Bona fide purchaser protection defeats void-transfer claim where tax recovery notice and statutory preconditions are not proved.

A transfer for adequate consideration in favour of a purchaser without notice of pending tax proceedings or tax liability cannot be treated as void under Section 281 of the Income-tax Act unless the statutory preconditions are proved, including service of the requisite recovery notice under the Second Schedule. Where the record did not establish that foundational notice and the purchase was made after title verification and due diligence, the declaration that the registered sale deed was null and void could not be sustained. The consequential auction communication based on that void declaration also fell. A bona fide purchaser's protected title cannot be displaced by an unproven recovery action against the original defaulter.

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Issues: Whether the order declaring the registered sale deed void and the consequential auction communication could be sustained when the purchaser claimed to be a bona fide purchaser for value without notice of the tax proceedings and the statutory preconditions for invoking the recovery provisions were not shown to have been satisfied.

Analysis: The property was purchased under a registered sale deed for consideration after public notice, title verification, and due diligence. The materials showed that the recovery action was directed against the original owner, and the record did not establish service of notice under Rule 2 of the Second Schedule before the private transfer. Section 281 of the Income-tax Act permits a transfer to be treated as void only where the statutory conditions are met, and its proviso protects transfers for adequate consideration made without notice of the pending proceedings or tax liability. In the absence of proof of the foundational notice requirement, and in view of the long delay in giving effect to the attachment against the purchaser, the order declaring the sale void could not stand.

Conclusion: The declaration that the sale deed was null and void was unsustainable and was set aside, and the consequential auction communication was also quashed.

Final Conclusion: The challenge succeeded because the purchaser's bona fide acquisition for consideration without notice could not be displaced by an unproven recovery action against the original defaulter.

Ratio Decidendi: A transfer by a purchaser for adequate consideration without notice of the pendency of tax proceedings or tax liability cannot be declared void under Section 281 of the Income-tax Act unless the statutory preconditions, including service of the requisite recovery notice, are established.

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