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of <h1>Void Sale Due to Tax Demands Upheld, Emphasis on Procedural Fairness</h1> The court declared the sale of a flat void under section 281(1) of the Income-tax Act due to outstanding tax demands and pending assessment proceedings. ... Writ Issues:1. Validity of the sale of a flat under section 281(1) of the Income-tax Act, 1961.2. Rights and obligations of the petitioners as purchasers in the said sale.3. Compliance with procedural requirements and principles of natural justice in the decision-making process by the Inspecting Assistant Commissioner.Detailed Analysis:1. The judgment revolves around the validity of the sale of a flat under section 281(1) of the Income-tax Act, 1961. The flat in question was initially under a warrant of attachment by the Income-tax Department, which was subsequently lifted. However, almost a year later, the Inspecting Assistant Commissioner issued a notice questioning the sale's validity. The Commissioner eventually declared the sale void under section 281(1) due to outstanding tax demands and the sale occurring during the pendency of assessment proceedings. The judgment delves into the legal provisions and exceptions under section 281(1) regarding the transfer's validity for adequate consideration and without notice of pending proceedings or tax liabilities.2. The rights and obligations of the petitioners, who were the purchasers of the flat, are a crucial aspect of the judgment. The petitioners had entered into an agreement to purchase the flat after obtaining permission from the court. Despite the show-cause notice being addressed to the original owners, the petitioners provided a detailed explanation defending the sale's validity. The judgment emphasizes that the petitioners, as necessary parties to the proceedings under section 281, took necessary precautions, responded to the notice, and should have been given an opportunity to be heard. The court highlighted the importance of natural justice principles and the petitioners' right to a fair hearing before adverse decisions affecting them were made.3. The judgment scrutinizes the procedural compliance and adherence to principles of natural justice in the decision-making process by the Inspecting Assistant Commissioner. It criticizes the Commissioner for not considering the petitioners' explanation, not providing them with a hearing, and passing the impugned order without due regard to their rights. The court emphasized that the petitioners, despite not being the direct addressees of the show-cause notice, actively participated in the process by responding and should have been afforded a fair opportunity to present their case. Ultimately, the court quashed the impugned order concerning the petitioners, highlighting the significance of procedural fairness and the right to be heard.In conclusion, the judgment meticulously examines the legal intricacies surrounding the validity of the flat sale, the rights of the purchasers, and the procedural fairness in decision-making processes, ultimately upholding the petitioners' right to a fair hearing and quashing the adverse order against them.
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