Important Point
Merely because no appeal is provided for under the Statute against an order passed by the Appropriate Authority under Chapter XX-C of the Income-Tax Act, the Supervisory power of the High Court under Article 226 of the Constitution does not get enlarged not the High Court can exercise an appellate power.

Headnote:(i) Income Tax Act, 1961-Chapter XX-C, Section 269UD-Constitution of India-Article 226-Acquisition of immovable property by Central Government - Writ against purchase order under Section 269UD -Scope of powers of writ Court-Merely because no appeal is provided for against order of Appropriate Authority directing compulsory acquisition by the Government, Supervisory powers of High Court does not get enlarged nor High Court can exercise an appellate power.
       Held : The parameters for exercise of supervisory jurisdiction of the High Court under Article 226 of the Constitution, while examining the decision of an inferior tribunal, has no connection with the question whether an appeal is provided for against the said order of the tribunal under the statute in question. As has been held in several decisions of this Court, the power being supervisory in nature in exercise of such power, a finding/conclusion of an inferior tribunal can be interfered with if the High Court comes to the conclusion that in arriving at the conclusion the tribunal has failed to consider some relevant materials or has considered some extraneous and irrelevant materials or that the finding is based on no evidence or the finding is such that no reasonable man can come to such a conclusion on the basis of which the finding has been arrived at. This being the settled position, it is difficult to sustain a plea that when the order of the tribunal does not provide for an appeal, the High Court can get its jurisdiction enlarged and exercise an appellate power while examining the correctness of the conclusion arrived at by such tribunal. In the case of C.B. Gautam v. Union of India & Ors. 1993(199) ITR 530 where the provisions of Chapter XX-C had been assailed as being ultra vires the Constitution Bench of this Court negatived the contention raised that the provisions are arbitrary since no appeal or revision has been provided against the order made by the Appropriate Authority for compulsory purchase of immovable property on the ground that the provisions of said Chapter could be resorted to only when there is an attempt at tax evasion by significant under-valuation of immovable property agreed to be sold and further reasons are required to be recorded and disclosed to the affected parties and opportunity to be heard is required to be given before making an order for purchase. This Court ultimately came to the conclusion that the power of the Appropriate Authority is not arbitrary and the pre-conditions engrafted in the provisions must be satisfied for invoking the power to make an order for compulsory acquisition. This being the position, wee fail to understand how the supervisory power of the High Court while examining the correctness of the conclusion arrived at by such Appropriate Authority could get enlarged merely because there is no appeal or revision against the order of the Appropriate Authority. It may be stated here that on the materials if two views are possible, one which has been given by the inferior tribunal and the other which the High Court may on examining the materials itself came to a conclusion, then also it would not be possible for the High Court to substitute its conclusion for that of the tribunal. In the aforesaid premises, we are of the considered opinion that merely because no appeal is provided for against the order of the Appropriate Authority, directing compulsory acquisition by the Government, the supervisory power of the High Court does not get enlarged nor the High Court can exercise an appellate power. (Para 6)
       (ii) Income Tax Act, 1961-Section 269UD-Compulsory purchase of immovable property by Central Government - Order of Appropriate Authority - Validity of -Sale agreement showed price at Rs. 650 per square feet-Appropriate Authority concluded that fair market value could not be less than Rs. 850 per square feet-Agreed price is sale agreement less by more than 15%-Reason adduced by vendor that it was forced sale to meet immediate need for money-Not acceptable on facts-High Court in writ petition held that order of Appropriate Authority had been arrived at on consideration of relevant and germane materials-On writ appeal Division Bench held that Appropriate Authority had come to conclusion by taking into account sale instances which were not comparable - Holding that Appropriate Authority had no relevant material to arrive at correct valuation, Division Bench quashed order of Appropriate Authority-Not sustainable - High Court exceeded its jurisdiction in interfering with conclusion of Appropriate Authority by embarking upon an inquiry as an Appellate Authority and recording by its own conclusion-Decision of a Division Bench vitiated.
       Held : On examining the order passed by the Appropriate Authority for arriving at a conclusion as to what would be the fair market value of the property in question agreed to be sold, we find that the said Appropriate Authority did consider all the germane and relevant materials produced before it in course of the proceedings and formed its opinion that there is under-statement of consideration in the agreement dated 25.9.95 by an amount more than 15% of the fair market value. On the basis of several sale transactions which are all contemporaneously made and which have the same potentiality and situated in the same locality, the Appropriate Authority came to the conclusion that the fairer market land rate could not be less than Rs. 850 per square feet. Further, in the absence of any irrebutable materials adduced on behalf of transferor or transferee as to why in the impugned transaction the property has been agreed to be sold @ Rs. 650 per square feet, the natural presumption arises that it was with a view to attempt to evade tax. In fact in Gautam’s case referred to supra [1993(199) ITR 530] this Court had held that the provisions of Chapter XX-C can be resorted to only where there is a significant under-valuation of the property to the extent of 15% or more in the agreement of sale, as evidenced by the apparent consideration being lower than the fair market value by 15% or more and a presumption of an attempt to evade tax may be raised by the Appropriate Authority concerned where the aforesaid circumstances are established but such a presumption in undoubtedly a rebutable one. In the case in hand, the plea of the transferor that he agreed to sell the land at a lower price as he was in urgent need of money to defray the medical expenses on account of kidney transplantation was duly considered but negatived inasmuch as the transplantation was done in June, 1994 and the agreement to sale was made in September, 1995. The Authority also took into consideration the fact that the transferor was highly qualified doctor and had held various offices with distinction in a carrier spanning over four decades in India and abroad. No other reason having been advanced and the only plea advanced having been considered and rejected and in our view rightly, it is difficult for us to sustain the argument advanced by the learned counsel for the respondent that the transferor has been able to rebut the presumption arising out of a grossly low valuation on the ground of force sale. Having examined the order of the Appropriate Authority we have no hesitation to come to the conclusion that the Appropriate Authority passed the order for compulsory purchase under Section 269UD of the Act after giving due opportunity to the parties concerned of hearing and after recording the reasons as to the fair market value of the land and further after recording a finding that there has been a significant under-valuation of the property to the extent of more than 15% in the agreement of sale. Such conclusion of the Appropriate Authority were based on consideration of relevant materials produced in course of the proceedings and the authority was fully justified in drawing the presumption that the under-valuation had been done with a view to evade the tax and the transferor could not rebut the said presumption by adducing any positive ground. The High Court, therefore, exceeded its jurisdiction in interfering with such conclusions of the Appropriate Authority by embarking upon an inquiry as an Appellate Authority and by recording its own conclusion is substitution of the conclusion of the tribunal and, therefore, the said decision of the High Court gets vitiated. In the aforesaid premises, we set aside the impugned judgment of the Karnataka High Court in Writ Appeal No. 1233 of 1996 and affirm the decision of the Appropriate Authority. The writ petition filed before the High Court stands dismissed. (Para 7)

