While the seller kept on demanding and the buyer kept on making the progress linked payments, which were all completed within 90 days, instead of the 105 days stipulated in the agreement, the seller has virtually stopped further work on the premises after receipt of the last progress linked payment and is now obliquely suggesting that I should agree to a cost escalation of Rs 5 lakh because the input costs have turned out higher than anticipated. Although I have pointed out to him that our's is a fixed price contract, he's continuing to employ delay tactics and the period of 120 days will expire soon. What action should I take to protect my interest in the matter?
-- Mahesh Sahay, New Delhi

The very object of executing an `agreement to sell' is to fix the parameters of sale and commit to writing essential agreements with regard to price and delivery terms, etc, and also fixresponsibility for the completion of various tasks that are a prelude to consummation of a deal in an orderly and time-bound manner. It is good that you have got the "agreement to sell" registered and as such, the sale price and other terms of sale previously agreed to by you are already known to the registrar.

You have to ensure that the registrar is indeed aware that you have not defaulted in fulfilling your part of the commitment and, therefore, you should present yourself before the registrar along with an application addressed to him on judicial paper detailing all the facts of the case and a photocopy of the `agreement to sell', as also photocopies of the receipts issued by the seller in acknowledgment of various payments effected by you. Your application should specifically state that you have appeared before him in compliance of the terms and conditions of the registered agreement to sell, which was executed in his presence.

The object of the application is essentially to mark your presence andexpress your willingness to complete the sale transaction as per the terms embodied in the `agreement to sell'. The registrar will record the time of your appearance before him on the application itself and return the same to you with his endorsement before the close of the day.

Thereafter, you can send a lawyer's notice to the seller to come forward to complete the transaction within a reasonable period of time. If he still fails to comply, you will have no choice but to seek a specific performance of the contract through courts of law that have a jurisdiction in the matter. While approaching the court you can also seek directions regarding costs, interest on funds already paid in partial satisfaction of the contract and the opportunity losses sustained by you. While there is a possibility that you will ultimately succeed in securing the property through the courts of law, the whole process would be time- and cost-consuming. In view of the above, try and achieve an amicable settlement through personalnegotiation or third party intervention.

My uncle, who's a senior citizen, is an issueless widower and has no direct legal heirs to succeed him. During his working life, he worked as a contractor and filed income tax returns as and when he made profits. Accordingly, he did not file any tax returns relating to the assessment years, 1976-77 and 1977-78. But he did indeed file a tax return for the assessment year, 1978-79, and when this return came up for scrutiny in 1980, the assessing officer opined that his income for the two previous years was also taxable and, therefore, after imposing penalties for deliberate concealment of income, he created a demand for Rs 30,000 and asked my uncle to settle the same within 30 days. However, my uncle, being aggrieved with the order, proffered an appeal with the assistant commissioner of income tax and prayed for cancellation of the demand. In the intervening period, he also transferred his only immovable property--a residential house to my mother, who is his sister,by means of a registered gift deed. His appeal was taken up by the assistant commissioner of income tax in 1982 and the relief sought by him was denied.

The assessing officer, upon being advised of the appealing authorities' decision, decided to declare under Section 281 of the Income Tax Act the property gift made by my uncle as null and void on the ground that the gift was made during the pendency of the tax recovering proceedings with the intention of defrauding the revenue. This was objected to not only by the assessee, but also by his sister, to whom the house had previously been gifted and who was in actual possession of the premises. However, the assessing officer over-ruled these objections and decided to attach the property under Rule 11 of the second schedule of the Income Tax Act. All our attempts to have the property released have so far been fruitless and we are indeed thinking of moving the courts of law. But before we do so, we would very much appreciate your guidance with regard to thesubsisting case law.
-- Yogendra Kumar, Gurgaon

Section 281 of the Income Tax Act empowers the Tax Recovery Officer to declare any transfer of property made by the assessee during the pendency of proceedings under the Act as void if, in his considered opinion, the intention is to defraud the revenue. On the other hand, Rule 11 of the second schedule of the Income Tax Act also empowers the Tax Recovery Officer to investigate into the objections made against an attachment or sale of any property made under Section 281 of the Act with a view to facilitating and expediting tax dues. The interpretation of both these provisions was also the bone of contention in an appeal in the case, Special Tax Recovery Officer II, Sadar Nagpur, versus Gangadhar Vishwanath Ranade, which the Supreme Court has resolved in their recent judgment.

In its judgement, a division bench of the Supreme Court, comprising Justice Sujata Manohar and Justice G B Patnaik, has averred that while proceeding under Rule 11,the tax recovery officer had to examine who was in possession of the property and in what capacity; he could only attach a property of the assessee in his own right or in possession of a tenant or a third party on behalf of or for the benefit of the assessee. He, however, cannot declare any transfer made by the assessee in favour of a third party as void. If the department finds that a property of the assessee is transferred by him to a third party with the intention of defrauding the revenue, they will have to file a suit under Rule 11 (6) to have the transfer declared void under Section 281 of the Income Tax Act. They further pointed out that the department could not proceed on the assumption that the transaction was void under Section 281 of the Act, nor could the tax recovery officer, while proceeding under Rule 11, declare a transaction of transfer as void. They further stated that the tax recovery officer's jurisdiction is primarily limited to examining the possession.

In the light of the aboveobservations, you should request your legal counsel to re-examine the entire issue and proceed further in the matter in consonance with his advice.