The valuation method adopted by the appropriate authority for a property encumbered with unevictable tenancy should be on the basis of the rental method, taking into account the encumbrance of the tenancy.

( 1 ) A notice for pre-emptive purchase under Section 269ud of Chapter XX-C, IT Act, 1961, as it stood then, was initiated against the assessee-respondent. The said proceeding was challenged in writ petition No. 1833 of 1993, by the assessee. By a judgment and order dt. 15th Nov. , 2000 the learned Single Judge of this Court was pleased to quash the said notice and the proceeding. It is against this order the Revenue has preferred this appeal.

( 2 ) THE learned counsel for the appellant-Revenue Mr. Agarwal has pointed out that while exercising writ jurisdiction in respect of the proceedings under Section 269ud, against which no appeal is provided for, this Court does not sit on appeal, as was decided by the apex Court in various decisions, a few of which have since been cited by him. He has then contended that the Court cannot sit on appeal with regard to the valuation given in the valuation report while deciding such a question. The learned Single Judge had, however, virtually acted as the Court of appeal. Therefore, the order should be set aside.

( 3 ) MR. Bajoria, learned Senior Counsel for the assessee-respondent, on the other hand, has contended that the object and purpose of introduction of Chapter XX-C was to prevent evasion of tax. Therefore, the provisions are to be decided in the context of the purpose and object. He has relied on the decision in C. B. Gautam v. Union of India and Ors. and has pointed out that in the said decision the apex Court had observed that in the process, a bona fide transfer may not be suspected bringing slur upon the parties who did not ever intend to evade tax. While exercising writ jurisdiction, this Court does not exercise the power of the appellant authority. Even though no appeal is provided for in Chapter XX-C, the Court can look into the perversity of the valuation made. If the valuation is not made in terms of the valuation method applicable, in such a case, the Court can interfere. According to him, it is not the procedure for valuing the property under the WT Act that is applicable. It is the system of valuation of the property as is applicable in the acquisition proceeding that is to be adopted. But, at the same time, he has relied on various decisions of this Court and other Courts where it has been held that in respect of properties under lease or tenancies, the valuation is to be made on rental method, not on the land and property method. We will refer to those decisions at appropriate stage. He has further pointed out that in this case property belonged to the trust established in Gujarat governed by the Bombay Public Trust Act, 1950. Under Section 36 of the said Act, no property belonging to a trust can be transferred without previous sanction of the 'charity Commissioner' defined in the said Act. In the present case, an application for such sanction was made before the 'charity Commissioner'. Thereupon, a notification was issued and published in newspaper. Offers were invited with a reserve price of Rs. 75 lakhs. But no one had offered except the purchaser herein being the respondent. This price was fixed at Rs. 75 lakhs together with interest @ 12. 5 per cent payable on the said amount calculated till the date of finalization of the same. Therefore, according to him, there was no scope for evasion of tax by undervaluing the property. He further contends that the property is under occupation of tenants, which was held to be an encumbrance in the valuation report itself, where it is noted that there was no possibility of eviction of the tenants. Therefore, these factors are to be weighed with, and the valuation could not have been made on the basis of future prospect of the property under tenancy. In the circumstances, according to him, this appeal should be dismissed.

( 4 ) WE have heard the respective counsel for the parties. The scope of jurisdiction under Article 226 of the Constitution in respect of a proceeding under Section 269ud of the 1961 Act is v