W.P.No.41739 of 2025

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 03.11.2025

CORAM :

THE HONOURABLE MR.JUSTICE C.SARAVANAN

W.P.No.41739 of 2025

and

W.M.P.Nos.46782 and 46784 of 2025

C.Sowmya Raga ... Petitioner

Vs.

1.The Tax Recovery Officer – 3

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

2.The Principal Commissioner of Income Tax -3,

Chennai,

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

3.The Chief Commissioner of Income Tax – 1,

Chennai,

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034. ... Respondents

Prayer: Writ Petition filed under Article 226 of the Constitution of India, for

issuance of a Writ of Certiorari, to call for the records of the Writ Petitioner on

the file of the 1

st

Respondent to quash the impugned communication dated

21.10.2025 in DIN & Letter No: ITBA/COM/F/17/2025-26/1081903214(1)

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W.P.No.41739 of 2025

seeking possession of the property sought to be auctioned and the auction notice

dated 25.09.2025 located at No.238/4, 238/5C, Mevalurkuppam Main Road,

Sriperumbudur Taluk, Kanchipuram, Chennai – 602 117 and the auction notice

dated 25.09.2025.

For Petitioner: Mr.A.S.Sriraman

For Respondents: Mrs.S.Premalatha

Senior Standing Counsel

ORDER

Mrs.S.Premalatha, learned Senior Standing Counsel takes notice for the

Respondents.

2. The Petitioner is before this Court against the impugned auction notice

dated 25.09.2025. By the impugned auction notice, the auction was to be held

on 28.10.2025 at 11.00 am.

3. The learned Senior Standing Counsel for the Respondents submits that

indeed auction was held on 28.10.2025 and the successful bidder has also

sought time for depositing the balance amount. It is noticed that earlier the

Petitioner had approached this Court in W.P.No.28774 of 2019, wherein, the

Petitioner had prayed for a mandamus to direct the 2

nd

Respondent / Sub-

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W.P.No.41739 of 2025

Registrar to remove the attachment entry made by the 3

rd

Respondent / Tax

Recovery Officer over the immovable property measuring 67 cents comprised

in Survey No.238/4 (65 cents) and Survey No.238/5C (2 cents) situated at

Mevalurkuppam Village, Sriperumbudur Taluk, Kancheepuram District and to

direct the 2

nd

Respondent / Sub-Registrar to make appropriate entries stating that

the said attachment has been lifted and to allow the Petitioner to enjoy the

property without any hindrance.

4. By an Order dated 23.02.2024, the Writ Court dismissed the Writ

Petition filed by the Writ Petitioner with the following observations:-

“... 7. Admittedly, the fourth respondent is the original

owner of the property and there was a complaint against the

fourth respondent before the CBI and they have also conducted

raid on 16.12.2010 and they have also requested the

investigation wing of the third respondent to investigate

regarding the evasion of the Income Tax. They have also issued

summons on 17.02.2011 under Section 131 of the Income Tax Act

and issued scrutiny notice under Section 143(2) of the Income

Tax for the assessment years 2009-10 and 2010-11 on

30.09.2011. Subsequently, the petitioner purchased the land from

the fourth respondent only on 02.11.2011. Later, summons were

issued by the third respondent and therefore, the transaction

made by the fourth respondent is void. Since the sale made by

the fourth respondent in favour of the petitioner is not valid

one, the petitioner is not entitled to the relief sought for in the

Writ Petition.”

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W.P.No.41739 of 2025

5. Aggrieved by the aforesaid order of the Writ Petition, the Petitioner had

approached the Division Bench of this Court by way of an appeal in

W.A.No.1518 of 2024. The Division Bench of this Court by an order dated

10.09.2025 disposed of the appeal with the following observations:-

“17. In the light of the above discussion, we find no ground

to interfere with the conclusion arrived by the Writ Court in the

Impugned Order dated 23.02.2024 in W.P.No.28774 of 2019.

18. Accordingly, this Writ Appeal is liable to be dismissed.

Liberty is however given to the Appellant / Writ Petitioner to file

a civil suit to declare that the Appellant / Writ Petitioner was a

bonafide purchaser of the said property from the 4

th

Respondent.

19. In view of the above reasoning, this Writ Appeal stands

dismissed. Consequently connected miscellaneous petitions are

closed. No order as to costs.”

6. In the said order, the Division Bench of this Court has also observed as

under:-

“9. The contention of the Appellant / Writ Petitioner that the

Appellant / Writ Petitioner is a bonafide purchaser cannot be

countenanced as the purchase of the said property was after

assessment proceedings were initiated against the 4

th

Respondent

under the provisions of the Income Tax Act, 1961. Whether the

Appellant/Writ Petitioner was a bonafide purchaser or not

certainly cannot be decided in a summary proceedings under

Article 226 of the Constitution of India. In case, the Appellant /

Writ Petitioner wants to establish that the Appellant / Writ

Petitioner was a bonafide purchaser of the aforesaid property from

the 4

th

Respondent, it is for the Appellant / Writ Petitioner to

establish the same by filing a civil suit.”

