1994 Supreme(Cal) 328

High Court Of Calcutta
Tarun Chatterjee
DWARKANATH CHATTERJEE AND ORS. - Appellant
Versus
UNION OF INDIA (UOI) AND ORS. - Respondent
Matter 1481  Of  1994
Decided On : 09/30/1994

The appropriate authority has no power under Chapter XX-C of the Income-tax Act, 1961 to consider anything other than the question of issue of an order for the purchase of the said premises for the apparent consideration.

Headnote:

INCOME TAX - PURCHASE OF IMMOVABLE PROPERTY - APPROPRIATE AUTHORITY - JURISDICTION - SCOPE OF CHAPTER XX-C OF THE INCOME-TAX ACT, 1961 - FORM NO. 37-I - SECTION 269UD - WHETHER APPROPRIATE AUTHORITY HAS POWER TO GO INTO THE QUESTION OF TITLE OF THE TRANSFERORS - WHETHER THE FIRST AND SECOND PROVISOS TO SECTION 269UD ARE MANDATORY - WHETHER APPROPRIATE AUTHORITY CAN BE GIVEN AN OPPORTUNITY TO RECONSIDER THE STATEMENT OF THE ASSESSEE FILED IN FORM NO. 37-I OF THE ACT AND TO MAKE UP ITS MIND TO PURCHASE THE SAID PREMISES ON THE APPARENT CONSIDERATION MENTIONED IN THE AGREEMENT.

Fact of the Case:

The writ petitioners, joint owners of the premises, entered into an agreement on January 28, 1994, with the 6th writ petitioner to develop the said premises. By the Finance Act, 1986, with effect from October 1, 1986, Chapter XX-C consisting of Sections 269u to 269uo was inserted in the Income-tax Act, 1961, with the object of inducing the transferors and the transferees to declare the full amount of consideration in their agreements for transfer. The appropriate authority passed an order on May 31, 1994, which was challenged in the writ application. The appropriate authority had made findings on the title of the writ petitioners in respect of the said premises and came to a finding that the right of writ petitioners Nos. 1 to 5 to transfer the premises was doubtful and invalid.

Finding of the Court:

1. The appropriate authority has no power under Chapter XX-C of the Act to consider anything other than the question of issue of an order for the purchase of the said premises for the apparent consideration. 2. The appropriate authority had acted beyond and in excess of its jurisdiction by deciding the title of writ petitioners Nos. 1 to 5 in respect of the said premises and by coming to a finding that the right of writ petitioners Nos. 1 to 5 to transfer the premises was doubtful and invalid. 3. The first and second provisos to Section 269ud of the Act are mandatory in nature and no order can be passed after the expiry of three months, as mentioned in the first and second provisos to Section 269ud of the Act. 4. The appropriate authority is not entitled to an order permitting them to reconsider their case for purchase of the said premises.

Issues: 1. Whether the appropriate authority has power under Chapter XX-C of the Act to consider anything other than the question of issue of an order for the purchase of the said premises for the apparent consideration. 2. Whether the appropriate authority had acted beyond and in excess of its jurisdiction by deciding the title of writ petitioners Nos. 1 to 5 in respect of the said premises and by coming to a finding that the right of writ petitioners Nos. 1 to 5 to transfer the premises was doubtful and invalid. 3. Whether the first and second provisos to Section 269ud of the Act are mandatory in nature and no order can be passed after the expiry of three months, as mentioned in the first and second provisos to Section 269ud of the Act. 4. Whether the appropriate authority is entitled to an order permitting them to reconsider their case for purchase of the said premises.

Ratio Decidendi: 1. Section 269ud of the Act does not confer any authority, power, or jurisdiction to the appropriate authority to go into the question of title of the writ petitioners in respect of the property in question which is sought to be sold on the basis of the agreement for sale. 2. The appropriate authority, while dealing with Form No. 37-I filed under Section 269ud of the Act, is not conferred with any power to go into the question of title or any other question except what has been held hereinabove. 3. The appropriate authority had or has any power under Chapter XX-C of the Act to engage itself in any exercise not concerning the order for purchase of an immovable property in question by the Central Government for the apparent consideration. 4. The question of giving further opportunity to the Central Government to make up their mind to purchase the said premises at this stage is not permissible in law in view of the mandatory provisions in the first and second provisos under Section 269ud of the Act. 5. The proviso to Section 269ud of the Act is a mandatory provision and in the absence of any power given in the Act itself to extend, the period of limitation, there cannot be any question to direct the appropriate authority to reconsider the question of purchase when such period had already expired.

Final Decision: The writ petition was allowed, the impugned order of the appropriate authority dated May 31, 1994, was set aside, and the respondents were directed to issue a "no objection" certificate under Section 269ul of the Act for the registration of the sale deed of the said premises within three months from the date of communication of the order.