TMI Blog2005 (9) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... - This petition is directed against the order dated April 27, 1993 (exhibit F), passed by the first respondent, the appropriate authority, appointed by the Central Government under section 269UB of the Income-tax Act, 1961 ("the Act"), exercising the right of pre-emptive purchase under section 269UD(1) of the Act of the property in question owned by petitioners Nos. 2 and 3 for the apparent consideration of Rs. 24,00,000. The facts: The facts in short are: Petitioner No. 1 is an intending purchaser; whereas petitioners Nos. 2 and 3 are the owners of the immovable property being residential apartment/flat admeasuring about 767 square feet situate at 103, Miranda Apartments, Veer Sawarkar Marg, Bombay-400 014 ("the said property"). Petitioners Nos. 2 and 3 entered into an agreement of sale on February 6, 1993, to sell their property for a total consideration of Rs. 24,00,000 in favour of petitioner No. 1. The entire payment of Rs. 24,00,000 was paid by the first petitioner to the vendors, petitioners Nos. 2 and 3 immediately on signing of the said agreement. Apart from this, the first petitioner had also incurred expenditure in the sum of Rs. 1.89 lakhs by way of registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, during the pendency of this petition, came to know that by an order dated May 16, 1993, bearing No. AA/Bom/Certs/11353/1993-94, respondent No. 1, the appropriate authority has issued no objection certificate permitting transfer of flat No. 602 admeasuring about 690 square feet located on the 6th floor of "Miranda Apartment" situate at Veer Sawarkar Marg, Mahim, Mumbai 400 014. The agreement for sale of this flat was executed on March 27, 1993, (almost after a period of one month from the date of subject agreement) and the consideration agreed was in the sum of Rs. 19.71 lakhs which on calculation worked out to Rs. 2,856 per square foot. As against in the subject agreement dated February 6,1993, as already stated hereinabove, the sale price was agreed to be at the rate of Rs. 3,129 per square foot which was much higher than that of the transaction for which NOC was issued by respondent No. 1. The petitioners have submitted that the flat referred to above which fetched a price of Rs. 2,856 is on the 6th floor whereas the subject flat is on the 1st floor of the said Miranda Apartment. He submits that in Mumbai higher floor apartments fetch more price. He submits that the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed two identical and contemporary transactions in respect of the residential apartment located in the same building known as Miranda Apartments referred to hereinabove by the petitioners in respect of which the respondents did issue NOC under section 269UL(3) of the Act, though the said transactions had disclosed comparatively lower sale price than that of the subject transaction. In addition thereto, the petitioners submit that the respondents while dealing with their contentions in their counter-affidavit have taken a totally contrary and inconsistent stand than that of the stand taken in the impugned order by stating that the rates of sale of two different flats in the said building were not comparable. Learned counsel appearing for the petitioners, thus, submits that the impugned order is not only liable to be quashed and set aside but the petition is liable to be allowed with exemplary costs. Per contra: Mr. Asokan, learned counsel appearing for the Revenue, conceded that so far as the show-cause notice is concerned it was vague. He also agrees that the sale transaction disclosed in the petition with respect to the flats located in the Miranda Apartment can be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners deserves acceptance that the show-cause notice was vague and they were denied fair opportunity of being heard by the respondents, as such the impugned order is in violation of section 269UD(1) of the Act. This action of the respondents is in gross violation of the principles of natural justice. The petitioners rightly relied upon the judgment of this court in the case of Nirmal Laxminarayan Grover (Mrs.) [1997] 223 ITR 572 wherein the Division Bench of this court has held thus: "In the absence of the particulars of the material or the reason(s) being disclosed in the show-cause notice for entertaining a tentative or a prima facie view that the value of the suit land is grossly understated in the agreement of sale between the parries, the transferor and the transferee have no real opportunity to meet the case of the appropriate authority or the Income-tax Department concerned in that regard and hence there is non-compliance with the basic principles of natural justice." In the above view of the matter, the impugned order is liable to be quashed and set aside being in breach of principles of natural justice. The second contention raised by the petitioners that the prim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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