1992 (1) TMI 50 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the appropriate authority u/s 269UD of the Income-tax Act, 1961.
2. Waiver of the period of limitation prescribed u/s 269UD(1).
3. Issuance of "no objection certificate" u/s 269UL(3).

Summary:

Jurisdiction of the Appropriate Authority u/s 269UD:
The petitioners entered into an agreement for the sale of property and filed a statement u/s 269UC of the Income-tax Act, 1961. The appropriate authority, respondent No. 1, refused to grant a "no objection certificate" on the grounds that the agreement was premature due to the Urban Land (Ceiling and Regulation) Act, 1976. The Supreme Court's decision in Appropriate Authority v. Tanvi Trading and Credits P. Ltd. [1991] 191 ITR 307 established that the appropriate authority did not have the jurisdiction to adjudicate upon the legality of the transaction and could only pass an order of purchase. Consequently, the orders dated June 12, 1989, and October 25, 1990, were quashed.

Waiver of the Period of Limitation u/s 269UD(1):
The respondents argued that the petitioner had waived the limitation period by filing a fresh application. However, the court held that the period of limitation prescribed u/s 269UD(1) could not be waived, as it would be prejudicial to the citizen. The court emphasized that waiver is a conscious and voluntary relinquishment of a known right, which was not evident in this case. The conduct of the petitioner subsequent to the order dated June 12, 1989, was deemed irrelevant.

Issuance of "No Objection Certificate" u/s 269UL(3):
The court held that the appropriate authority is under a mandatory obligation to issue a "no objection certificate" immediately upon the expiry of the period prescribed u/s 269UD(1). The statutory time-frame is explicit, and there is no provision for extension. The court cited various precedents, including Tanvi Trading and Credits P. Ltd. [1991] 188 ITR 623 and Irvin Almeida v. Union of India [1992] 197 ITR 609, which supported the issuance of a "no objection certificate" when the appropriate authority fails to exercise its jurisdiction within the prescribed period.

Conclusion:
The court quashed the impugned orders dated June 12, 1989, and October 25, 1990, and directed the respondents to issue the "no objection certificate" u/s 269UL(3) within two weeks. The application was allowed without any order as to costs.