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W.P.No.41739 of 2025

7. Aggrieved by the aforesaid order of the Court, the Petitioner had

preferred an appeal under Article 136 of the Constitution of India which came

up for admission on 27.10.2025 before the Hon'ble Supreme Court. The

Hon'ble Supreme Court by its order dated 27.10.2025 dismissed the Special

Leave Petition of the Petitioner with the following observations:-

“2. However, this order of dismissal of the special leave

petition as well as dismissal of the writ petition of the petitioner

by the High Court (vide the judgment and order of the Division

Bench under challenge) shall not preclude the petitioner to

pursue his remedy against the vendor in appropriate

proceedings before the appropriate forum, in accordance with

law.

3. Pending application(s), if any, shall stand disposed

of.”

8. It is in this background, the Petitioner has now approached this Court.

9. The learned counsel for the Petitioner submits that order of the Hon'ble

Division Bench itself came to be uploaded on 10.09.2025 and that no time has

been given to the petitioner to approach the Civil Court and that the Petitioner

preferred an appeal against the order dated 10.09.2025.

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W.P.No.41739 of 2025

10. A reading of the order dated 10.09.2025 of Division Bench indicates

that no time line was prescribed for the Petitioner to approach the Court. In any

event, the fact remains that the Petitioner’s attempt to approach the Hon'ble

Supreme Court did not yield any benefit to the Petitioner as the Special Leave

Petition was dismissed on 27.10.2025 by the Hon’ble Supreme Court. Since the

auction has already taken place on 28.10.2025, the Respondents shall keep all

further proceedings pursuant to the said auction in abeyance for a period of 60

days alone from today.

11. Meanwhile, it is open for the petitioner to approach the Civil Court

within such time to obtain any interim relief against the confirmation of sale and

issuance of sale certificates. In case the Petitioner secures such order from the

Civil Court, sale through the said auction need not be confirmed and shall await

for further orders of the Civil Court. In case the Petitioner fails to secure any

interim relief from the Civil Court, the Respondents may proceed to confirm the

auction and issue sale certificate in favour of the highest bidder.

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W.P.No.41739 of 2025

12. This Writ Petition stands disposed of with the above observations. No

costs. Connected Writ Miscellaneous Petitions are closed.

03.11.2025

Neutral Citation : Yes / No

jas

To:

1.The Tax Recovery Officer – 3

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

2.The Principal Commissioner of Income Tax -3,

Chennai,

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

3.The Chief Commissioner of Income Tax – 1,

Chennai,

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

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W.P.No.41739 of 2025

C.SARAVANAN, J.

jas

W.P.No.41739 of 2025

and

W.M.P.Nos.46782 and 46784 of 2025

03.11.2025

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W.P.No.41739 of 2025

W.P.No.41739 of 2025

and

W.M.P.Nos.46782 and 46784 of 2025

C.SARAVANAN, J.

Today, this case is listed under the caption “for being mentioned” at the

instance of the learned counsel for the petitioner and the learned Senior

Standing Counsel for the respondents after an order came to be passed on

03.11.2025 in the above Writ Petition.

2. The case of the petitioner is that the petitioner paid the Court fee on

23.11.2025 and also filed a suit before the Principal District and Sessions Court,

Kanchipuram on 19.12.2025 pursuant to order dated 03.11.2025 in the above

Writ Petition. However, the suit could not been numbered due to the ongoing

boycott by the Bar on account of the protest by the Bar in Tamil Nadu against

e-filing of proceedings.

3. The learned counsel for the petitioner submits that the petitioner cannot

be found fault with, as the delay is beyond the control of the petitioner. It is

further submitted that the petitioner is a bona fide purchaser of the property

which originally belonged to M/s. Sally Thermoplastic India Limited and that

the petitioner is entitled to protection under Proviso to Section 281(1) of the

Income Tax Act, 1961.

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W.P.No.41739 of 2025

4. On the other hand, the learned Senior Standing counsel for the

respondents submits that the sale has already been concluded on 28.10.2025 and

that the Income Tax Department is holding a Demand Draft for a sum of

Rs.42,00,00,000/- from the highest bidder, namely M/s.V.V. Automotive

Components Private Limited.

5. The learned Counsel for the aforesaid highest bidder is also present

before this Court today, though the said highest bidder is not a party to the

present Writ Petition. It is submitted that the Income Tax Department is bound

to issue a Sale Certificate in favour of the highest bidder, namely M/s.V.V.

