TMI Blog1994 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... a trust in respect of a plot of land measuring 2 bighas, 14 cottahs, 13 chittacks, together with a two-storeyed building, being premises Nos. 7 and 7/1, Keyatala Lane, P.S. Tollygunge, Calcutta. The trust was in favour of the petitioner-society. Under the terms of the trust deed, the society was to take possession of the trust estate but was to allow the settlor and her husband, the late Sambhu Nath Banerjee, during the joint lives or life of either of them to reside therein free of any rent and also to collect all rents and issues therefrom. It is only after the death of both the settlor and her husband, the confirming party, that the society will hold the property and take possession to further the objects of revival of Buddhism in India and do all such things as are required and/or conducive to the achievement of the said object, i.e., propagation of the Buddhist religion and teachings of Lord Buddha, installing and keeping installed an image of Lord Buddha in the trust estate and carrying out the daily and periodical worship and festivals of such image according to the tenets of the Buddhist religion and also arranging for lectures on panchsheels, holding meetings, gatherings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espeare Sarani, Calcutta, said to be a devotee of the faith, came forward to develop the said property, to assist the society in its endeavour to provide residence for Buddhist Monks and also to establish a Buddhist temple along with a library hall for dissemination of the teachings of Lord Buddha and the advancement of Buddhist literature for propagation of Buddhism and thereby help the petitioner-society perform its duties and obligations under the trust. The said Sanjiv Karanjai agreed to enter into a lease agreement with the first petitioner. The lease agreements are as follows : "1. Shri Sanjiv Karanjai shall be the lessee of the premises for a period of 99 years with an option to renew the said lease for a further period of 99 years. 2. As consideration he will pay to the first petitioner a premium of Rs. 5 lakhs and shall have a five-storeyed building having 15,000 sq. ft., each floor having 3,000 sq. ft. super-built covered area, including lift, at his cost and deliver it to the society, the first petitioner. 3. He will also pay Rs. 2,000 per month from the date of the lease until delivery of the said 15,000 sq. ft. super-built covered area as per choice and specifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, advised the society to accept the offer of Sri Karanjai, respondent No. 7 herein, to be the lessee of the property under the terms as indicated above. The society, however, being governed by the Indian Charitable and Religious Trusts Act, 1920, filed an application under section 7 of the said Act before the learned District Judge, Alipore, being Miscellaneous Judicial Case No. 336 of 1987, for issuing direction permitting the society, the first petitioner, to grant the lease of the property according to the terms and conditions contained in the draft lease deed. The learned District Judge upon examination of the matter and in exercise of judicial discretion under the statute approved the proposal for the lease by an order dated December 21, 1987. In the said order, the learned District Judge recorded the principal terms of the lease deed and in the light of the objects of the trust deed and the financial condition of the petitioner-society, accorded approval for the lease by exercise of his powers under section 7 of the Indian Charitable and Religious Trusts Act, 1920. Thus, the lease arrangement has judicial sanction which the statute governing the society mandatorily require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority with any power to go into the question of the title. Under the provisions the appropriate authority is required to examine whether there are reasons for the Central Government to exercise its right of pre-emptive purchase or in the other event to issue a certificate of "No objection". When the writ petition was moved on May 20, 1988, this court by an order of the said date set aside the order of the appropriate authority passed on April 20, 1988, and directed it "to pass a fresh order on the basis of the facts and circumstances of this case as appearing now and decide whether the option will be exercised under relevant provisions of the Income-tax Act, 1961, or not." Pursuant to that interim order, the appropriate authority revived the proceeding which culminated in a decision for purchase of the lease right by the Central Government for a sum of Rs. 32,52,437. The said order was passed under section 269UD(1) of the Income-tax Act, 1961. Thus, the appropriate authority in a short span of about two months completely resiled from the earlier position that the first petitioner has no valid title which it could transfer. That was the finding of the appropriate authority i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te authority by section 269UD is to make an order for purchase of the property and, if such an order is not passed, it was imperative and obligatory on the appropriate authority to issue a "No objection" certificate under section 269UL(3). The appropriate authority has no business to adjudicate on the question of the transfer of title or any infringement of law by the transfer or any other impediments to the proposed transfer. Such questions may enter into its consideration only in decision-making with regard to exercising the power of purchase. These questions would obviously preclude purchase of a property by the Central Government, the transfer having been found precarious. Mr. Bagchi contended that at the earlier stage when the petitioner moved the first petition on May 20, 1988, the circumstances of the case demanded the issue of a "No objection" certificate under section 269UL(3) because the statement of the proposed transfer in Form No. 37-I was filed before the appropriate authority on February 18, 1988, and the time available for passing an order for pre-emptive purchase expired on April 30, 1988. Therefore, on May 20, 1988, the date on which this court set aside the earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as an order of remand, because the appropriate authority refrained from passing any order either under section 269UD or 269UL(3) of the Act and merely "filed" the statement in Form No. 37-I as premature and infructuous. He pointed out to the concluding observation of the said authority in their order dated April 28, 1988, viz., "therefore, the question of acting upon it does not arise, the said statement in Form No. 37-I is filed as such." This shows that the respondent refrained from passing any order and allowed the matter to be barred by limitation. The relevant statute does not confer on the court the power to place the limitation under suspended animation. Here, the statutory provision is not content with imposing limitation but goes a step further to make such limitation rigid and irrelaxable. The question of limitation must be decided by the provisions of the Act and the courts cannot be presumed to have travelled beyond them. In this connection, reliance was placed on the decision of the Supreme Court in India Electric Works Ltd. v. James Mantosh, AIR 1971 SC 2313. In that case, the question of application of section 14 of the Limitation Act was the subject-matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this court be read as one abrogating the statutory limitation nor can such intention be attributed to the court while passing the interim order dated May 20, 1988. Far from giving the respondent such latitude the interim order of this court conditioned the exercise of the powers of the respondent in the matter of purchase in the expression, "on the basis of circumstances now appearing in this case". One such circumstance appearing in the case on that date was that the power of the appropriate authority was barred by limitation and the circumstances as then appeared permitted the appropriate authority only to issue a "No objection" certificate, the discretion to purchase having already terminated. Therefore, the said interim order cannot be construed as an order passed in relaxation of the limitation which is, for all practical purposes, inflexible. Mr. Bagchi emphasised that the Legislature has given the limitation under the chapter particular rigidity with the only exception in the event of the application being filed to an appropriate authority who has no jurisdiction in respect of the immovable property. In such eventuality, the time taken in the transfer of the statement t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of a religious denomination which is not at all a taxable entity. The action of the respondent tarnishes the image of the petitioner as the champion and preacher of the Buddhist faith in India. It maligns the petitioner by implicating it in a plot of tax evasion which is simply unthinkable. Mr. Bagchi stressed that the order impugned in the writ petition apart from being illegal, has the undesirable effect of hurting the religious sentiments of the community professing and practising Buddhism. That apart, the action taken by the respondent, the appropriate authority, is further assailed as a blatant invasion on the fundamental rights of the petitioner-society under article 25(1). The order is assailed as having infringed the right of freedom of religion. It aims at taking away from the religious denomination practising and professing Buddhism their right to profess, practise and propagate Buddhism. The entire lease arrangement was entered into by the petitioner for the purpose of propagating the teachings and tenets of Lord Buddha by establishing a centre and a venue for practice and scholarly studies in Buddhism and to support its monks, scholars and teachers. As a matter of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination and the transaction is effective only after it is sanctified by a judicial authority duly empowered by that special Act, the case cannot come under Chapter XX-C. In a case like the present one, the very question of initial or inherent jurisdiction bars the respondent from acting under the provisions of the Income-tax Act. When a transaction of a religious denomination has undergone judicial review, in a process prescribed by law and has passed the requisite test under such law, any attempt on the part of the respondent to invoke the provisions of Chapter XX-C of the Income-tax Act would be unseemly and also ultra vires inasmuch as it would amount to abridgement of the right to freedom of religion. The District Judge had approved the transaction under section 7 of the Indian Charitable and Religious Trusts Act, 1920. According to Mr. Bagchi, by following the principle of generalia specialibus non derogant, the respondents have become functus officio. The last legal objection raised by Mr. Bagchi is that the provisions of Chapter XX-C are not also otherwise operative in a transfer where the consideration is in future specie which cannot be rendered in present monetary term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occupancy. On the other hand, it estimates the cost of construction at the present value at Rs. 250 per sq. ft. But the present cost of construction has been related to the future, viz., 9.5 years hence, and the same has again been discounted at 8 per cent. per annum to arrive at its present value. This is against basic human logic. If the cost of construction of the proposed super-structure is computed at the present cost of construction, the same cannot again be related to a future date as the future cost and progressively discounted to say that the discounted value is the present cost of construction. The present cost of construction so arrived at by the discounting method comes to Rs. 120 per sq. ft. (i.e., 18,05,118 + 1,50,000). The fallacy is further compounded by the fact that the self-same authority in paragraph 6 has estimated that the lessee shall have to incur the cost of Rs. 750 per sq. ft. for delivering equal accommodation to the existing tenants and the total outlay for rehabilitating the existing tenants would involve the sum of Rs. 92.91 lakhs at the said rate of Rs. 750 per sq. ft. Thus, the appropriate authority on the one hand calculates that the rate of cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not