
Aug 19, 1992 |
| Decision |
The Karnataka High Court ruled that a person who has entered into an agreement to purchase an immovable property that has been attached under the provisions of the Income-tax Act, 1961 is not competent to invoke rule 61 and cannot seek to set aside the sale of the property. The court held that the attachment of the property relates back to the date when the notice to pay arrears was issued, which in this case was prior to the agreement to purchase. Consequently, the agreement did not confer any rights upon the purchaser, as the defaulter was incompetent to deal with the property in any manner while it was under attachment. The court emphasized that rights and liabilities created by statutory provisions must be adhered to, and a person cannot indirectly challenge statutory proceedings through writ jurisdiction if they are ineligible to invoke the relevant rules. Thus, the single judge's order was upheld, affirming the Recovery Commissioner's finding. |
| Summary |
In the landmark case decided by the Karnataka High Court regarding the Income-tax Act, 1961, the court examined the implications of rule 61 concerning the sale of immovable property attached due to tax arrears. The case arose when a buyer, D, entered into an agreement to purchase a property from a defaulter, R, who was behind on income tax payments. The court clarified that the attachment of the property under rule 48 of the Income-tax Act predates the buyer's agreement and thus invalidates the buyer's claim to invoke rule 61 to set aside the auction sale. The ruling stressed that only the defaulter or those with legally recognized interests could challenge the sale, reinforcing the principle that an agreement to purchase does not confer any rights on the buyer when the property is under legal encumbrance. This case is crucial for understanding the limitations imposed on agreements involving attached properties and the statutory framework governing tax recovery proceedings. |
| Court |
Karnataka High Court
|
| Entities Involved |
|
| Judges |
S.P. Bharucha, CJ,
K. Shivashankar Bhat, J.,
D.V. Satyanarayana
|
| Lawyers |
G. Sarangan,
V.V. Upadhyaya,
S.K. Krishnaswami,
P.S. Manjunath
|
| Petitioners |
D
|
| Respondents |
Tax Recovery Officer
|
| Citations |
1992 SLD 1770,
(1992) 197 ITR 407
|
| Other Citations |
Lila Vati Bai v. State of Bombay AIR 1957 SC 521,
Kavalappara Kottarathil Kochuni Moopil Nayar v. States of Madras & Kerala AIR 1960 SC 1080,
Bhinka v. Charan Singh AIR 1959 SC 960,
Rajata Trust v. Chief CIT [1992] 193 ITR 220 (Kar.),
TRO v. Hansaben[1982] 135 ITR 572 (Kar.),
M.H. Pandya v. TRO [1989] 178 ITR 538 (Guj.),
Jose v. Anantha Bhat ILR 1986 Kar. 4031,
Shivanappa Sidramappa Prantur v. Virupaxappa Allapa Bagi ILR 1980 Kar. 702,
TRO v. K Basavarajappa [Writ Appeal No. 293 of 1991]
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
222,
16,
61
|