Income tax in recovery preoceedings by tro

An assesse is a firm having tax due amount of 3 crores no appeal is pending.prior to issue of notice of demand of tax by the ito property had been transfered to 3rd party and the 3rd party had mortgaged the said property with a financier by a registered mortgage deed.Now the tro issue da notice to the defaulter assesse fixing a date of auction saying that"the property is in attachment with the income tax department for the due amount .

whether the tro can conduct auction without giving notice to the transferee and the mortgagee?

whether the tro can transfer the property without the interference of registration department ?

whether the tro can transfer the property of his own with out the interference of the transferee ?

First the facts, as gathered from your post:

1. The demand was raised and acknowledged by the firm

2. No appeal is pending

3. The property was transferred before receipt of demand notice from the ITO. In other words, proceedings were pending at the time of transfer.

Firstly, the firm has transferred the property and so now the issue is between the third party and the TRO, though the property was with the firm at the time of assessment proceedings.

Secondly, Section 281 will be attracted where the transfer can be declared null and void. The methodology of doing this is not clear.

If by reading the above, you think the firm and its partners are safe, you are mistaken. Partners are jointly and severally liable for the arrears as per Partnership Act and the Income Tax Act.

Now for your questions:

1. Yes, if the facts of the property having been transferred is not brought to his notice and the new owner doesn't file his objections.

2. Yes. The Registration Department is as the name suggests only for registering properties and the encumberances on these properties.

3. Refer 1.