Automotive Components Private Limited and that the said Sale Certificate has

to be registered with the Registering Authority. It is further submitted that the

Income Tax Department is unable to encash the Demand Draft given by the said

bidder and issue a Sale Certificate in favour of the said highest bidder.

6. The learned Senior Standing counsel for the respondents drew the

attention of the Court to Rule 63 of the Second Schedule to the Income Tax Act,

1961 and Section 293 of the Income Tax Act, 1961.

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W.P.No.41739 of 2025

7. I have considered the submissions of the learned counsel for the

petitioner and the learned Senior Standing Counsel for the respondents.

8. Allusion to Section 63 of the Second Schedule to the Income Tax Act,

1961 is misplaced.

9. Rule 63 of the Second Schedule to the Income Tax Act, 1961 has to be

read in conjunction with Rule 62 of the Second Schedule to the Income Tax Act,

1961.

10. As per Rule 62 of the Second Schedule to the Income Tax Act, 1961,

the buyer / purchaser has a right to apply for cancellation of the sale before the

Tax Recovery Officer on the ground that the defaulter had no salable interest in

the property sold.

11. It is only in the context of Rule 62 of the Second Schedule to the

Income Tax Act, 1961, Rule 63 of the Second Schedule to the Income Tax Act,

1961 has to be interpreted where no application is made for setting the sale

under foregoing the Rule or where such an application is made or disallowed by

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W.P.No.41739 of 2025

the Tax Recovery Officer, the Tax Recovery Officer shall make an order

confirming the sale and there upon the sale shall become absolute.

12. Thus, the situation that is under contemplation in the present case is

not governed by Rule 62 and 63 of the Second Schedule of the Income Tax Act,

1961.

13. As per Sub-Rule 2 to Rule 63 of the Second Schedule to the Income

Tax Act, 1961, where such application is made and allowed, and where, in the

case of an application made to set aside the sale on deposit of the amount and

penalty and charges, the deposit is made within thirty days from the date of the

sale, the Tax Recovery Officer shall make an order setting aside the sale.

14. Therefore, the contention of the learned Senior Standing Counsel for

the respondents based on Rule 63 of the Second Schedule to the Income Tax

Act, 1961 has to be rejected.

15. It is further noticed that the order dated 03.11.2025 passed by this

Court has not been appealed against so far by the Income Tax Department.

Therefore, the right that has accrued to the petitioner by virtue of the aforesaid

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W.P.No.41739 of 2025

order, cannot be diluted. The interests of the petitioner, the highest bidder,

namely M/s.V.V. Automotive Components Private Limited as well as the

Income Tax Department have to be adequately protected.

16. Therefore, to balance the interests of all the parties, the following

directions are issued:

i.The Income Tax Department is permitted to encash the Demand Draft

furnished by the highest bidder, namely M/s.V.V. Automotive

Components Private Limited and confirm the sale and issue a Sale

Certificate in favour of the said highest bidder namely M/s.V.V.

Automotive Components Private Limited without prejudice to the rights

of the petitioner to assail such a sale in favour of the highest bidder.

ii.Therefore, the petitioner is granted liberty to have the suit numbered

before the Principal District and Sessions Court, Kanchipuram, as

expeditiously as possible and shall endeavour to establish that the

petitioner is a “bona fide purchaser” and is entitled to protection under

the Proviso to Section 281(1) of the Income Tax Act, 1961.

iii.In the aforesaid proceedings, not only the Income Tax Department

represented by the Tax Recovery Officer, but also the highest bidder,

namely M/s.V.V. Automotive Components Private Limited, the Directors

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W.P.No.41739 of 2025

of M/s.Sally Thermoplastic India Limited, and the said company itself

shall be made parties.

17. It is open for the petitioner to establish their rights in the manner

known to law. The sale confirmed pursuant to the directions of this Court shall

be subject to any Order, Judgment, or Decree that may be passed by the

competent Civil Court in the proposed suit filed by the petitioner. All

contentions are left open to be canvassed by all parties before the Civil Court.

18. The Registry is directed to issue a fresh order copy to the parties

concerned.

05.01.2026

Neutral Citation : Yes / No

av

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W.P.No.41739 of 2025

To:

1.The Tax Recovery Officer – 3,

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

2.The Principal Commissioner of Income Tax -3,

Chennai,

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

3.The Chief Commissioner of Income Tax – 1,

Chennai,

Income Tax Department,

No.121, Nungambakkam High Road,

Chennai – 600 034.

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W.P.No.41739 of 2025

C.SARAVANAN, J.

av

W.P.No.41739 of 2025

and

W.M.P.Nos.46782 and 46784 of 2025

05.01.2026

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