High Court Of Andhra Pradesh
G. Satyanarayana vs. ITO & Anr.
Section 230A, RULE 44A, RULE 44B
Lingaraja Rath & T.C. Rangarajan, JJ.
Writ Petn. No. 2569 of 1997
25th March, 1997
Smt. M. Bhaskara Lakshmi, for the Petitioner : S.R. Ashok, for the Respondents
LINGARAJA RATH, J. :
The petitioner has approached us assailing the communication made to him by respondent No. 1â ITO, Ward No. 1, Vizianagaramâintimating him with regard to his application for issue of “no objection certificate” under s. 230A of the IT Act that he should file a revised application duly signed by all the coparceners of the HUF along with evidence that all the properties under consideration belong to the HUF. It is submitted by Smt. M. Bhaskara Lakshmi, learned counsel for the petitioner, that the communication is not authorised under the provisions of s. 230A of the IT Act r/w rr. 44A and 44B and Form 34A of the IT Rules, 1962.
The brief facts according to the petitioner are that disputes in respect of the joint family properties of the petitioner along with his sons which constitute an HUF were subjected to arbitration in which an award has been passed, but as that award was not liable to be registered until the certificate as contemplated under s. 230A has been obtained, he, as the Karta of the HUF made an application to respondent No. 1âITO, Vizianagaramâthat in view of the impugned communication made, he is under disability to obtain the certificate. While considering the case a submission has been made by Mr. T. Viswanadha Sastry that he may be permitted to implead the sons of the petitioner and has opposed the move by the petitioner to obtain the certificate since he has received instructions that the petitioner is no longer the Karta and that the properties do not belong to the HUF. We had not considered it necessary to allow his request as in the context of the case we do not think that the persons purporting to be impleaded have any locus standi.
Under s. 230A of the IT Act a document which purports to transfer, assign, limit or extinguish the right, title or interest of any person to or in any property valued at more than five lakhs rupees is not entitled to be registered, unless the AO certifies that the person has either paid or made satisfactory provision for payment of all existing liabilities under the IT Act and the other Acts mentioned therein, as also the fact that the registration of the document would not prejudicially affect the recovery of any existing liability under those Acts.
Under r. 44A an application to obtain the certificate has to be made in Form 34A and the note appended to it provides that in the case of an HUF, the application has to be made by the Karta and where he is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family. It is thus clear that when a certificate is desired to be obtained, an application may be made by the Karta or in the event he is absent or incapacitated, it can be made by some other adult member. It is not the requirement of law that the application must be signed by all the members of the coparcenery. To that extent the communication made by respondent No. 1 is beyond the provisions of the Rules.
Under r. 44B, the application may be rejected if the AO is satisfied that the applicant has neither paid the dues nor has made any satisfactory provision for payment of the existing liabilities under the different enactments referred to in s. 230A or that the registration of the document would prejudicially affect the recovery of any such liability. It is hence clear that the certificate can be rejected only if the satisfaction is reached that either payment has not been made of existing liability or provision for payment of all existing liabilities has not been made or that the registration would in anyway adversely affect the recovery of such liability. It may be necessary for the AO, when a certificate is sought for, to find out as to whether there is any existing liability and if such liability is found to be satisfied, that provision for its payment has been made. But, where such existing liability is not there, the rules do not contemplate refusal of the certificate. The total thrust of the provision is only to safeguard the interests of the Revenue that no tax is avoided. As is submitted by learned senior standing counsel for income-tax cases, to reach a conclusion in order to know whether the existing liability is there or not, the AO may take steps to ascertain such facts by calling for a return. As a matter of fact column 6 of Form 34A requires the applicant to mention the particulars of existing tax liability as on the date of the application under the different enactments and also directs, if there is no existing liability under the Acts, to endorse the word “nil”. The statement of the applicant as to any existing liability or “nil” liability would authorise the AO to enquire about it and find out whether there is liability or not, and in the event any liability is found, to proceed according to law as contemplated under the provisions of the section and r. 44B. But the rules do not contemplate calling for any information as to whether the properties under consideration belong to the HUF, since it is the declaration of the person concerned that they belong to the HUF. The AO has no authority to decide a civil dispute between the parties which is a matter for the competent Court to decide. In this case, the averment of the petitioner is that there has been an arbitration and award has been passed. If that is so the validity or otherwise of the award has to be adjudged by the Court only, for which the parties must take recourse to law. But the provisions of s. 230A or rr. 44A and 44B cannot be used as a lever to frustrate the award which might have been validly and legally passed.
In that view of the matter, we quash the impugned communication dt. 30th Dec., 1996, of respondent No. 1âITO, Ward No. 1, Vizianagaramâand remand the matter to him to consider the question in accordance with law as explained, and pass orders within four weeks from the date of receipt of a copy of this order and communicate the same to the petitioner.
The writ petition is accordingly allowed. No costs.
[Citation : 234 ITR 477]