TaxTMI 
TaxTMI 
2000 (2) TMI 70
X X X X Extracts X X X X
X X X X Extracts X X X X
....r section 230A of the Income-tax Act, 1961. The petitioner is a chit fund company. It obtains from its prized subscribers or their guarantors security, documents charging their immovable properties in favour of the petitioner, to secure the amount of the prized chits. Such documents are registered with the sub-registrar. As and when the amounts payable to the petitioner are received in full, the petitioner executes discharge receipts which are also registered. The petitioner claims that section 230A of the Income-tax Act is inapplicable to the registration of such discharge receipts. It is the case of the petitioner that it acquires no right over the property when the security documents are registered and, consequently, there is no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tinction of the right of the charge-holder over the property. Section 230A of the Income-tax Act in sub-section (1) as it stood prior to April 1, 1988, provided thus : "Notwithstanding anything contained in any other law for the time being in force, where any document required to be registered under the provisions of clause (a) to clause (e) of sub-section (1) of section 17 of the Indian Registration Act, 1908 (16 of 1908), purports to transfer, assign, limit, or extinguish the right, title or interest of any person to or in any property valued at more than fifty thousand rupees, no registering officer appointed under that Act shall register any such document, unless the Assessing Officer certifies that--- (a) such person has either p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The obligation to register the document under section 17 of the Registration Act will arise, so far as receipts evidencing the discharge of charges created under registered instruments are concerned, when such receipts are reduced to writing. Section 100 of the Transfer of Property Act no doubt does not provide that a charge can be said to be discharged only when a receipt is executed by the charge-holder, and such a receipt is registered. However if such a receipt is executed, such a receipt being in the nature of a non-testamentary instrument which declares the extinction of a charge created under a registered document, would require registration in view of section 17(1)(c) of the Registration Act. In this respect, a receipt dischar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Registration Act, as also to those required to be registered under the Transfer of Property Act, except as evidence of part performance under section 53A of the Transfer of Property Act. A mortgage as also a charge can be brought to an end without the execution, by the mortgagee or the charge-holder acknowledging the extinction of the mortgage or charge. But, if they choose to execute such acknowledgments in writing, such acknowledgments would be compulsorily registrable under section 17(1)(a) of the Act. That such documents are compulsorily registrable is placed beyond any doubt by section 17(2)(xi) of the Registration Act. Section 17(2) sets out in clauses (i) to (xii), the documents to which clauses (b) and (c) of section 17(1) wil....