Court quashes order declaring property sale null under Income Tax Act. Original assessee paid dues, rendering order unjustified.

The court quashed the impugned order declaring a property sale null and void under the Income Tax Act. It found that the original assessee had paid all dues mentioned in the Certificate, rendering the order unjustified. Emphasizing the defaulter's right to set aside a sale by clearing the entire due amount, the court ruled in favor of the petitioner. The impugned order was deemed invalid, and the court made the rule absolute, awarding no costs to either party.

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Issues involved:
1. Validity of the impugned order declaring a sale of property null and void under the Income Tax Act, 1961.

Detailed Analysis:
1. The petitioner sought a writ to quash an order by the Recovery Officer declaring the sale of a property null and void under the Income Tax Act. The property was jointly owned by four individuals, including the original assessee, who transferred it to the petitioner. The impugned order declared the sale deed as null and void, leading to the petitioner filing a petition under Article 226 of the Constitution of India.

2. The petitioner's counsel argued that the original assessee had paid the entire amount due under the Certificate issued by the Tax Recovery Officer, rendering the impugned order unnecessary. The counsel highlighted that the original assessee had paid the remaining amount due as well, demonstrating compliance with the tax obligations.

3. The Revenue's counsel contended that the attachment order should continue until all dues, including penalties, are settled. However, the petitioner's counsel emphasized that the attachment was related to specific dues mentioned in the Certificate and did not extend to penalties imposed later. The petitioner had paid the entire amount due under the Certificate, making the impugned order unjustified.

4. The court noted that the original assessee had paid all dues mentioned in the Certificate, including interest, and the impugned order was based on erroneous grounds. The court referred to Rule 60 of the Income Tax Act, emphasizing the defaulter's right to set aside a property sale by paying the entire due amount. Since the original assessee had cleared all dues, the impugned order was deemed invalid.

5. Consequently, the court quashed the impugned order dated 28/9/2015, ruling in favor of the petitioner. The court held that the entire amount due under the Certificate had been paid, and there was no justification for declaring the sale null and void. The court made the rule absolute and awarded no costs in the case.

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