The Madras High Court recently in M/s Agasthiya Holdings Private Limited v. CIT & Ors, held that the Tax Recovery Officer has no power to declare a sale as void and null under the provisions of the Income Tax Act and the concerned Rules.
The petitioner-Company approached the High Court challenging the order under Rule 16(1) and (2) of the Income Tax Rules passed by the Tax Recovery Officer, Tuticorin wherein the Officer nullified the sale in favour of the petitioners on ground that the property-in-dispute has been attached by the department for the income-tax arrears of the vendors as early as on 06.01.1988.
Rule 48 provides for attachment of the immovable property and Rule 50 provides for proclamation of attachment.
After analyzing the provisions of Rule 16 (1) and (2), the bench observed that the Tax Recovery Officer has no power to declare the alienation as null and void.
However, the Court clarified that the department is at liberty to proceed against the properties of the defaulters which according to the department have been attached on 06.01.1988.
Read the full text of the Judgment below.
