TMI Blog1998 (7) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... ublished in "Gujarat Samachar" dated February 22, 1991. A copy of the advertisement is annexed to the petition. The trust invited offers from willing bidders. It is asserted by the petitioners that wide publicity was given to the said advertisement through various newspapers at Bombay in the State of Maharashtra as well as in the State of Gujarat. The publication was made in as many as 16 leading newspapers. The names of the newspapers were also mentioned in annexure-"B" to the petition. The last date of receipt of offers was April 2, 1991. In response to the said advertisement, the petitioners submitted their bid in a sealed envelope. A meeting of the bidders was called. According to the petitioners, though their initial offer was Rs. 50,00,000, it was raised to Rs. 86,00,000. It was the highest offer which was accepted by the trust on certain terms and conditions arrived at between the parties. Since the property belonged to a public trust, the transaction was subject to permission of the Charity Commissioner under section 36 of the Bombay Public Trusts Act. The trust was required to make an application in accordance with the provisions of section 269UC of the Act. Necessary in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and germane considerations have been ignored by the appropriate authority in that a number of sale transactions took place of the properties situate in Ward No. 11, where the property in question is situate, between January 1989, and December 1990, and even though such sale instances have been brought to the notice of the appropriate authority after the first order was passed when an application was made on October 12, 1991, they were not considered by the appropriate authority. Even mention was not made of any of the sale instances in the order of rectification which was passed by the appropriate authority on October 23, 1991. Nothing is also stated in the affidavit-in-reply filed by the Commissioner of Income-tax about those sale instances, even though counter-affidavit is filed before two days, i.e., on July 1, 1998, after about eight years of the order passed by the appropriate authority. Mr. Soparkar submitted that the property was purchased not secretly or by a private negotiation from a private party. Respondent No. 2 is a public trust registered under the Bombay Public Trusts Act. An advertisement was issued in as many as 16 newspapers having circulation in Gujarat and Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any error of law. It was finally submitted that even if the court is satisfied that the orders passed by the appropriate authority are liable to be quashed and set aside, a writ may be issued directing the appropriate authority to apply its mind and to pass fresh orders after affording opportunity of being heard, as held in C. B. Gautam's case [1993] 199 ITR 530 (SC), by recording reasons in support of such order. Having considered the rival contentions of the parties, we are satisfied that the orders passed by the authorities are not in accordance with law and they deserve to be quashed and set aside. Though there is no provision in Chapter XX-C regarding issuing notice, calling for explanation or affording opportunity of hearing and making a reasoned order, the law is settled by a decision of the Supreme Court in C. B. Gautam's case [1993] 199 ITR 530, wherein the provisions were held to be intra vires by the Supreme Court, observing that before taking an action under Chapter XX-C, it is obligatory on the part of the appropriate authority to comply with the principles of natural justice and to pass a speaking order. in the instant case, the principles of natural justice were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true value of immovable properties that are the subject of transfer between the parties. The Central Board has pointed out in the said instructions that, in administering the provisions of the said Chapter, it has to be ensured that no harassment is caused to bona fide and honest purchasers or sellers of immovable property and there is no erosion of the confidence of the public in the sense of justice and fair play of the Income-tax Department. Paragraph 3 of the instruction makes it clear that the right of pre-emptive purchase has to be exercised by the appropriate authority only when it has good reason for acquiring the property. When the property purchased by the Central Government by an order of an appropriate authority is put up for sale, the reserve price is required to be fixed at a minimum of 15 per cent. above the purchase price shown as the apparent consideration under the agreement between the parties. Thus, it is pointed out by the Board that the right of pre-emptive purchase has to be exercised only if the fair market value is found to be at least 15 per cent. more than the apparent consideration. The instruction further provides that, in coming to a conclusion as afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition on the ground that principles of natural justice were not complied with and the order was not a speaking order, as reasons were not recorded, it would be proper if the appropriate authority is directed to reconsider the matter in accordance with law and pass a fresh order after extending opportunity of hearing and by recording reasons in support of the order. Mr. Soparkar, however, submitted that as observed by the Supreme Court in C. B. Gautam's case [1993] 199 ITR 530, and by this court in various cases, a positive finding of undervaluation of apparent consideration and evasion of tax can be said to be primary facts and if no such allegations have been made nor such satisfaction is recorded by the appropriate authority, there is no question of sending back the matter to the appropriate authority and consequential direction should be issued to the authority to comply with its statutory duty in accordance with law. Relying on Om Shri Jigar Association, it was submitted that respondent No. 2 is a public trust and any sale by such trust is subject to permission by the Charity Commissioner under section 36 of the Bombay Public Trusts Act. Such action is a relevant factor w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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