Judgment

Pattanaik, J.-This appeal is directed against the judgment and order dated 6th March, 1997, passed by the Division Bench of Karnataka High Court in Writ Appeal No. 1233 of 1996. The said Writ Appeal arises out of a proceeding initiated under Chapter XX-C of the Income Tax Act. The property in question is situated in Block 5, Jayanagar, Bangalore-560 measuring 85 feet from east to west and 122 feet from north to south bearing No. 483/24. Respondent No. 2 Shri A.G. Krishna is the owner of the property. He entered into an agreement of sale with respondent No. 1 Smt. Sudha Patil for a consideration of 63,44,000 under agreement dated 25.9.1995. The Appropriate Authority under the Income Tax Act in exercise of its powers under Section 269-UD of the Act passed an order for purchase of the property by the Central Government on an amount equal to the amount of consideration mentioned in the agreement to sale after due notice to the transferor of the property and after arriving at a conclusion that the property in question has been undervalued by a sum of Rs. 200/- per square feet. The aforesaid order was passed by the Appropriate Authority on 28.2.1996. It may be stated that the Appropriate Authority took into consideration the various sale instances relied on by the parties as well as the gradual trend in the enhancement of the value of the property. The said order of the Appropriate Authority was assailed by respondent No. 1, the proposed transferee, by filing a Writ Petition which was registered as Writ Petition No. 7586 of 1996. The learned Single Judge of the Karnataka High Court dismissed the said Writ Petition by order dated 22nd March, 1996, holding inter alia that the order of the Appropriate Authority does not suffer from any legal infirmity and the said order has been passed after following the prescribed procedure and the conclusion of the Appropriate Authority has been arrived at on consideration of all relevant and germane materials produced in the course of the proceeding. Respondent No. 1, however, challenged the said order by preferring an appeal and the Division Bench by the impugned judgment and order dated 6th March, 1997, came to hold that the Appropriate Authority has come to the conclusion about the valuation of the land by taking into consideration the sale instances which are not comparable with the property in question and thereby the conclusion is vitiated. The Division Bench also came to the conclusion that the concerned authority had no relevant material to arrive at the correct valuation of the property and further the method adopted by the department was defective and consequently the order made by the authorities concerned is vitiated. With these conclusions the order passed by the Appropriate Authority having been quashed and the Writ Appeal having been allowed the said Appropriate Authority is in appeal in this Court.

2. Mr. Rawal, learned Additional Solicitor General appearing for the appellant contended that the Division Bench of the High Court committed gross error of law and exceeded its jurisdiction in interfering with the finding of the Appropriate Authority with regard to the market value of the land in question, in the absence of any procedural irregularity and in the absence of a finding by the High Court that the Appropriate Authority had considered irrelevant materials or have excluded relevant materials from consideration. A finding of an inferior Tribunal like the Appropriate Authority under the Income Tax Act can be interfered with by the High Court when the Court comes to the conclusion that the Tribunal has not considered relevant materials or it has considered irrelevant or extraneous materials or the conclusion is one which no reasonable man can come to the said conclusion on the materials on record or the conclusion is one which based on no evidence. Since in the case in hand the Appropriate Authority took the relevant sale instances in the locality to arrive at a concl

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1998 Supreme(SC) 1123

Cases Referred (3)