Andhra Pradesh H.C : Whether the refusal of certificate under s. 230A was proper. The precise question is whether there is “existing liability”, and, therefore, the certificate was refused.

Counsel Appeared

S. Dasaratharama Reddy, for the Petitioner : M. Suryanarayana Murthy & A.V. Krishna Koundinya, for the Respondent

A. RAGHUVIR, J.:

Deccan Gelatine (P) Ltd. sought for a certificate under s. 230A of the IT Act for purposes of registration of a document. The certificate was refused. That order is assailed in this writ petition. Pending admission of the writ petition, the ITO, B-Ward, was directed to file a counter. In the counter, he averred that on 26th Sept., 1986, a search was made by the IT Department and certain books were seized from the premises of the assessee, but “No books of account relating to the asst. yr. 1987-88 were seized”. The return for the asst. yr. 1987-88 could be filed. If only the return is filed, it will be known whether the assessee has suppressed the income or not. It is averred that agricultural lands were sold is not accepted. The enquiry revealed that lands sold were non-agricultural lands and further :

“Petitioner had also sold firewood, stones and eucalyptus trees for Rs. 6,075, Rs. 9,930 and Rs. 19,692, respectively, during the year ending on 31st March, 1985. It is also noticed that a poultry farm is run on the lands already sold and proposed to be sold. Around the lands sold, there are only some industrial concerns and no agricultural lands. It is submitted that the lands in question being non-agricultural lands, they are liable to be assessed under the WT Act. The sale of acres 16-20 guntas will also attract capital gains.” Therefore, the certificate was properly refused. The question in the instant case is whether the refusal of certificate under s. 230A was proper. The precise question is whether there is “existing liability”, and, therefore, the certificate was refused.

The assessee cited a decision in Gopal Industrial Estate vs. ITO & Ors. (1980) 123 ITR 727 (Guj) : TC52R.1314. In that at page 733, it is held : “Lack of co-operation in completion of the assessment is not a ground germane to s. 230A(1) and it is obvious that the ITO had allowed lack of such cooperation to weigh with him in refusing to grant the certificate under s. 230A(1) of the Act.”

It may not be necessary in this case to decide the correctness of the observation. We are satisfied in the instant case that there is no “existing liability” of the assessee and for that reason the Income-tax Officer cannot refuse the certificate. The ITO, B-Ward, is directed to issue the certificate as prayed for under s. 230A on or before Monday, 16th Nov., 1987.

The writ petition is allowed. No costs.

[Citation : 172 ITR 195]