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IN THE HIGH COURT OF CALCUTTA
T.S. Sivagnanam, Hiranmay Bhattacharyya, JJ.
Ashwika Kapur - Appellant
Versus
Union Of India And Others - Respondent
A.P.O No. 287 of 2018, W.P No. 2821 of 1993
Decided On : 24-02-2022
Natural Justice - Income Tax - Section 269 UD of the Income Tax Act, 1961 - Summary of Acts and Sections: The court discussed the violation of principles of natural justice and the valuation of the property under Section 269 UD (1) of the Income Tax Act, 1961. The court highlighted the legal provisions related to the principles of natural justice, valuation of property, and the authority's jurisdiction under Section 269 UD (1). The court's decision was influenced by the violation of natural justice and the incorrect valuation of the property.
Fact of the Case:
The case involved a dispute over the order of pre-emptive purchase of a flat under Section 269 UD (1) of the Income Tax Act, 1961. The original writ petitioner challenged the order, contending that it was arbitrary, unreasonable, and in violation of natural justice. The appropriate authority's valuation of the property was also challenged as excessive and based on incorrect methods. The writ petitioner also argued that the appropriate authority failed to consider various factors affecting the property's value.
Finding of the Court:
The court found that the order of pre-emptive purchase was vitiated due to a gross violation of principles of natural justice. The court also held that the appropriate authority's valuation of the property was incorrect and exceeded its jurisdiction. The court concluded that the appropriate authority's decision was unsustainable and set it aside.
Issues: The court considered two main issues: 1) Whether the purchase order was vitiated due to a breach of natural justice, and 2) Whether the authorities considered extraneous material in passing the order.
Ratio Decidendi: The court's decision was based on the gross violation of natural justice and the inappropriate valuation of the property by the appropriate authority. The court emphasized that fair hearing and compliance with natural justice principles are essential in decision-making by statutory authorities exercising quasi-judicial powers.
Final Decision: The court allowed the appeal, set aside the order passed in the writ petition, and directed the appropriate authority to issue the necessary certificate under Section 269 UL of the act. The vendors were instructed to proceed with the sale transaction in favor of the appellant within a specified timeframe.
JUDGMENT
1. This intra court appeal is directed against the order passed in W.P No. 2821 of 1993 dated 14.08.2018. The said writ petition was filed challenging the order dated 29.07.1993 passed by the appropriate authority, under Section 269 UD of the Income Tax act, 1961 (the act for brevity).
2. The original writ petitioner is Mr. ashwani Kapur, and the appellant before us is his daughter Ms ashwika Kapur, as the original writ petitioner passed away on 27.03.2020.
3. Before we proceed further, it would be necessary to note as to who were the parties to the writ petition. as mentioned, the original writ petitioner was Mr. ashwani Kapur, the first respondent Union of India through the Secretary, Ministry of Revenue, Government of India, New Delhi, the second respondent, the appropriate authority, Income Tax Department, Calcutta, the third respondent, Superintending Engineer, appropriate authority, Income Tax Department, Kolkata, the fourth respondent Mrs. Mina Gupta, the fifth respondent Dr. ambar Gupta and the sixth respondent M/s. Stewart Hall (India) Limited.
4. an agreement dated 05.08.1988, was entered into between Mrs. Mina Gupta and Dr. ambar Gupta with M/s. Stewart Hall (India) Limited, agreeing to let out a flat bearing No. D-113, Tower Block, Saptaparni Cooperative Housing Society Limited, Ballygunge, Kolkata agreeing to lease out the said flat for a monthly rent of Rs. 4,000/-initially for a period of three years, renewable for a further period of two years. The original writ petitioner Mr. ashwani Kapur was employed in a senior position in M/s. Stewart Hall (India) Limited and he was permitted by his employer to occupy the flat as a licensee under the company. During February 1993, Mrs. Mina Gupta and Dr. ambar Gupta wrote to M/s. Stewart Hall (India) Limited for increase of rent by Rs. 500/- per month, agreeing that the company can continue as a tenant as long as they paid the rent on time. The company agreed to the said demand and paid increased rent of Rs. 4500/- per month from January 1, 1993 with a condition that the tenancy would continue as long as the company desired to which Mrs. Mina Gupta and Dr. ambar Gupta agreed. as mentioned, the original writ petitioner Mr. ashwani Kapur was occupying the flat as a licensee of the company. an agreement for sale dated 21.04.1993 was entered into between Mrs. Mina Gupta and Dr. ambar Gupta and the original writ petitioner/licensee agreeing to sell the flat, subject to the subsisting tenancy, in favour of Mr. ashwani Kapur for a sale consideration of Rs. 13,00,000/-. Mrs. Mina Gupta and Dr. ambar Gupta filed Form 37 I dated 04.05.1993 before the appropriate authority, the original second respondent, under Chapter XX-C of the act, in the capacity of transferors and the original writ petitioner was the transferee. It was specifically stated that the flat was occupied by Stewart Hall (India) Limited as a tenant and possession would be granted to the original writ petitioner (licensee) only after no objection certificate is issued by the appropriate authority. On 17.05.1993, a team of valuers from the office of the appropriate authority visited the flat. Thereafter, on 15.07.1993 the appropriate authority addressed both the transferors and the transferee raising various queries. This communication is said to have been received on 17.07.1993 to which the original writ petitioner filed a reply on 20.07.1993. The case of the original writ petitioner is that on 26.07.1993 late in the afternoon, he received a show cause notice dated 21.07.1993 fixing the date of hearing on 27.07.1993 at 11:00 aM. along with the show cause notice, a valuation report valuing the flat at Rs. 28,35,000/- was enclosed wherein there was reference to three sale instances. The writ petitioner's case is that no documents relating to the sale instance were provided along with the show cause notice and in none of the sale instances, the property was shown to be a tenanted property or a property developed by a
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