1987 Supreme(Cal) 177

High Court Of Calcutta
Dipak Kumar Sen, Shyamal Kumar Sen
COMMISSIONER OF INCOME-TAX - Appellant
Versus
SMT.ASHA DEVI AGARWAL - Respondent
Income-Tax Appeal 1  Of  1985
Decided On : 06/02/1987

The publication of a notice under Section 269d(1) of the Income-tax Act, 1961, is complete when it is printed in the Official Gazette, even if it is not brought to the actual notice of the persons concerned.

Headnote:

ACQUISITION OF PROPERTY - LIMITATION - PUBLICATION OF NOTICE - VALUATION OF PROPERTY - INCOME-TAX ACT, 1961, CHAPTER XXA, SECTIONS 269C(1), 269D(1), 269F(6) - CIRCULAR NO. 455 DATED MAY 16, 1986.

Fact of the Case:

The assessee, Asha Devi Agarwal, purchased an undivided 1/5th share of premises No. 15, Cossipore Road, Calcutta, for a consideration of Rs. 90,000 on September 7, 1977. The competent authority initiated proceedings for the acquisition of the property on May 8, 1978, by issuing a notice under Section 269d(1) of the Income-tax Act, 1961. The notice was printed in the Gazette of India on June 10, 1978, and copies of the Gazette were received on July 25, 1978, and made available for sale to the public. The assessee filed written objections to the acquisition proceedings, contending that they were barred by limitation as the notice under Section 269d(1) was published after nine months from the date of execution and registration of the deed of conveyance. The Inspecting Assistant Commissioner of Income-tax disposed of the proceedings by an order dated July 27, 1984, holding that the notice was duly served and the fair market value of the property exceeded the declared consideration by more than 70%. The assessee appealed to the Income-tax Appellate Tribunal, which held that the proceedings were barred by limitation as the publication of the notice was complete only when the Gazette containing the notice became available to the public.

Finding of the Court:

The High Court noted that there were conflicting decisions of different High Courts on the question of whether the publication of a notice under Section 269d(1) of the Income-tax Act, 1961, was complete when it was printed in the Official Gazette or when it was made available to the public. The Court inclined towards the view that the publication would be complete when the Gazette was printed in the Official Gazette, but it did not express a final opinion on this point as it intended to dispose of the appeal on merits.

Issues: 1. Whether the acquisition proceedings were barred by limitation. 2. Whether the Tribunal erred in law in accepting the assessee's contentions in respect of the valuation of the property and rejecting the valuation as made by the valuer for the Department.

Ratio Decidendi: 1. On the issue of limitation, the High Court held that the Tribunal's decision that the proceedings were barred by limitation was erroneous. The Court noted that the Supreme Court had held in State of Maharashtra v. Mayer Hans George that the publication of a notification in the Official Gazette was effective even if it was not brought to the actual notice of the persons concerned. The Court also noted that the Gujarat High Court had followed Mayer Hans George in Shilaben Kanchanlal Rana and held that a notice under Section 269d(1) of the Income-tax Act, 1961, had been published within the prescribed period. The Court further noted that a learned judge of the Karnataka High Court had taken the same view as the Gujarat High Court in Girnar Builders (P.) Ltd. v. IAC of I. T. 2. On the issue of valuation, the High Court held that the Tribunal did not err in law in accepting the assessee's contentions and rejecting the valuation as made by the valuer for the Department. The Court noted that the Tribunal had taken into account the totality of the facts and circumstances of the case, including the various disadvantages pertaining to the property, and had arrived at its own conclusion. The Court held that it could not be said that the Tribunal's decision was perverse or based on no relevant evidence.

Final Decision: The High Court dismissed the Revenue's appeal and affirmed the order of the Tribunal. The Court also noted that the Central Board of Direct Taxes had issued a circular directing the Revenue to drop acquisition proceedings if the apparent consideration of the property involved was below Rs. 5 lakhs. The Court observed that the apparent consideration for the entire premises in the instant case was only Rs. 4,50,000 and that there was no reason why the circular should not be implemented.