LAHORE: A majority of private housing societies including a top estate developer has agreed to give access to the city district revenue officials (sub-registrars, assistant commissioners and others concerned) to their offices for auditing of the record related to property transfers / transactions, deposition of government fees etc.

The development emerged after the sub-registrars of the deputy commissioner-led city district administration issued legal notices to 230 housing societies in Lahore to immediately stop internal transfers of properties without deposition of the government fees / dues such as stamp duty, registration, capital value tax (CVT) and other taxes. Through notices, the administrators of these housing schemes have been warned to give access to the revenue officials to their record by Oct 5, failing which they must be ready for a stern action from the government.

“The Board of Revenue, through its letter, has mentioned that various private housing schemes are transferring rights or interest in immovable properties in their own offices without getting the instruments registered before the office of sub-registrar. “Accordingly, it has further been stressed to compel all such societies to discontinue such malpractice and to get their instruments registered before sub-registrars,” reads the legal notice served to the managements of the private housing projects a couple of days ago.

It says the transfer of plots being made by the societies / schemes as in contravention of the section 54 of the Transfer of Property Act 1882 and section 17 (1) of the Registration Act, 1908 that clearly require that such transfer in the case of immovable property of the value of Rs100 and above or in the case of a reversion or other intangible thing can be made only by a registered instrument.

“Whereas you (housing societies) are transferring the properties on your own that in no way is permissible by law, therefore warrants stoppage immediately. This act on your part falls within the definition of violation of law, since this practice is not only causing huge financial loss to the government but also creating intricacies of law. Therefore, you are directed to stop this practice forthwith and get your documents / instruments registered with respective territorial area / sub-registrar offices,” it explains.

The notice also directs the housing societies to produce all of their record related to internal transfer of plots / properties etc before the sub-registrars within 10 days, failing which they (the government) would be left with no option but to adopt coercive measures under the prevailing law of the state.

According to an official source, who understands the revenue matters well, the Stamp Act-1899 empowers the government officers concerned under section 73 to inspect books, registers, papers, documents, proceedings etc for the purpose to secure any duty or to prove or lead to the discovery of any fraud or omission in relation to any duty. Similarly, section 11, 12 and 13 of the Finance Act 2012 empowers a collector to impound any accounts or documents produced in terms of sub-section (10) and retain the documents so long as may be deemed necessary for purpose of examination, desire production of the computer where such information are stored (in case of non-production of hard copies) and take other measures as vested under the code of civil procedure-1908.

“Majority of them have agreed to give us access to their record. A representative of the country’s top estate developer / company in private sector also had a meeting with the officials concerned in this in this regard on Saturday,” the source said. He said since sub-registrars had so far served legal notices to the private housing societies, they are likely to serve the same to the state authorities (Lahore Development Authority and others) involved in developing housing projects in public sector.

“For the first time someone has started process to carry out audit of the housing societies in this way. And it is the government’s success that the housing societies have started agreeing to give us access to their record, as it never happened before,” the source claimed.

Published in Dawn, September 30th, 2018