JUDGMENT

Goswamy J. This petition, under art. 226 of the Constitution of India, is directed against the notice dated July 26, 1979 (annex. L), issued under s. 269D(1) of the I.T. Act, 1961, for quashing the directions issued y the Commissioner of Income-tax to that effect.

2. The petitioner along with respondents Nos. 3, 4 and 5 purchased property bearing No. XIV-219, Gali Post Office, Sadar Bazar, Delhi, by a sale deed dated November 20, 19978, for a consideration of Rs. 1,70,000. The sale deed was registered on November 28, 1978. The property was purchased from a charitable trust known as Sethani Indermani Jatia Charitable Trust, having its office at Seth Ganga Sagar-ki-kothi, Junction Road, Khurja, Uttar Pradesh. Before selling the property, the trustees of the said trust filed an application under s. 7 of the Charitable and Religious Trusts Act, 1920, in the court of the district judge. The district judge, vide his order dated February 24, 1978, allowed the application and observed :

"This property is in the occupation of various tenants from whom the annual rental income is Rs. 25,515.60. Some litigations between the trust on the one side and the tenants on the other are pending in the courts. A sum of Rs. 4,826 is payable as property tax to the Municipal Corporation of Delhi per annum. An expenditure of Rs. 3,600 per annum is incurred by the trust on the collection of rent from the tenants. The litigation expenses amount to R. 5,000 per annum. It is alleged that the net income of the trust from this property is thus reduced to Rs. 12,000 per annum. The trustees, therefore, decided, vide resolution dated July 3, 1977, to sell this property. It is alleged that a sale price between Rs. 2,50,000 and Rs. 3,00,000 can be realised by the sale of this property. Notice of this application to the general public was published in the newspapers. It was also pasted on the building proposed to be sold. None has come forward to contest this application.

I am of the opinion that the decision of the trustees is wise and sound in the circumstances brought to light. I would accordingly advise the trustees to sell this property in a manner so as to realise the higher possible sale price available in the market. As at present advised, I would direct them not to sell this property for a rice less than rupees two lakhs."

3. Half of the total property was accordingly sold by the trust to the petitioner and respondents Nos. 3 to 5 for a consideration of Rs. 1,70,000. It appears that certain interested parties including the tenants in the property made certain representations to the Asst. Commissioner of Income-tax who is the competent authority for this purpose under Chap. XX-A of the I.T. Act, 1961 (hereinafter called "the Act"). On receipt of those complaints, the competent authority initiated proceedings under s. 269C of the Act and a letter of inquiry dated March 30, 1979, was issued to the vendees. The necessary information as required in the said letter was furnished by the vendees, vide their letter dated April 6, 1979. A further letter dated April 30, 1979, was sent to the vendees by the competent authority. By the said letter, the vendees were directed to appear before the competent authority on May 5, 1979, at 11.50 a.m. with the following documents in order to determine the fair market value of the property :

i. a duly attested photostat copy of the original sale deed;

ii. a duly attested/photostat copy of the agreement to the purchase of the above property indicating whether it was registered or not, if any;

iii. layout plan/building, plan with covered area;

iv. in the case of the building, mention the year/years of construction and the year of completion with cost of construction;

v. whether the property is freehold/leasehold (state unexpired period of lease);

vi. whether the property is owner-occupied or tenanted (full details of rental income with names of the tenants);

vii. whether the property is for industrial/ commercial/