Delhi High Court

Mahesh Kumar Modi vs Appropriate Authority & Anr. on 13 May, 2002

Equivalent citations: (2002) 175 CTR Del 422

Author: D Bhandari

JUDGMENT

Dalveer Bhandari, J.

This petition is directed against the order dated 17-9-1991, passed by the Appropriate Authority the Deputy Commissioner.

2. The petitioner entered into an agreement, dated 3-7-1991, with respondent No. 3 for the purchase of agricultural land measuring 2,716 sq. yards falling in Khasra No. 641/1, 642/2 situated in the revenue state of Village Neb Sarari, New Delhi. The total sale consideration of the land was fixed at Rs. 35 lakhs. The petitioner in pursuance to the agreement performed his part of the contract and paid the entire consideration to respondent No. 3 as per the terms of the agreement and respondent No. 3 handed over the vacant and physical possession of the plot to the petitioner.

3. Since the sale consideration was more than Rs. 10 lakhs at the relevant time, the provisions of Chapter XX-C of the Income Tax Act were attracted and the parties before getting the sale deed registered were required to submit an application under Chapter XX-C in Form 37-I of the Income Tax Act within 15 days of the execution of the said agreement. Admittedly the Form 37-I was filed on 10-4-1991, after the physical possession was handed over to the petitioner. According to the provisions of section 269UC of the Act the Form under section 37-I had to be filed within three months before the intended date of transfer. Section 269UC of the Act reads as under :

(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 any other law for the time being in force, no transfer of any immovable property of such value exceeding five lakh rupees as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property and the person to whom it is proposed to be transferred in accordance with the provisions of sub-section (2) at least three months before the intended date of transfer.

(2) The agreement referred to in sub-section (1) shall be reduced to writing in the form a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties

(3) Every statement referred to in sub-section (2) shall :

(i) be in the prescribed form;

(ii) Set forth such particulars as may be prescribed; and

(iii) be verified in the prescribed manner,

and shall be furnished to the appropriate 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 or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties.

4. The learned Deputy Commissioner (Appropriate Authority) in the impugned order, dated 17-9-1991, mentioned that the appropriate authority is of the opinion that the statement of transfer as filed by the parties is not in accordance with the provisions of Chapter XX-C of the Income Tax Act, 1961, because there is no intended transfer of immovable property. In the instant case, the transfer had taken place before an application under Chapter XX-C in Form 37-I was filed. He further, mentioned that, the transferor has defeated the scheme of the Act of enabling the Appropriate Authority to exercise the option of pre-emptive purchase or issuing of No objection certificate at a stage contemplated by law.

5. The appropriate authority also mentioned that the petitioner has committed an offence of transfer and, therefore, he is not entitled to the benefit of No objection certificate. He further observed that "in the circumstances we think that the statement in Form 37-I which has defeated the very provisions of law under which it is purported to have been submitted void, vis-a-vis section 269UC of the Act. The question of acting on such a void statement does not arises "

6. A Division Bench of this court had an occasion to examine the provisions of section 269UC in Tanvi Trading & Credits (P) Ltd. & Ors. v. Appropriate Authority & Ors. (1991) 188 ITR 623 (Del). The court observed that the appropriate authority can only decide whether the respondent government should purchase the property and under the Act no power has been given to the respondent-appropriate authority to decide whether the transfer is illegal or not. The appropriate authority has only twin options in a case of this nature either to purchase the property or give No objection certificate to the petitioner.

7. The department against the said judgment preferred an appeal before the Apex Court. The Apex Court in Appropriate Authority v. Tanvi Trading & Credits (P) Ltd. (1991) 191 ITR 307 (SC), approved the aforementioned judgment of the Delhi High Court and observed as under :

"We agree that two alternatives are open under the scheme of the legislation :

(i) 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."

8. This judgment has been followed in a number of subsequent judgments A Division Bench of this court delivered in CM. No. 4452/96 titled G.J. Malik v. Appropriate Authority, Income Tax Department, New Delhi followed the earlier judgment of Tanvi Trading (supra) and quashed the order of the appropriate authority. Another Division Bench of this court in the case of Smt. Jaspal Kaur & Ors. v. Union of India & Ors. (1999) 240 ITR 493 (Del) also followed the said judgment of Tanvi Trading (supra).

9. In DLF Universal Ltd. v. Appropriate Authority & Anr. (2000) 243 ITR 730 (SC). In this judgment their Lordships of the Supreme Court have taken note of Tanvi Trading (supra) and approved the same. The court observed that the object of the Act must be kept in view by the appropriate authority when it examined a statement in Form 37-I.

10. In view of the settled position of law, the impugned order, dated 17-9-1991 (Annexure P-1), passed by respondent No. 2 has to be set aside. Learned counsel for the petitioner does not fairly press the other prayers of the writ petition regarding quashing of the complaint and staying of the proceedings since he has already filed another petition under section 482 of the Cr. PC i.e., Cir, M(M) No. 1753/95 for the said purpose and that petition is pending in this court.

11. The writ petition is accordingly disposed of in terms of our findings indicated in the preceding paragraphs. The parties are directed to bear their own costs.

OPEN