TMI Blog1982 (3) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... owed 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 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 Rs. 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 manne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for hearing and as such they sent a telegram asking for adjournment of the case to May 9, 1979. On May 9, 1979, the petitioner along with his advocate appeared before the competent authority and pointed out to him that all the information asked for had already been supplied on April 2, 1979. However, as the valuation report of the said property had not been supplied earlier, the same was produced before him on May 9, 1979. A complete written reply along with the valuation report was filed with the competent authority on May 9, 1979. On May 10, 1979, the competent authority, by an order in writing on the order sheet, stated that he did not consider it necessary to initiate the proceedings. The exact order is " No action is necessary. " It is alleged in the petition that in spite of the aforesaid order dated May 10, 1979, the petitioners were surprised to receive a notice under s. 296D(1) of the Act dated July 26, 1979. By the said notice the petitioner and respondents Nos. 3 to 5 were called upon to file objections, if any, to the acquisition of the property in question. The reasons recorded are to the following effect: " Reasons for initiating acquisition proceedings It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the competent authority had no material before him and had not satisfied himself before issuing such notice. It is further stated that the Commissioner at best has the supervisory powers over the competent authority and was not competent to direct the competent authority to initiate proceedings which are of a judicial nature. It is further stated that no fresh material had come into the possession of the competent authority after May 10, 1979, and as such the issue of the impugned notice was in excess of jurisdiction. In the counter-affidavit filed by the competent authority, namely, Shri R. B. L. Aggarwal, IAC, the broad facts as alleged in the petition have not been disputed. It is, however, pleaded in the counter-affidavit that the proceedings under s. 269C were only administrative proceedings and as such the Commissioner was competent to issue instructions to the competent authority. According to the averments in the counter-affidavit up to the stage when the competent authority issues notice under s. 269D(1) of the Act, the proceedings under Chap. XX-A of the Act are of an administrative nature and only after a notice has been issued under s. 269D(1) that quasi-judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Valuation Officer (valuation cell) dated June 7, 1979, was submitted wherein the fair market value of the property was assessed at Rs. 2,68,000. The competent authority considered the said report in detail and, after giving various reasons for not accepting the report, came to the conclusion: " It is quite obvious from the facts as mentioned above that the report of the Assistant Valuation Officer is incorrect and unreliable and he has made a high-pitched estimate of the fair market value of the property in question. " From the letter dated 12-7-1979 it appears that after the aforesaid letter, the Commissioner wrote another letter to the competent authority on 6-7-1979, wherein it was observed I am not very happy the way this 37G Form has been handled by IAC (Acq). IAC's report attacking the valuation cell's report is in bad taste. In spite of a large number of complaints in this case forwarded to IAC (Acq.), he ignored them, closed the matter in preliminary inquiry and on top of it, communicated it to the vendee. This process is not being followed by him in all cases, nor by other IACs (Acq.). He should be asked to initiate the proceedings. In the letter the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1979, was issued to the petitioner. Section 269C of the Act reads as under "269C. Immovable property in respect to which proceedings for acquisition may be taken.-(1) Where the competent authority has reason to believe that any immovable property of a fair market value exceeding twenty-five thousand rupees has been transferred by a person (hereafter in this Chapter referred to as the transferor) to another person (hereafter in this Chapter referred to as the transferee) for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer ; or (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act or the Wealth-tax Act, 1957 (27 of 1957), the competent authority may, subject to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns precedent for the formation of such a belief existed and whether the competent authority had applied his mind to the said relevant conditions. The competent authority is a statutory authority and must act himself and is not permitted to abdicate his powers and responsibility in favour of any one, not even in favour of the Commissioner. In Purtabpur Company Ltd. v. Cane Commissioner of Bihar, AIR 1970 SC 1896, it was held (p. 1901): " In the matter of exercise of the power under rule 6(1), the State Government and the Cane Commissioner are concurrent authorities. Their jurisdiction is co-ordinate. There was some controversy before us whether a Cane Commissioner who had reserved an area for a sugar factory for particular period can alter, amend, or modify the area reserved in the middle of the period fixed. As seen earlier, 208 villages with which we are concerned in this case were reversed for the appellant for two seasons, i.e., 1966-67 and 1967-68. The contention was that the Cane Commissioner could not have interfered with that reservation within that period. The High Court has come to the conclusion that the Cane Commissioner who had the power to make the reservation in que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. IAC [1980] 122 ITR 72, laid down that the tests regarding " reason to believe " in s. 269C are the same as those under s. 147 of the Act. In CIT v. T. R. Rajakumari [1974] 96 ITR 78 (Mad), the proceedings under s. 147(a) of the Act were annulled on the ground that the notice had been issued on the directions of the Commissioner and the ITO had not entertained a belief that the income had escaped assessment due to the non-disclosure by the assessee of the material facts for the assessment year. It was held that a condition precedent for initiating reassessment proceedings is the reasonable belief of the ITO that income had escaped assessment and the ITO not having formed that belief was not competent to initiate proceedings even though on facts it was established that there was a non-disclosure by the assessee. In the well-known case of Barium Chemicals Ltd. v. Company Law Board [1966] 36 Comp Cas 639; AIR 1967 SC 295, it was held that though the discretion conferred to order an investigation is administrative and not judicial, if it could be shown that the Board had, in fact, not formed an opinion, its order could be successfully challenged. In Sarabhai M. Chemicals Privat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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