THE HONOURABLE MR JUSTICE SENTHILKUMAR RAMAMOORTHY : The stand of the Income Tax department has been upheld in a decision which is one of its kind in India where in the Learned Judge has held that there is no need for the TRO to approach the civil court, however the TRO could not have passed an order to declare the order void ab initio.

W.P.No.16885 of 2022 M/s Sree Gokulam Chit and Finance Co. P. Ltd. V. The Tax Recovery Officer, The PCIT-1, Chennai & The Principal Commissioner of Income Tax-1 Chennai, before THE HONOURABLE MR JUSTICE SENTHILKUMAR RAMAMOORTHY : The stand of the Income Tax department has been upheld in a decision which is one of its kind in India where in the Learned Judge has held that there is no need for the TRO to approach the civil court, however the TRO could not have passed an order to declare the order void ab initio.
And that the ‘Bonafide purchaser’ defence not available to the applicant for schedule 2 attachment after rule 2 notice
The court held the following:
i. The TRO is entitled to bring the attached immovable property for sale in accordance with the Second Schedule of the I-T Act, even on the face of any encumbrance
ii. The TRO is entitled to appropriate the sale proceeds towards the amount mentioned in the certificate issued under Section 222 of the I-T Act.
iii. If a surplus were to be available after the above-mentioned appropriation, the TRO shall pay such surplus to the petitioner or the third respondent, as the case may be, on the basis of the final, conclusive and binding verdict in proceedings initiated by the
petitioner against inter alia the third respondent under the Chit Funds Act, 1982.

Kudos are due to Advocate Avinash Krishnan Ravi, Junior standing Counsel attached with Adv B Ramana Kumar represented the Income tax department for his extensive research and ably winning the case for the department.