Sapana Charudatt Ranadive v. ACIT – [2019] 108 taxmann.com 384 (Bombay)

The immovable properties of the assessee were attached in the year 1997 for the purpose of recovery of tax dues. Thereafter, the assessee died and, subsequently, the department issued sale proclamation dated 21.01.2019 for the purpose of recovering arrears of taxes.

 The said auction notice was published in the daily newspaper on 23.01.2019 for inviting the bidders to participate.

The deceased’s daughter filedwrit petition contending that such sale proclamation was hit by the limitation prescribed under rule 68B of the second schedule of the Act.

On writ petition, the High Court held that the rule 68B(1) provides that no sale of immovable property would be made after the expiry of 3 years.

The period of 3 years shall be computed from the end of the financial year in which order giving rise to a demand becomes conclusive under section 245-I or Chapter XX of the Act which deals with the appeals and revisions. Further, sub rule (4) of rule 68B provides that where sale is not made within the limitation period, the attachment order shall be deemed to have been vacated on expiry of said limitation period.

 In the instant case, rule 68B would apply with full force. The attachment of said property was ordered in 1997 and sale proclamation was made in February 2019, thus the same was barred by the limitation.

Above judgement was rendered under the old regime i.e., Prior to amendment by the Finance (No. 2) Act, 2019. Now,Rule 68B has extended the limitation period for sale of attached property from 3 years to 7 years.

 Further, The CBDT has been empowered to further extend the period of 7 years by another period of 3 years.