JUDGMENT J.P. Devadhar, J.
1. The short point raised in this petition is, whether, by the impugned order dt. 24th Dec., 1991 the Asstt. CIT, Circle 1(4) was justified in holding that the transfer of office premises bearing No. 5 situated on the ground floor, Plot No. 210, Block III, Nariman Point, Bombay 400 021 (hereinafter referred to as 'the said premises') by the respondent No. 3 in favour of the petitioner is void under Section 281 of the IT Act, 1961 ?
2. The undisputed facts are that the petitioner, a Canadian banking corporation, carrying on business of banking was put in absolute and exclusive possession of the said premises by the respondent No. 3 as per the terms more particularly set out in the agreement dt. 14th June, 1983. By another agreement dt. 9th Sept., 1983, the petitioner claims to have purchased the said premises from the respondent No. 3. The petitioner has moved the Appropriate Authority by filing Form No. 37EE/Form No. 37 and on 21st March, 1987 and no objection certificate was issued approving transfer of the said property by the third respondent in favour of the petitioner.
3. Thereafter, on 27th April, 1988, the Asstt. CIT issued a notice under Section 281(1) of the IT Act, 1961 calling upon the respondent No. 3 to show cause as to why the transfer of the said premises in favour of the petitioner should not be treated as invalid on the ground that the said property was sold during the pendency of the assessment proceedings. The petitioner was not a party to the said proceedings and without hearing the petitioner an order dt. 9th Feb., 1990 was passed by the Asstt. CIT declaring that the transfer of the said property by the respondent No. 3 in favour of the petitioner is void under Section 281 of the IT Act. When the petitioner came to know about the said order, he filed a Writ Petn. No. 1085 of 1990 to challenge the said order and by an order dt. 9th Dec., 1990 this Court set aside the order dt. 9th Feb., 1990 and directed the Asstt. CIT to pass a fresh order in accordance with law after hearing the petitioner. Thereupon, notice was issued to the petitioner and the petitioner in its reply objected to any order being passed under Section 281 of the IT Act inter alia on the ground that the conditions set out in the section were not met with and that the petitioner is a bona fide purchaser of the said premises. By the impugned order dt., 24th Dec. 1991 the Asstt. CIT once again held that the transfer of the said premises in favour of the petitioner was void under Section 281 of the IT Act. Hence, this petition.
4. Mr. Mistry, learned advocate appearing on behalf of the petitioner relying upon the decision of the apex Court in the case of TRO v. Gangadhar Vishwanath Ranade (Dead) through Mrs. Sobha Ravindra Nemiwant, submitted that under Section 281 of the IT Act, the Asstt. CIT has no power to declare transfer of property as void. He submitted that even assuming that such power existed, the facts of the case did not warrant an order under Section 281 of the IT Act because the transaction entered into by and between the petitioner and the respondent No. 3 is prior to date of filing of the return by the respondent No. 3 for asst. yr. 1984-85 and, therefore, it cannot be said that the assessment proceedings for asst. yr. 1984-85 were pending when the transfer took place. In any event, Mr. Mistry submitted that the petitioner was a bona fide purchaser and, therefore, the transfer of the said premises in favour of the petitioner is saved under Section 281 of the IT Act.
5. Although, the petition was admitted in the year 1992, the respondents have not chosen to file affidavit-in-reply till date. However, Mr. Daniel, learned counsel for the Revenue fairly stated that in the facts of the case it is not possible to support the order passed under Section 281 of the IT Act. His only submission was that as held by the apex Court in the case of Gangadhar v. Ranade (supra) quashing of the action taken under Section 281 of the Act should not affect the attachment, if any, levied by the Department and the right of the Department to have the transfer declared as void by taking appropriate proceedings in accordance with law.
6. In this view of the matter, the impugned order dt. 24th Dec., 1991, passed under Section 281 of the IT Act is quashed and set aside. However, it is made clear that quashing of the said order dt. 24th Dec., 1991 will not affect the attachment, if any, levied by the Department in respect of the said premises and the right of the Department to have the transfer declared as void by taking appropriate proceedings in accordance with law.
7. Accordingly, rule is made absolute in terms of prayer Clause (a) with no order as to costs.