K. Nakayana Kurup, J. 1. The petitioner's father, Shri K. P. Madhavan, has acquired Kanom right over 76.92 cents of land in old Sy. No. 139/3A, R. Sy. No. 5.15-686 of Katathikunnu Desom and Amsom in Kozhikode town by virtue of document No. 731 of 1955 of Kozhikode Sub-Registrar Office. He has also obtained certificate of purchase No. 3579 of 1977 in respect of 70 cents in R. Sy. No. 5.15-686. As such he has become the absolute owner of the said land. By document No. 133 of 1982 the petitioner's father has settled 20.40 cents of land out of the above land to his wife, Mrs. Radha, the mother of the petitioner. The petitioner's mother died leaving behind her husband, five sons, two daughters and three daughters of a deceased daughter as her legal heirs. Thus Mr. Madhavan, the husband of the late Radha, the sons and daughters inherited one-ninth (1/9th) share each and the three daughters of the deceased daughter together inherited one-ninth share in 20.40 cents of land which belonged to the late Mrs. Radha. Shri K.P. Madhavan also settled 7.26 cents of land, and 10.66 cents of land by assignment deeds No. 49 of 1989 and No. 12 of 1987, respectively, to one of his daughters, Smt. Shalini Ravindran. A portion of the property was acquired for road and another encroached. Thus, the total extent of land left with Mr. Madhavan and the legal representatives of the late Radha is 37.5 cents. Out of 37.5 cents of land, 16.65 cents belong exclusively to Mr. Madhavan and 20.40 cents belong to the legal heirs of the late Radha. Mr. Madhavan, on his own and as the legal heir of the late Radha and the other legal heirs entered into an agreement with Southern Investments for sale of the entire 37.5 cents of land for a total consideration of Rs. 52,36,000 out of which Rs. 26,97,335 is the sale consideration of the land belonging exclusively to Mr. Madhavan and his undivided one-ninth share in 20.40 cents which belonged to the late Radha. The sale consideration for the undivided share of each of the sons and daughters of the late Radha is Rs. 3,17,333 and that of each of the daughters of the deceased daughter is Rs. 1,05,778. The petitioner has executed a power of attorney in favour of his father, Mr. K. P. Madhavan, authorising him to execute the sale deed in respect of his undivided share in 20,40 cents of land of which the sale consideration is Rs. 3,17,333. Exhibit P-1 is the true copy of the sale deed which is returned with exhibit P-2 memo stating :
"This document is returned for want of income-tax clearance certificate as per Registration Rules 30(iii)."
2. The prayer in this original petition is for the issuance of a writ of certiorari to quash exhibit P-2 and for a writ of mandamus commanding the second respondent to register the original of exhibit P-1 forthwith and for other incidental reliefs. Heard learned counsel for the petitioner and Shri P. K. R. Menon, learned standing counsel appearing for the Income-tax Department at length.
3. According to the petitioner, Rule 30(iii) has been introduced in the Registration Rules (Kerala) to conform with Section 230A of the Income-tax Act and Section 230A and Rule 30(iii) are attracted only when the value of the land purports to transfer, assign, limit or extinguish the right, title of any person to or in any property exceeds the limit prescribed therein and not the value of the entire land, whereas according to the Revenue, going by circular dated December 10, 1992, what is relevant is the valuation of the property and not merely the interest to be transferred in the property. I do not think that the submission advanced by the Revenue is well founded for the reasons to be stated hereinafter.
4. Section 230A(1) of the Income-tax Act as amended by Section 41 of the Finance Act, 1995, reads :
"230A. (1) Notwithstanding anything contained in any other law for the time being in force, where any document required to be registered under the provisions of Clause (a) to Clause (e) of Sub-section (1) of Section 17 of the Indian Registration Act, 1908 (16 of 1908), purports to transfer, assign, limit or extinguish the right, title or interest of any person to or in any property valued at more than five lakh rupees no registering officer appointed under that Act shall register any such document unless the Assessing Officer certifies that.-
(a) such person has either paid or made satisfactory provision for payment of all existing liabilities under this Act, the Excess Profits Tax Act, 1940 (15 of 1940), the Business Profits Tax Act, 1947 (21 of 1947), the Indian Income-tax Act, 1922 (11 of 1922), the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1957 (29 of 1957), the Gift-tax Act, 1958 (18 of 1958), the Super Profits Tax Act, 1963 (14 of 1963) and the Companies (Profits) Surtax Act, 1964 (7 of 1964) ; or
(b) the registration of the document will not prejudicially affect the recovery of any existing liability under any of the aforesaid acts."
5. Consequent on the amendment of the Income-tax Act mentioned above Rule 30(iii) of the Registration Rules (Kerala) was also amended with effect from July 1, 1995, and the same is published in the Gazette dated July 5, 1995-RR4-34540 of 1994. After the amendment the rule reads :
"30(iii). Where any document which purports to transfer, assign, limit or extinguish the right, title or interest of any person to or in immovable property other than agricultural land valued at more than five lakhs rupees no registering officer shall register any such document unless accompanied by a certificate from the Income-tax Officer to the effect that :
(a) such transferor, assignor, etc., has paid or made satisfactory provision for payment of all existing liabilities under the Income-tax Act, 1961 (43 of 1961), the Excess Profits Tax Act, 1940 (15 of 1940), the Business Profits Tax Act, 1947 (21 of 1947), the Indian Income-tax Act, 1922 (11 of 1922), the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1957 (29 of 1957) and the Gift-tax Act, 1958 (18 of 1958) ; or
(b) the registration of the document will not prejudicially affect the recovery of any existing liability under the aforesaid Act."
