9911796707
TMI Blog1991 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... t petition. The respondent initially purchased, by a sale deed dated January 19, 1990, an extent of 2831 sq. ft. with superstructure thereon ( out of total extent of 8563 sq. ft. with superstructure thereon, bearing the abovesaid door No. 94, Poes Garden Street, Cathedral Road, Madras-86, comprised in R.S. No. 1567/32 part, block No. 31, Mylapore Division, Madras, and owned by his vendor, Pushparani), for a consideration of Rs. 9.5 lakhs. Subsequently, on February 15, 1990, he entered into a sale agreement for purchasing the balance extent of 5732 sq. ft. with the superstructure thereon, from the same owner for a sum of Rs. 32.50 lakhs. ( No doubt, in the sale agreement, apart from the abovesaid owner Pushparani, her children were also parties, though they were said to be having no right in the said property, but added as parties in the said sale agreement, only at the request of the purchaser by way of abundant caution. ) Since, in the above sale agreement, the sale consideration was above Rs. 10 lakhs, the respondent as required under section 269UC of the Act ( coining under Chapter XX-C) read with rule 48L of the Incometax Rules, reduced the said agreement to the form of a stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbersome." The said letter also observed as follows : " From a perusal of the physical features of part (a) stated to have been transferred, as indicated in the statement above, there is reason to believe that keeping in view the declared consideration of Rs. 32.50 lakhs for part (b) proposed to be transferred, the value of part (a) already transferred was significantly more than Rs. 10 lakhs due to which reference should have been made to the appropriate authority. The transfer stated to have been made without obtaining a certificate from the appropriate authority is to that extent in violation of section 269UL(1) of the Income-tax Act, 1961. No clearance from the municipal corporation has been produced in support of the extremely odd physical partition stated to have been made." On receipt of the said letter dated May 17, 1990, the abovesaid Pushparani replied by her letter dated June 20, 1990, inter alia, stating " there is no question of any unauthorised sub-division which arises at the stage of purchase or sale of any property or part thereof. This is also clarified in the enclosed legal opinion ... I have a marketable property with marketable title and have negotiated it f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made under section 269UC and if no order is passed within the prescribed time under section 269UD(1), it automatically follows that a certificate under section 269UL(3) must be issued ... Either the appropriate authority should be prepared to exercise the right to purchase with all the defects, shortcomings and limitations or lie should issue a certificate of no objection. I do not think that the respondent was justified in going into the manner of division of the property and whether any purchaser from the Income tax Department can utilise the property at all. I am fortified in this respect by a decision of the Calcutta High Court reported in Kelvin jute Co. Ltd. v. Appropriate Authority [1990] 185 ITR 453. No doubt this will give the real estate dealer a handle to circumvent the provisions of law. It is for the Legislature to plug the loophole. . . I am inclined to hold that the law of pre-emption is bordering on a law of acquisition of property and must be strictly construed. I cannot say that the petitioner is acting against public policy when he is clearly acting within the four corners of law." The learned judge, therefore, allowed the writ petition. Now before us, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly states that the abovesaid property already sold for Rs. 9.5 lakhs has been undervalued, but nowhere it is stated that the property that is agreed to be sold now is undervalued. We have also gone through the impugned order as well as the earlier letter dated May 17, 1990, and find that what is stated by learned counsel for the respondent is correct. Learned counsel also points out that since the appellant speaks about the valuation of the property already sold, as stated above, it shows that the appellant has applied its mind to the question of valuation and that if really, the appellant felt that even the property agreed to be sold now has been undervalued, it would have stated so in the impugned order in its abovesaid earlier letter. We think there is force in this argument. Further, on a question put forward by us, learned counsel for the appellant also represents that there is no law to reopen the sale already held for Rs. 9.50 lakhs. Learned counsel for the appellant also relied on the decision in ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815 (SC) to contend that, when there is a power either to purchase the property agreed to be sold or to issue a no objection certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed the special leave petition with the following observations ( at page 308 ) : " We agree that two alternatives are open under the scheme of the legislation : (1) the Union of India through the appropriate authority could buy the property, or (ii) in the event of its decision not to buy, it has to issue a "no objection certificate" leaving it open to the parties to deal with the property. In that view of the matter, the High Court was right in its conclusion. " (emphasis supplied ) In this connection, no doubt, learned counsel for the appellant brought to our notice the decision in Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888 (SC) to contend that the dismissal of the special leave petition does not mean affirmation of the High Court's decision. The relevant observation in the above-referred to decision in Nawab Sir Mir Osman Ali Khan [1986] 162 ITR 888 (SC) is as follows (at page 898 ) : " It is, however, well-settled that dismissal of a special leave petition in limine does not clothe the decision under appeal in the special leave petition with the authority of the decision of this court. See, in this connection, the observations in Daryao v. State of U. P., AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Supreme Court has not affirmed the decision of the High Court. In the present case, as already noted, the Supreme Court in the above-referred to decision in Tanvi Trading and Credits P. Ltd. [1991] 191 ITR 307 specifically held that " the High Court was right in its conclusion ". Therefore, there can be no doubt that the above-referred to decision in Tanvi Trading and Credits P. Ltd. [1991] 188 ITR 623 (Delhi) has been affirmed by the Supreme Court in the abovesaid decision reported in Tanvi Trading and Credits P. Ltd. [1991] 191 ITR 307. We also find that in Mrs. Satwant Narang v. Appropriate Authority [1991] 188 ITR 656 (Delhi) referred to above also, it was held that the jurisdiction of the appropriate authority was only limited to either pass an order, within the specified period, for purchase of the property by the Central Government for the consideration recorded in the agreement or to issue a no objection certificate for transfer at that consideration, and that while considering the statement in Form No. 37-1, the appropriate authority had only to examine the adequacy of the consideration to decide whether to order purchase or to grant a no objection certificate and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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