Section 81 - Transfer of property to be void in certain cases
Section 81 - Invalidity of Property Transfers to Evade Government Revenue
This section explains that if a person owes money and then tries to transfer or charge their property—through sale, mortgage, or any other method—to someone else with the goal of avoiding paying taxes or other government dues, that transfer will be considered invalid. However, there are exceptions to this rule. The transfer will not be considered void if it is done for a fair price, in good faith, and without knowledge of ongoing proceedings or taxes owed by the person. Additionally, if the transfer is made with the prior permission of the appropriate officer, it will also not be void. Essentially, this section is designed to prevent individuals from dodging their financial obligations to the government by improperly transferring their assets to others. It ensures that any such transfers meant to defraud the government can be nullified unless they meet specific criteria that demonstrate fairness and transparency.
Note: It is an AI generated summary for reference purpose only.
81. Transfer of property to be void in certain cases
Where a person, after any amount has become due from him, creates a charge on or parts with the property belonging to him or in his possession by way of sale, mortgage, exchange, or any other mode of transfer whatsoever of any of his properties in favour of any other person with the intention of defrauding the Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the said person:
Provided that, such charge or transfer shall not be void if it is made for adequate consideration, in good faith and without notice of the pendency of such proceedings under this Act or without notice of such tax or other sum payable by the said person, or with the previous permission of the proper officer.
