The main legal point established in the judgment is that the agreement for sale, conferring a right to possession and enjoyment of the property, fell within the scope of Chapter XX-A of the Income-tax Act, and the mere filing of Form 37-1 did not confer jurisdiction to invoke Chapter XX-C.

( 1 ) THIS petition initially filed to challenge the vires and legislative competence in enacting Chapter XX-C of the Income-tax Act but in View of C. B. Gautam Vs. Union of India [1993] 199 ITR 530, the petitioner confines his arguments to the applicability of Chapter XX-C of the Income-tax Act on the ground that the said Chapter which has come into force on 1. 10. 1986 could not retrospectively apply in respect of agreements for transfer of property which had already been executed before that date and transfer has taken place within the definition of Chapter XX-A of the Act, which was the law prior to Chapter XX-C of the Income-tax Act.

( 2 ) FACTS giving rise to the present petition are that on 1. 1. 1983, petitioner entered into an agreement of said dated 1. 1. 1983 with respondent no. 4. Pursuant to that agreement it was agreed that property situated at 23, Jorbagh, New Delhi was to be purchased by the petitioner for a total sale consideration of Rs. 41. 50 lakhs. In terms of the said agreement for sale, petitioner had paid total amount of Rs. 11. 50 lakhs to respondent no. 4 and it was agreed that the balance amount would be paid thereafter. The operation of the said agreement for sale was extended from time to time. The effect of such extension and supplemental agreements was to extend the date for execution and registration of the sale-deed consequent upon non-receipt of requisite approval from various authorities. It is contended before me that after the date of the execution of the agreement for sale, the petitioner paid further amounts aggravating Rs. 10 lakhs to respondent No. 4 of which Rs. 5 lakhs was paid on 1. 2. 1983 and Rs. 2. 50 lakhs was paid in the year 1985. One important factor which has to be taken note of is that possession of the property was delivered by respondent no. 4 to the petitioner company on 1. 1. 1983 itself, which finds mention in terms of clause (3) of the Agreement for sale dated 1. 1. 1983. A separate letter dated 1. 1. 1983 was also executed to evidence handing over of possession to the petitioner company on 1. 1. 1983.

( 3 ) AT the relevant time under Section 269 AB of the Income-tax Act, 1961, respondent No. 4 and the petitioner filed Form No. 37-EE in respect of aforesaid transaction on 31. 3. 1983. In the said Form 37-EE it was also clearly mentioned that the possession of the property has been handed over by respondent no. 4 to the petitioner on 1. 1. 1983.

( 4 ) THE Agreement of Sale dated 1. 1. 1983 was duly registered by the IAC Acq. Range III vide his order dated 10. 2. 1983. IAC Acq. Range III initiated proceedings for acquisition of the aforesaid property vide its order dated 10. 10. 1983 issued under Section 269 D (1) of the Act and also published the same in the official gazette. Valuation proceedings were taken up by the revenue officer prior to acquisition of the aforesaid property. A notice of hearing under Section 269 F of the Act was later issued in respect of the aforesaid acquisition proceedings on 9. 10. 1986. During the pendency of the Writ petition, however, it has been stated by the counsel for the petitioner that the property has been de-acquired pursuant to the proceedings under Section 269 AB of the Act.

( 5 ) IN terms of the amendment in Finance Act, 1986, the provision of Chapter XX-C was inserted in place of Chapter XX-A of the Income-tax Act. Pursuant to the notification published by the Central Government in the official Gazette dated 7. 10. 1986, the Central Government notified the said Chapter XX-C would come into force on 1. 10. 1986 so far as the Union Territory of Delhi and certain other specific areas were concerned and pursuant to the notification dated 4. 9. 1986, respondent no. 3 -Central Board of Director Taxes notified the Income-tax (Seventh Amendment) Rule, 1986 and the same came into force on 1. 10. 1986. The said Rules were notified to prescribe certain procedural matters relating to the operation of the provisions of Chapter X