TMI Blog2007 (10) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... . V. Jhaveri for the petitioners. R. Asokan for the respondents. JUDGMENT The judgment of the court was delivered by J. P. Devadhar J.- This petition is filed to challenge the order dated February 15, 1993, passed by the appropriate authority under section 269UD(1) of the Income-tax Act, 1961 ("the Act" for short), as well as the constitutional validity of rule 48L of the Income-tax Rules, 1962 ("the 1962 Rules" for short). 2. The challenge to the impugned order dated February 15, 1993, is two-fold. Firstly, the transaction relating to transfer of Flat No. 21 in Belle View Co-operative Housing Society situated at 85, Bhulabhai Desai Road, Bombay-16 ("the flat in question" for short), in favour of the petitioners as per agreement dated August 30, 1986, is governed by Chapter XX-A of the Act and not Chapter XX-C and, therefore, the impugned order passed under Chapter XX-C is without jurisdiction. Secondly, even on the merits the impugned order passed under section 269UD(1) of the Act suffers from serious infirmities and hence the said order is liable to be quashed and set aside. According to the Revenue, actual transfer of the flat in question took place after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners as a matter of abundant caution, submitted a statement in Form No. 37-I as contemplated under section 269UC contained in Chapter XX-C of the Act, specifically stating therein that Form No. 37-I is filed under protest and without prejudice to the petitioner's contention that the provisions of Chapter XX-C or the rules framed thereunder are not applicable in the present case because the transfer of the flat in question was completed prior to September 30, 1986, i.e., prior to Chapter XX-C came into force. 8. On November 9, 1986, the appropriate authority ("AA" for short) constituted under Chapter XX-C of the Act called upon the petitioners to furnish certain particulars relating to the flat in question. The petitioners furnished the requisite information. Thereafter, without giving an opportunity of hearing to the petitioners, the appropriate authority passed an order on December 12, 1986, under section 269UD(1) of the Act for purchase of the flat in question. Challenging the said order, the petitioners filed Writ Petition No. 30 of 1987 in this court which was admitted on February 13, 1987, and by way of interim relief, implementation of the purchase order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he flat in question could not be purchased under Chapter XX-C. By the said letter, the petitioners sought particulars of the sale instances set out in the show-cause notice. As the particulars were not furnished, several letters were addressed by the petitioners in that behalf. In one of the letters, the petitioners referred to sale of a flat on the 7 th floor of the Belle View Co-operative Housing Society on July 7, 1986, in which the flat in question is situated. It was submitted that the sale of the said flat which is comparable with the flat in question, has been approved by the appropriate authority under Chapter XX-C of the Act and, therefore, it is not proper to initiate proceedings for purchase of the flat in question. 14. Rejecting the contention of the petitioners, the appropriate authority by the impugned order dated February 15, 1993, decided to purchase the flat in question under section 269UD(1) of the Act. Challenging the said order, as also the constitutional validity of rule 48L of the 1962 Rules, the present petition is filed. 15. Before dealing with the rival contentions, we may quote the relevant provisions in Chapter XX-A of the Act. "Chapter XX-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r other association of persons or by way of any agreement or any arrangement of whatever nature) whereby a person acquires any rights in or with respect to any building or part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed (not being a transaction by way of sale, exchange or lease of such building or part of a building which is required to be registered under the Registration Act, 1908 (16 of 1908), shall be reduced to writing in the form of a statement by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties. (2) Every statement in respect of a transaction referred to in sub-section (1) shall- (a) be in the prescribed form ; (b) set forth such particulars as may be prescribed ; and (c) be verified in the prescribed manner, and registered with the competent authority, in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery provision for implementing the provisions of Chapter XX-C cannot provide that Chapter XX-C would apply to transfers made before October 1, 1986. We do not find any merit in this contention because, in our opinion, rule 48L(2)(a) applies to those agreement for transfer which are entered into before October 1, 1986, to which Chapter XX-A is not applicable. 20. It is pertinent to note that as per section 269A(h)(ii) of the Act, the term "transfer" in Chapter XX-A includes transactions such as, (a) becoming a member or acquiring shares in a co-operative society, company or other association of persons, or (b) entering into any agreement or any arrangement which has the effect of transferring or enabling the enjoyment in respect of a building or part of a building. In other words, Chapter XX-A, inter alia, applies to transactions, where a person, pursuant to an agreement for transfer of shares acquires any right in respect of a flat in a co-operative society. Obviously, the transactions entered into by and between the parties up to September 30, 1986, which do not have the effect of transferring or enabling the enjoyment of the immovable property, would not be covered under Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the balance consideration after October 1, 1986, the society has transferred the flat in favour of the petitioners after October 1, 1986, and, therefore, transfer of the flat in question took place after October 1, 1986, and hence Chapter XX-C is applicable in the present case. In support of the above contention, Mr. Asokan placed reliance on a decision of the Gujarat High Court in the case of Shantivan Corporation v. Sub-Registrar [1991] 189 ITR 583 and a decision of the Madras High Court in the case of K. K. Anandam Ammal v. Union of India [1995] 212 ITR 9. 24. On a careful consideration of the rival submissions, we find it difficult to accept the argument of the Revenue, because as stated earlier, Chapter XX-A applies not only to the transactions relating to transfer of immovable properties but also to transactions, where a person acquires any right in or with respect to any building or part of a building by becoming a member or acquiring shares in a co-operative society, company or other association of persons, or by entering into any agreement or arrangement in that behalf. In other words, Chapter XX-A applies not only to the transactions where a person has bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to Surat region with effect from June 1, 1989. The petitioner therein had entered into an agreement for purchase of the property situated in the Surat region prior to June 1, 1989. It was contended by the petitioner therein that he was put in pos-session of the property in question prior to June 1, 1989, which was found to be false. In that view of the matter, the writ petition was dismissed. Therefore, the aforesaid decision is distinguishable on facts. 27. The argument of the Revenue based on the decision of the Gujarat High Court in the case of Shantivan Corporation v. Sub -Registrar [1991] 189 ITR 583 that the petitioners were put in possession of the flat in question after October 1, 1986, and, therefore, Chapter XX-C would be applicable to the case of the petitioners cannot be accepted, because, section 269A(h) read with section 269AB of the Act expressly provide that, where a person acquires any right in respect of a flat in a co-operative society on account of his entering in to an agreement or arrangement in that behalf, then such transaction would be covered under Chapter XX-A. Therefore, in the facts of the present case, irrespective of the fact that the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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