Tax Recovery Officer doesn’t have jurisdiction to declare sale of property as void: Madras High Court

K. N. Subramaniam Vs PCIT (Madras High Court)

Madras High Court held that Tax Recovery Officer cannot declare sale made by the assessee in favour of 3^rd party as void. It is the function of civil court to declare a transaction as null and void and the Tax Recovery Officer cannot exercise the said function.

Facts- The present litigation is between the petitioner and the fourth respondent and the Income Tax Department. The fourth respondent appears as a party in person.

Notably, the 4^th respondent defaulted in payment of tax, accordingly, the respondent Income Tax authorities issued a Demand Notice. As the fourth respondent failed to pay the arrears of tax, the property of the fourth respondent were attached vide order dated 25.05.2012 in Form ITCP No.16 issued by the Income Tax Department.

It appears that petitioner and the fourth respondent had earlier entered into a Sale Agreement dated 19.02.2009 for the sale of one of the property. The fourth respondent had executed a Power of Attorney dated 18.08.2009 in favour of the wife of the petitioner also named Buvaneshwari. The said Power of Attorney was later cancelled on 16.08.2011 vide Doc.No.971/2011.

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