The binding nature of circular instructions issued by the Central Board of Direct Taxes and the need to regulate proceedings based on subsequent events and circular instructions.

K.S. Puttaswamy, J.—These appeals and cross appeals are directed against a common order made by the Income tax Appellate Tribunal, Bangalore Bench (Tribunal), on June 30, 1975, in Appeals Nos. I.T.A. (Acq.) Nos. 31, 32, 33 and 34/Bang/1975-76, reversing the order No. C.R. 62/ 1601/73-74 Acq. (B), dated February 12, 1975, of the Inspecting Assistant Commissioner of Income Tax, Acquisition Range, Bangalore, made under Chapter XX-A of the Income Tax Act, 1961 (Central Act No. 43 of 1961) ("the Act").

2. An immovable property bearing No. 1011/44, situated on Ist Main Road, IV Block, Rajajinagar, Bangalore-10, was owned by Smt. Girijamma (transferor). On August 3,1973, the said transferor, under a registered instrument of transfer, transferred the said property to Sriyuths B. M. Byrappa, B. C. Hanumanthappa, B. M. Marappa and B. V. Nagaraj of Bangalore (transferees) for a consideration of Rs.80,000.

3. On February 1, 1974, the Inspecting Assistant Commissioner recorded his reasons under section 269C of the Act to the effect that the fair market value of the property exceeded the apparent consideration by more than 15% and directed the issue of notices on the same day under section 269D of the Act. While the notices issued under section 269D(1) of the Act was published in the Official Gazette on May 18, 1974, the notices issued to the transferees and the transferor were served on March 25, 1974, and August 20, 1974, respectively. The other notices under section 269D of the Act were duly effected in due course.

4. In response to the notices served on them, the transferees and the transferor filed their objections before the Inspecting Assistant Commissioner, inter alia, contending that the apparent consideration stipulated in the instrument of transfer was the real consideration paid and received and the same was the fair market value of the property as on August 3, 1973. On an examination of the objections filed, the evidence placed before him and affording an opportunity of hearing, the Inspecting Assistant Commissioner, with the previous approval of the Commissioner, found that the fair market value of the property exceeded the apparent consideration by more than 25% and made an order on February 12, 1975, under section 269F(6) of the Act for the acquisition of the property under Chapter XX-A of the Act.

5. Against the order of the Inspecting Assistant Commissioner, the transfers filed appeals in Appeals Nos. 31, 32, 33 and 34 of 1975, under section 269G of the Act before the Tribunal. Before the hearing of their appeals, the appellants sought leave of the Tribunal to urge an additional ground to the effect that the proceedings initiated by effecting service of notices on them even before the publication of the notice in the Official Gazette was an invalid assumption of jurisdiction by the Inspecting Assistant Commissioner and the completion of proceedings for acquisition were void at law and invalid. On allowing the said additional ground to be urged, the Tribunal by its order dated June 30, 1975, has accepted the same and has allowed the said appeals, however, holding against them on the fair market value of the property acquired by the Inspecting Assistant Commissioner.

6. Aggrieved by the finding recorded by the Tribunal on the fair market value of the property, the transferees have filed ITA Nos. 1 to 4 of 1976 before this court under section 269H of the Act. Aggrieved by the same order of the Tribunal invalidating his order, the Inspecting Assistant Commissioner has filed ITA Nos. 2 to 5 of 1978 under section 269H of the Act. In the appeals filed by the transferees, the Inspecting Assistant Commissioner is the common respondent. In the appeals filed by the Inspecting Assistant Commissioner, the transferees are the respondents. In the course of our order hereafter, we will refer to the transferees as the appellants and the Inspecting Assistant Commissioner as the respondent.

7. At the hearing of the appeals, Sri G Sar