Gift completion on execution and presentation for registration, with delayed registration not shifting tax year

A gift deed executed and presented for registration on 31 March 1986 was treated as complete in the accounting year relevant to assessment year 1986-87, because the Gift-tax Act was read as not importing the registration requirements of section 123 of the Transfer of Property Act and section 47 of the Registration Act gave the registered document effect from the date it would have operated but for compulsory registration. The note also records that assessment for assessment year 1987-88 was made without a valid return and without statutory notice, reinforcing that the gift was not properly brought to tax in that year.

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Issues: Whether the gift was complete in the accounting year relevant to assessment year 1986-87 or only on registration after 1 April 1986 so as to be assessable in assessment year 1987-88.

Analysis: The gift deed was executed and presented for registration on 31 March 1986, though actual registration took place later because of delay at the registrar's office. The Tribunal relied on the view that the Gift-tax Act does not import the same registration requirements as section 123 of the Transfer of Property Act, and that a registered document operates from the date it would have taken effect if registration had not been required, in light of section 47 of the Registration Act, 1908. The Tribunal also noticed that the assessment for assessment year 1987-88 had been made without a valid return and without statutory notice, which reinforced the impropriety of taxing the gift in that year.

Conclusion: The gift was complete in the accounting year relevant to assessment year 1986-87 and was not assessable in assessment year 1987-88.

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