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1988 Supreme(Cal) 79
High Court Of Calcutta
Dipak Kumar Sen, Shyamal Kumar Sen
INCOME-TAX OFFICER - Appellant
Versus
SAVITRI DEVI SEVA TRUST - Respondent
. . Of .
Decided On : 03/02/1988
The Income-tax Officer is not entitled to withhold the certificate under Section 230a of the Income-tax Act, 1961, in favor of the assessee on the ground that the property did not stand in the name of the trust and that there was no valid evidence to show that the property belonged to the trust.
Headnote:
INCOME TAX - Section 230a - Certificate for registration of documents - Income-tax Officer - Jurisdiction and scope of enquiry.
Fact of the Case:
The assessee, a charitable trust, sought a certificate under Section 230a of the Income-tax Act, 1961, for the registration of a conveyance of a property in its favor. The Income-tax Officer refused to issue the certificate on the ground that the property did not stand in the name of the trust and that there was no valid evidence to show that the property belonged to the trust.
Finding of the Court:
The court held that the Income-tax Officer was not entitled to withhold the certificate under Section 230a of the Income-tax Act, 1961, in favor of the assessee. The court observed that the Income-tax Officer was not required or empowered to adjudicate or determine the validity of the transfer or the title of the transferor in the property which was sought to be transferred. The Income-tax Officer had to ensure primarily that the transferor seeking the certificate was a party to the document of transfer, whereby the transfer was purported to be made, and the existing tax liabilities of the said person. These were the primary requirements which had to be satisfied whereafter the certificate prescribed under the said section was required to be issued.
Issues: Whether the Income-tax Officer had the jurisdiction to adjudicate or determine the validity of the transfer or the title of the transferor in the property which was sought to be transferred.
Ratio Decidendi: The court held that the Income-tax Officer was not required or empowered to adjudicate or determine the validity of the transfer or the title of the transferor in the property which was sought to be transferred. The Income-tax Officer had to ensure primarily that the transferor seeking the certificate was a party to the document of transfer, whereby the transfer was purported to be made, and the existing tax liabilities of the said person. These were the primary requirements which had to be satisfied whereafter the certificate prescribed under the said section was required to be issued.
Final Decision: The court affirmed the order of the lower court directing the Income-tax Officer to issue the certificate under Section 230a of the Income-tax Act, 1961, in favor of the assessee.
( 1 ) THE material facts on record and proceedings leading up to this appeal are, inter alia, that by deed dated July 15, 1983, executed by Girdharilal Jagatramka, respondent No. 2, a public charitable trust, named, Savitri Devi Seva Trust, respondent No. 1, was created. On or about January 4, 1984, the Commissioner of Income-tax, West Bengal-VII, issued certificates respectively under Sections 12a and 80g of the Income-tax Act, 1961, certifying, inter alia, that respondent No. 1 had been duly registered and that it was an institution established in India for the prescribed charitable purposes.
( 2 ) ON or about June 9, 1986, an agreement was entered into by and between the owners of premises No. 58/6, Prince Anwar Shah Road, Calcutta, hereinafter referred to as "the said property" and the six trustees of respondent No. 1 whereby the former agreed to sell to the latter, the said property consisting of land measuring 4 cottahs 13 chittacks and 18 sq. ft. and unfinished brick buildings and structures thereon on an "as is where is" basis for a consideration of Rs. 9 lakhs. A sum of Rs. 5 lakhs was paid by the said trustees by way of earnest money by seven several cheques.
( 3 ) THE said agreement dated June 9, 1986, was entered into by and amongst the vendors of the said property, on the one hand, and Dinesh Chandra Bajoria, Suresh Kumar Bajoria, Arvind Bajoria, Smt. Sharda Bajoria, Smt. Kanta Bajoria and Smt. Lata Bajoria, the trustees to the said trust in their individual capacities, inasmuch as the vendors of the said property refused to enter into any transaction with respondent No. 1, a charitable trust.
( 4 ) ON September 30, 1986, six several conveyances were executed whereby the vendors transferred 1/6th undivided share in the said property separately to the following persons : (a) Smt. Kanta Bajoria, (b) Smt. Lata Bajoria, (c) Radha Organics, a registered partnership firm, (d) Radha Properties, also a registered partnership firm, (e) Smt. Sharda Bajoria and (f) Radha Udyog, also a registered partnership firm.
( 5 ) THE said Dinesh Chandra Bajoria, Suresh Chandra Bajoria, Arvind Bajoria, Smt. Lata Bajoria, Smt. Sharda Bajoria and Smt. Kanta Bajoria were parties or confirming parties to each of the said conveyances.
( 6 ) THEREAFTER, respondent No. 1 filed a return of its income with audited accounts and balance-sheet for the assessment year 1987-88. In the said balance-sheet, the said property was shown as belonging to respondent No. 1.
( 7 ) ON or about December 11, 1986, respondent No. 1 issued a notice under Section 281 A (1) of the Income-tax Act, 1961, to appellant No. 2. It was stated in the said notice that the three trustees of respondent No. 1 and the three partnership firms of which the trustees were the partners, were not the real owners of the said premises but were only benamidars of respondent No. 1. The trustees of respondent No. 1 subsequently decided to sell the said property and utilise the sale proceeds to repay the loans obtained for the trust for purchasing the said premises and utilise the balance for charitable purposes in terms of the objects of the trust.
( 8 ) BETWEEN August 24 and August 29, 1987, six several deeds were executed by and between respondent No. 1 on the one hand, and the said three trustees, namely, Smt. Lata Bajoria, Smt. Kanta Bajoria and Smt. Sharda Bajoria, and the said three partnership firms, namely, Radha Udyog, Radha Properties and Radha Organics, ail parties to the said six several conveyances executed on September 30, 1986. By the said deeds, it was declared by the said trustees and the said partnership firms, inter alia, that the price or consideration in respect of the said property including all costs, charges and expenses of and incidental to the execution and registration of the said conveyances had been borne and paid by respondent No. 1 and, in fact, the said property was purchased by respondent No. 1 and that the said trustees and