contemplate such a course to be taken by the Central Government. That being so, this particular type of lease agreement is completely out of the scope and ambit of Chapter XX-C. The learned advocate concluded that there will be irretrievable loss to the society if the order is allowed to go to its logical consequence. The pious attempt of the society to translate the objects of the trust will simply founder. I have considered the submissions and have also gone through the affidavit-in-opposition submitted by the respondent. The gist of the arguments advanced on behalf of the petitioner are : 1. By coming to a finding in the first instance that the title to the property of the petitioner is wanting, the appropriate authority arbitrarily decided against exercising the pre-emptive right of purchase and was, therefore, bound to grant the no objection certificate under section 269UL(3). He reinforced the argument by citing the decision of the Supreme Court in Appropriate Authority v. Tanvi Trading and Credits Pvt. Ltd. [1991] 191 ITR 307 (SC). 2. The interim order of this court dated May 20, 1988, did not abrogate the limitation under section 269UD(1), proviso, and permitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very essence of the arrangement for lease in the present case. 11. The Chapter is not also applicable as the consideration in the instant lease is in specie to be delivered in future of which the money value is an imponderable factor and thus there cannot be any computation of the compensation. The computation machinery not being available, the provisions as a whole break down. 12. The order has also been passed cavalierly and against elementary logic and, thus, it is vitiated by non-application of mind and imperceptibility of reality. I find that the order passed by the appropriate authority is fit to be struck down on the first limb of the arguments advanced on behalf of the petitioner. The bar of limitation should not have been violated by the appropriate authority. It is plain that the appropriate authority did not pay heed to the requirement of following the limitation which it should have, especially when the Finance Minister in the long-term policy laid special stress on the requirement of rigid limitation so as not to keep the citizens on tenterhooks. In paragraph 5.30 of the said policy statement the following observation occurs : "To reduce undue uncertainty in pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irection could be subject to the limitations prescribed under section 132(5)." That was a case of limitation for the purpose of retention of seized articles. But, the fundamental principle with regard to limitation shall likewise apply in the present case. In this case, however, the appropriate authority cannot be said to have passed any order under section 269UD(1) or under section 269UL(3). The authority merely treated the statement in Form No. 37-I as non est and observed in express terms that they were not acting on the said statement. The matter was closed by merely filing the statement. That happened on April 28, 1988, while the expiry date of the limitation was April 29, 1988. The writ petition was moved in May, 1988, i.e., after the expiry of the limitation. The final position is that there was no order passed within the statutory period of limitation. That being "the circumstances of the case appearing on the date", it was not open to the appropriate authority to revive the statement and the proceeding for pre-emptive purchase. Such option stood barred by limitation. The principle laid down by the Supreme Court in Pooran Mall's case [1974] 96 ITR 390, cannot come to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndless manner has proceeded to thwart a laudable endeavour of the petitioner which is the organ of Buddhism in India to revive Buddhism and to disseminate the high moral teachings of Lord Buddha. Even if the acts of the appropriate authority which are clearly hostile to the petitioner are not the outcome of any parochialism, yet its effect is deleterious inasmuch as it abridges in the ultimate effect the right of those professing Buddhism to practise and propagate it. Thus, the order is ultra vires both articles 25 and 26 of the Constitution. Another fundamental issue raised on behalf of the petitioner is whether where the consideration in future specie of which the consideration is imponderable not being reducible to monetary compensation, the chapter can be invoked. Here also I am in agreement with the contentions of Mr. Bagchi. If the consideration for a transfer is not monetary consideration or not existing things or is future things not having a workable present market value, the machinery for computation of the compensation fails. If the compensation is not computable, the Chapter itself becomes inoperative. The petitioner's counsel rightly relied on CIT v. B. C. Srinivasa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. per annum for the entire period of 9.5 years. The entire method only shows a malice unbecoming of an authority consisting of experts entrusted with plenary powers. There is one discrepancy in the whole course of dealing with the case by the appropriate authority. It would strike at anybody's sensibility as to why and wherefore the authority in a matter of a month did a volte face and found the petitioner possessed of title to the property to act as its lessor contrary to its earlier finding of the same title being wanting. There has not been any change in the circumstances that were considered earlier to be the detracting factor as regards the petitioner's title to the property. There is, however, no whisper about the deficiency or imperfection or absence of title in the second order. It makes a beeline for preemptive purchase without going into the ceremony of explaining the departure from the earlier conclusion. There is no mention as to why the present order is absolutely silent. This aspect though not directly touching the question of validity of the order is an indication that the entire approach of respondent No. 3 has been light-hearted not consonant with the sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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