Post-notice agreement to sell cannot create standing to challenge recovery sale proceedings or seek rule 60 relief.

Relief under rule 60 of the Second Schedule is available only to a person whose legal interest is affected by the sale. A post-notice agreement to sell, executed after service of notice under rule 2, does not create right, title or interest in the attached immovable property because rule 16 restricts dealings after notice and the attachment relates back under rule 51. On that basis, the application under rule 60 and the connected appeal were held not maintainable, and the writ challenge also failed for want of a legally protected interest and a maintainable statutory basis.

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Issues: (i) Whether the application under rule 60 of the Second Schedule to the Income-tax Act, 1961, and the connected appeal were maintainable at the instance of a purchaser under an agreement to sell executed after service of notice under rule 2. (ii) Whether the writ petition could be sustained when the applicant had no legally protected interest in the attached property and the statutory authorities had rejected relief under the Second Schedule.

Issue (i): Whether the application under rule 60 of the Second Schedule to the Income-tax Act, 1961, and the connected appeal were maintainable at the instance of a purchaser under an agreement to sell executed after service of notice under rule 2.

Analysis: Notice under rule 2 had already been served on the defaulter, and by virtue of rule 51 the subsequent attachment related back to that date. Rule 16 prohibited the defaulter or his representative-in-interest from dealing with the property without permission after service of notice, and the agreement to sell executed thereafter did not confer any right, title, or interest in the immovable property. Since rule 60 relief is available only to a person whose interest is affected by the sale, a mere agreement-holder with no enforceable interest could not invoke that rule. For the same reason, the appeal against rejection of such application was not competent.

Conclusion: The application under rule 60 and the appeal were not maintainable, and the finding was against the assessee.

Issue (ii): Whether the writ petition could be sustained when the applicant had no legally protected interest in the attached property and the statutory authorities had rejected relief under the Second Schedule.

Analysis: The first petitioner alone had pursued the statutory application and appeal, while the second petitioner had not invoked the relevant remedies. In the absence of a maintainable statutory claim by a person whose interest was affected by the sale, the writ petition itself could not be sustained. The Court also noted that the statutory authority had erred in interfering with the discretion of the Tax Recovery Officer, but found it unnecessary to examine that question further once maintainability failed.

Conclusion: The writ petition was not maintainable, and the challenge to the orders confirming rejection could not succeed.

Final Conclusion: The writ appeals succeeded, the single judge's order was set aside, and the writ petition stood dismissed because the applicants had no maintainable statutory basis to challenge the sale or seek relief under the recovery rules.

Ratio Decidendi: Relief under rule 60 of the Second Schedule is available only to a person whose legal interest is affected by the sale, and a post-notice agreement to sell does not create such an interest or confer standing to challenge recovery sale proceedings.

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