6. Thus, the question that arises for consideration is what is the value to be reckoned, i.e., whether the value of interest in property sought to be transferred or the value of the entire property so as to determine the applicability of Section 230A of the Income-tax Act as well as Rule 30(iii) of the Registration Rules. On a close reading of Section 230A of the Income-tax Act and Rule 30(iii) of the Registration Rules, I have no doubt in my mind that whatever be the value of the entire property, the value of the undivided interest of the petitioner being less than the statutory ceiling (viz., five lakhs rupees)--since out of the entire estate left intestate by the deceased mother of the petitioner 1/9th share alone is sought to be transferred under exhibit P-1--he is entitled to get exhibit P-1 registered without insisting for production of the income-tax clearance certificate. Since the second respondent has not adverted to the fact that the value of the undivided interest of the petitioner is below the statutory limit, exhibit P-2 insisting on production of the income-tax clearance certificate reckoning the whole value of the property sought to be transferred cannot be legally sustained. In my opinion, the very purport of the Act and the rule is to make the value of interest to be transferred the relevant criterion and not the value of the property as a whole and a departmental interpretation in the form of a clarification as produced by the Revenue which runs counter to the statutory mandate cannot be given effect to. The view I am taking is fortified by the following rulings :
In Samudrala Ganesh Rao v. State of A. P. [1988] 174 ITR 304, the Andhra Pradesh High Court has considered this question and held as follows (page 306) : "Section 230A(1) provides that registration cannot be effected unless a certificate is obtained from the concerned Income-tax Officer with regard to the clearance of all the existing liabilities regarding direct taxes. Sub-section (1) provides that the clearance certificate is necessary if the valuation exceeds Rs. 50,000. The valuation of Rs. 50,000 is with reference to the right, title or interest of any person in the property. The criterion should be the value of the property or the interest of the person in such property that is sought to be transferred. The authorities have taken into consideration the value of the entire property, though it is stated that the interest of the sisters relinquishing the property is only 3/40 ths share. It is obvious that they are not concerned with the major chunk of the property and their right is restricted only to 3/40ths share and they can either transfer or relinquish to the extent of 3/40ths share only. It is only with respect to this extent that the income-tax clearance certificate can be insisted upon. It is not disputed that the valuation of this interest is only Rs. 21,775 and it does not exceed Rs. 50,000. Therefore, Section 230A is not applicable and, hence, the authorities erred in insisting upon the production of the income-tax clearance certificate." The Madras High Court in N. C. Rangesh v. Inspector General of Registration [1991] 189 ITR 270, held as follows (page 282) : "In my view, the criterion to obtain a certificate either under Section 230A of the Income-tax Act, 1961, or under Chapter XX-C should be the value of the property or the interest of the person in such property that was sought to be transferred and it was only with respect to that extent that the income-tax clearance certificate could be insisted upon. As such, in my view, in all these cases before me, neither Section 230A of the Income-tax Act, 1961, nor Chapter XXC will apply, especially when an undivided share is sold under a valid sale deed or under a valid agreement of sale as provided in the Transfer of Property Act. This view of mine is supported by the view taken by a single judge of the High Court of Andhra Pradesh which is reported in Samudrala Ganesh Rao v. State of A. P. [1988] 174 ITR 304. In that case, when the valuation of the interest of 3/40ths share was only Rs. 21,775, the learned single judge has held that Section 230A of the Income-tax Act is not applicable. With respect, I agree with the view of the learned judge of the High Court of Andhra Pradesh in the abovementioned case. In my view, it is the proper construction to be put on the provisions of the income-tax Act with which we are concerned." Again, the Madras High Court in R. Lokeswari v. State of Tamil Nadu [1992] 196 ITR 501, held as follows (page 504) : "If the owners of the shares of immovable property desire to seil their respective shares and execute a sale deed covering such share and if that share happens to be a value less than rupees two lakhs, no certificate under Section 230A of the Income-tax Act is required." In A. Mohan v. Dr. Vivekanan-dan [19941 206 ITR 634 (Mad), besides the question discussed above, the validity of the circular produced by counsel for the Revenue before the Madras High Court also arisen for consideration. After referring to the decision cited supra, it was held as follows (page 639) : "I am in entire agreement with the view expressed by the learned judges in the decision referred to above. The position of law which emerges from the decisions referred to above is this : According to Section 230A(1) of the Act, an income-tax clearance certificate is necessary only when the value of the right, title or interest of the transferor sought to be transferred under the document exceeds the limit prescribed under the said section. According to the plain words of Section 230A(1), the criterion should be the value of the property or the interest of the person in such property that is sought to be transferred and not the value of the property as a whole in which such interest of the transferor is sought to be transferred. In view of the above legal position, I have no hesitation in rejecting the contention of learned counsel for respondents Nos. 4 and 5 that it is not the value of the interest of the person transferring the property but the value of the property as a whole in which such interest is sought to be transferred that is the relevant criterion for the purposes of Section 230A. For the same reason, it has to be held that the clarification issued by the Central Board of Direct Taxes in its circular dated December 10, 1992 (see [1993] 199 ITR (St.) 8), does not give the correct interpretation of the term 'value' as mentioned in Section 230A." The Karnataka High Court in M. Mohan Shet v. State of Karnataka [1994] 206 ITR 174 has also taken the same view.
7. For the aforesaid reasons, I am satisfied that exhibit P-2 is one issued without jurisdiction and the same is liable to be quashed. Accordingly, I quash exhibit P-2 and direct the second respondent to register exhibit P-1 forthwith without insisting the production of the income-tax clearance certificate.
8. Original petition is allowed as above.