2000 Supreme(SC) 963

2000(4) Supreme 273
SUPREME COURT OF INDIA
(From Delhi High Court)
D.P. Wadhwa and Ruma Pal, JJ.
DLF Universal Ltd. —Appellant
versus
Appropriate Authority & Anr. etc. —Respondents
Civil Appeal No. 2423 of 1999
With
Civil Appeal Nos. 4825 to 4831, 3793, 5502 and 5503 of 1999 and 2005 of 2000
Decided on 4-5-2000
Counsel for the Parties :
For the Appearing Parties : K.N. Rawal, C.S. Vaidyanathan, R.N. Trivedi, Additional Solicitor Generals Harish N. Salve, P. Chidambaram, M.L. Verma, F.S. Nari­man, M.S. Syali, Sr. Advocates, Ms. Vijaya Lakshmi Menon, S. Agarwal, Ranbir Chandra, S.W.A. Quadri, C.V.S. Rao, Ms. Sushma Suri, Ms. Geetanjali Mohan, Satyam Sethi, Naresh K. Sharma, Ratan Lal, K. Prakash Anand, Ms. Ekta Kapil, S.K. Dwivedi, T.C. Sharma, Ms. Neelam Sharma, Advocates.

IMPORTANT POINTS
1. Rule 48L of the Income Tax Rule is only directory and not mandatory.
2. Terms ‘agreement for transfer’ in Rule 48L of the Income Tax Rules in fact means statement in Form 37-I.
3. Fifteen days period as mentioned in Rule 48L of the Income Tax Rule is to be counted from the date when agreement for transfer is reduced into writing in Form 37-I.

Headnote:Income Tax Act, 1961—Section 269UD—Income Tax Rules—Rule 48L—Compulsory purchase of immovable property by Central Government—Order of Appropriate Autho­rity—Time limit for filing Form 37-I —Power to condone delay in filing Form 37-I—Term ‘agreement for transfer’ in Rule 48L means statement in Form 37-I and not agreement for sale—15 days period as mentioned in Rule 48L is to be counted from date when agreement for transfer is reduced into writing in Form 37-I—Rule 48L is only directory and not mandatory—Opportunity must be given to rectify defects, if any, in Form 37-I within 15 days or such extended period—In case of real estate developers Form 37-I cannot be rejected or treated to have not filed on ground particulars of paras 12 and 13 have not been given—Once Form 37-I is filed Appropriate Authority has only two option, either to grant no objection certificate or to invoke ­Section 269UD—It cannot pass any other order.

       Agreement for transfer and statement in Form 37-I are two different documents. As rightly held by the High Court agreement for transfer can be oral as well as in writing but then this agreement for transfer has to be reduced in writing in Form 37-I. High Court has held that in certain section in Chapter XX-C ‘agreement for transfer’ in fact means statement in Form 37-I as mentioned in sub-para (iii) of its findings. The question that arises for consideration is if the period of 15 days, as mentioned in Rule 48L is to be calculated from the date when a prospective buyer applies for allotment of a flat or from the date when a regular agreement called the “Apartment Buyers’ Agreement” is entered into ­between the transferor and the transferee or when the agreement for transfer is reduced into writing in Form 37-I. Appropriate Authority has held that 15 days are to be counted from the date when booking of the flat is done by the DLF or Ansal as the letter for booking and the official endorsements thereon constitute a regular agreement between the parties. This question, however, becomes academic if we hold that 15 days period is to be counted from the date when agreement for transfer is reduced into writing in the form of statement (Form 37-I). Can it be said under Rule 48L that the term ‘agreement for transfer’ mentioned in clause (c) of sub-rule (2) thereof in fact means statement in Form 37-I? If we take the literal meaning, this provision will become rather otiose. An ‘agreement for transfer’ is inter-parties and that can always be changed. That the term ’agreement for transfer’ in fact means statement in Form 37-I, we can get clue from Section 269UK which says that no person shall revoke or alter an agreement for the transfer of an immovable property or transfer such property in respect of which a statement has been furnished ­under Section 269UC. Reference to this statement is certainly to Form 37-I, it would mean that agreement for transfer can be changed by the parties but they have been forbidden from doing so after statement in Form 37-I has been furnished. We have, therefore, to give appropriate meaning to the term ‘agreement for transfer’ appearing in clause (c) of sub-rule (2) of Rule 48L and cannot just adopt literal meaning. Foundation for exercise of jurisdiction by the Appro­priate Authority under Section 269UD is the statement in Form 37-I and not agreement for transfer. (Paras 7 & 8)

