Income-tax clearance certificate granted where undertaking over immovable property adequately secured pending tax dues.

The Gujarat HC held that an income-tax clearance certificate under Section 230A(1) of the Income-tax Act, 1961 could be granted for registration of the sale deed despite pending tax proceedings and outstanding dues. The petitioner's affidavit undertook not to alienate, encumber, or otherwise deal with another immovable property of substantial value until the pending tax appeals were finally disposed of, and that assurance was treated as adequately securing the Department's interest. Refusal of the certificate was therefore not justified, and the authority was directed to issue it within two weeks.

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Issues: Whether the petitioner was entitled to an income-tax clearance certificate under Section 230A(1) of the Income-tax Act, 1961 for registration of the sale deed despite pending tax proceedings and outstanding dues.

Analysis: The petitioner furnished an affidavit undertaking that another immovable property of substantial value would not be alienated, encumbered, or otherwise dealt with until the pending tax appeals were finally disposed of. In light of that assurance, the Court found that the Department's interest stood adequately secured and that refusal of the certificate was not warranted.

Conclusion: The petitioner was held entitled to the income-tax clearance certificate, and the respondent was directed to issue it within two weeks.

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