Chapter XX-C compliance does not cover compulsory public auction sales by an official assignee, so no no-objection certificate is required.

Chapter XX-C of the Income-tax Act, 1961 was confined to transfers based on an agreement between transferor and transferee and the pre-transfer statement and no-objection certificate mechanism did not extend to compulsory public auction sales by an official assignee. Because the insolvent had no role as a willing vendor, the purchaser was identified only on confirmation of the auction, and the sale was a statutory distress sale rather than a negotiated transfer, the registration bar under Chapter XX-C was inapplicable. The registering authority was therefore not required to insist on an income-tax no-objection certificate before registering the sale deed.

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Issues: Whether a sale by the official assignee in public auction required compliance with Chapter XX-C of the Income-tax Act, 1961, including a no objection certificate for registration of the sale deed.

Analysis: Chapter XX-C applies where a transfer of immovable property is to be effected after an agreement for transfer between a transferor and a transferee, with a statement furnished in the prescribed manner, and the registering officer is barred from registering the document without the requisite certificate. A sale by the official assignee in public auction is not founded on any negotiated agreement between willing transferor and transferee; it is a compulsory statutory sale, the purchaser is not known until the auction is confirmed, and the insolvent has no role as a willing vendor. The purpose of Chapter XX-C is to curb undervaluation, tax evasion, and unaccounted money, which has no real application to distress sales conducted through public auction. The statutory scheme of compulsory sale under insolvency law is therefore outside the practical reach of the agreement-based machinery of Chapter XX-C, and the exemption provisions relied on do not alter that conclusion.

Conclusion: Chapter XX-C of the Income-tax Act, 1961 did not apply to the auction sale by the official assignee, and no no objection certificate was required for registration of the sale deed.

Final Conclusion: The registering authority was directed to register the document without insisting on a certificate from the income-tax authority, as the auction sale was not subject to the pre-transfer procedure under Chapter XX-C.

Ratio Decidendi: The machinery of Chapter XX-C of the Income-tax Act, 1961 applies only to transfers founded on an agreement between transferor and transferee and does not extend to compulsory public auction sales where no such agreement exists.

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