       Appropriate Authority is obliged to give opportunity to the parties to rectify the defects, if any, in Form 37-I within a period of 15 days or such extended period as the Appropriate Authority may allow. If we consider Section 269UC(4) vis-a-vis Rule 48L scenario or setting is rather incongruous. If statement in Form 37-I has no defect Rule 48L mandates that it should be filed within 15 days but if it is defective then opportunity can be granted by the Appropriate Authority under sub-section (4) of Section 269UC to correct mistakes even beyond the period of 15 days after filing of the statement in Form 37-I. It would appear that no thought was given to amend clause (c) of sub-rule (2) of Rule 48L while inserting sub-section (4) of Section 269UC of the Act. It would further appear as rightly held by the High Court that Rule 48L is only directory and not mandatory. Submission of Form 37-I within the prescribed period is not the only requirement of Section 269UC. Then under Section 278AA if a person proceeded against under ­Section 276AB and shows reasonable cause for his failure to the statement in Form 37-I within the pre­scribed period, he cannot be ­punished. We do not think that the provi­sion of Section 276AB makes Rule 48L in any way mandatory. (Paras 11 & 12)

       Provision of Chapter XX-C do not require the parties to enter into more than one agreement for transfer. It is on the basis of the terms of that agree­ment for transfer which is reduced into writing in the shape of Form 37-I that the Appropriate Autho­rity has to make up its mind to pass an order under Section 269UD. These pro­visions do not contemplate filing of more than one Form 37-I and grant of more than one no objection certificate by the Appropriate Authority. We may in this connection refer to sub-sections (6) and (7) of ­Section 269UE. Immovable property, ­subject matter of transfer, is of the nature referred to in sub-clause (ii) of clause (d) of Section 269UA and when an order is made under Section 269UD with respect to that property, it shall place the Central Government in the same position in relation to such right as the person in whom such a right would have continued to vest if such order had not been made. The whole agreement for transfer and Form 37-I are before the Appropriate Authority. It has to make its mind once and for all whether to pass an order under Section 269UD or not. If not, it is bound to grant no objection certificate as required by Section 269UL. (Para 13)

       One of the grounds of rejection of Form 37-I was that it did not contain particulars required by paras 12 and 13 given in the From. It must be seen that Form 37-I is a composite form used whether the transaction is sale, lease or exchange. It may not, therefore, be necessary that all the paras are required to be filled in when the transaction is either for sale or lease or exchange. Para 12 requires the particulars about the acquisition of the property which is pro­posed to be transferred. Requirement of para 13 is that names of the persons interested in the property be given and so also the considera­tion specifying their shares and basis thereof. As far as paras 12 and 13 are concerned, these requirements and particulars in the case of agreement for transfer as in the present case would appear to be rather unnecessary. When the Appropriate Authority pointed out that this was a defect and required Ansal to remove the defect, it was submitted by Ansal that it had purchased agricultural lands from time to time, obtained the licenses for sale of plots, houses, flats etc. and after obtaining the licenses, plots, houses and flats etc. were being sold regularly. It was further submitted that since last so many years permission under Chapter XX-C was also being given regularly and further that the lands were being developed by Ansal and were in their possession. Similarly, DLF had stated in Form 37-I with reference to paras 12 and 13 that immovable property was acquired from October 20, 1980 onwards and cost of acquisition of land worked out Rs. 1,534.00 per square meter. We do not think anything more was required to be stated in paras 12 and 13 of Form 37-I. As pointed out by this Court in C.B. Gautam’s case (1993) 199 ITR 530 that the very historical ­setting in which the provisions of Chapter XX-C were enacted indicates that it was intended to be resorted to only in cases where there is an attempt at tax evasion by significant under-valuation of immovable property agreed to be sold. It is the fair market value of the immova­ble property, which is to be found out and if the Appropriate Authority is satisfied that the apparent consideration shown in the agreement for sale is less than the market value by 15 or more it may draw a presump­tion that this under valuation has been done with a view to evading tax. While examining the statement in Form 37-I this object has to be kept in view by the Appropriate Authority. It ­cannot act in a mechani­cal fashion and pass its order on irrelevant considerations. Sub-section (4) of Section 269UC is not a ­device for the Appropriate Authority to raise ­irrelevant considerations ignoring the very object of Chapter XX-C. Paras 12 and 13 of Form 37-I cannot be said to be ­relevant in the present cases. We, therefore, fail to understand as to what prevented the Appropriate Authority in exercise ­jurisdiction under Section 269UD. The view which we have taken of Rule 48L there is no delay in submission of statement in Form 37-I in any of the cases. Thus, taking note of all the relevant consideration, we are of the opinion that the Appropriate Authority was not correct in passing orders that the statement in Form 37-I was deemed never to have fur­nished, thus, creating a statement for sale of the flats which have by now been built but could not be transferred. (Para 14)

       Statement filed in Form 37-I was in order. Since the Appropriate Authority did not pass any order within the prescribed period it had to issue no objection ­certificate under Section 269UL. It is no use at this distant time sending the matter back to the Appropriate Authority for it again to ­apply its mind as period prescribed within which it has to pass order for purchase of the property by the Central Government has long since expired. The Appropriate ­Authority did not make any order within three months of its receipt of the said state­ment for purchase by the Central Government of the immovable property in question. That being the position, the Appropriate Authority is duty bound to issue no objection certificate to the transfer of the property in the circumstances of the case we can also exercise juris­diction under ­Article 142 of the Constitution. (Paras 16 & 19)