N.D.M.C. vs Anil Kumar Khanna
2013 Latest Caselaw 615 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Judgment reserved on : 31.01.2013
                                  Judgment pronounced on : 08.02.2013


+      LPA No. 1097/2007 & CM No. 9918/2007

       N.D.M.C.                                               ..... Appellant
                             Through: Mr. Asutosh Lohia, Addl. Standing
                             Counsel for NDMC.


                    versus

       ANIL KUMAR KHANNA                                    .... Respondent
                             Through:    Nemo.
       CORAM:
        HON'BLE THE CHIEF JUSTICE
        HON'BLE MR. JUSTICE V.K. JAIN


V.K. JAIN, J.

1. The respondent before us is assessed to property tax in the record

of the appellant in respect of property No. 9, Jor Bagh, New Delhi. With

effect from 01.06.1995, the respondent permitted M/s Bharti Cellular Ltd.

to install a cellular antenna on the terrace of the aforesaid property at the

rent of Rs 36,000/- per month. A notice, purporting to be under Section

77 of NDMC Act was issued by the appellant to the respondent on

15.12.1998, asking him to provide the following information:-

"10. Occupancy and rent (Portion-wise) with documents proof.

11. Similar information as given in Sr. No. 3 to 7 above in respect of addition alterations proposed/carried out in the premises from time to time."

Vide reply dated 21.12.1998, the respondent stated that property

No. 9, Jor Bagh, New Delhi, was self-occupied property and there had

been no addition or alternation in the said property. A notice under

Section 77 of NDMC Act was also sent to the respondent on 21.07.1999

which was replied by the respondent on 18.08.1999. It was stated in the

reply that the status of the property had not been changed, it was a self-

acquired property, was used for residential purpose only and no additions

or alterations had been made therein. A letter was then sent by the

appellant to the respondent on 02.08.2000, requesting him to state the

monthly rent being charged by him for the cellular installed on the roof of

the said property. The respondent sent a reply dated 20.09.2000,

disclosing the rent he was receiving from M/s Bharti Cellular Ltd. as

licence fee, alongwith a certificate issued by the said company. A notice

under Section 72 of NDMC Act was also issued by the appellant to the

respondent on 31.10.2000, proposing enhancement of rateable value of

Rs 4,32,000/- for the assessment year 2000-01, seeking to amend the

assessment list for the year 2000-01, on account of receipt of rent in

respect of the aforesaid cellular antenna.

2. Vide order dated 05.08.2004, the annual value of the aforesaid

property was increased with effect from 01.06.1995, taking into

consideration the rent received by the respondent from M/s Bharti

Cellular Limited for the cellular antenna fixed on the roof of the aforesaid

property. It was further revised with effect from 01.09.2002 on account

of enhancement in the rent/licence fee received by the respondent from

another operator in respect of the cellular antenna installed by the said

company. Probably, another notice was issued under Section 72 of

NDMC Act, proposing rateable value of Rs 29,50,568/- less 10% with

effect from 01.04.2003. The respondent filed an appeal, challenging the

assessment order dated 05.08.2004 and the consequent bill dated

25.08.2004, issued by the appellant, inter alia, on the ground that notice

under Section 72 of NDMC Act given to him by the appellant proposed

enhancement of rateable value only with effect from 01.04.2003. The

learned Additional District Judge vide order dated 07.12.2004 set aside

the assessment order dated 05.08.2004. He, however, confirmed the

enhancement of rateable value with effect from 01.04.2003. Being

aggrieved, the appellant filed a writ petition which came to be dismissed

vide order dated 18.04.2007. The aforesaid order of the learned Single

Judge is under challenge by way of this appeal.

3. Section 72 of NDMC Act, to the extent it is relevant, provides that

the Chairperson may, at any time, amend the assessment list by

increasing or reducing, for adequate reasons, the amount of any rateable

value and of the assessment thereupon, provided that no person shall by

reason of any such amendment become liable to pay any tax or increase

of tax in respect of any period prior to the commencement of the year in

which the notice under sub-section is given. Sub-section (2) of the

aforesaid Section provides for giving of notice to the person affected by

the assessment, whereby he is informed of the proposed amendment and

is given an opportunity to file objections, if any, against the proposed

amendment.

It would thus be seen that the rateable value can be increased only

with effect from the commencement of the year in which the requisite

notice under Section 77(1) of NDMC Act is given to the person affected

by the amendment of the assessment list. The provisions being

mandatory, neither the list can be amended nor the demand of property

tax can be enhanced in respect of a period prior to the year in which such

a notice is given. This is not the case of the appellant that it had served

notice under Section 72(2) of the Act upon the respondent before the

rateable value for the period in question was revised by it.

4. The contention of the appellant to justify the enhancement of

rateable value is that in reply to notice under Section 77 of the Act, the

respondent did not disclose that it had installed an antenna on the roof of

the house and was receiving rent/licence fee from the cellular operator for

permitting installation of the antenna.

Section 77 of NDMC Act reads as under:-

"77. Power of Chairperson to call for information and returns and to enter and inspect premises. (1) To enable him to determine the rateable value of any land or building and the person primarily liable for the payment of property tax leviable in respect thereof, the Chairperson may require the owner or occupier of such land or building, or of any person thereof to furnish him within such reasonable period as the Chairperson fixes in this behalf, with information or with a written return signed by such owner or occupier--

(a) as to the name and place of residence of the owner or occupier, or of both the owner and occupier of such land or building;

(b) as to the measurements of dimensions of such land or building or of any portion thereof and the rent, if any, obtained for such land or building or any portion thereof, and

(c) as to the actual cost or other specified details connected with the determination of the value of such land or building.

(2) Every owner or occupier on whom any such requisition is made shall be bound to comply with the same and to give true information or to make a true return to the best of his knowledge or belief.

(3) Whoever omits to comply with any such requisition or fails to give true information or to make a true return to the best of his knowledge or belief, shall, in addition to any penalty to which he may be liable, be precluded from objecting to any assessment made by the Chairperson in respect of such land or building of which he is the owner or occupier."

It would thus be seen that the appellant can call for information as

regards the rent being received from the property subject matter of levy of

property tax by it and the owner or the occupier, as the case may be, is

required to furnish true and correct information to the appellant in this

regard. The failure of the owner or occupier to furnish information or in

case he furnishes information which is not correct, renders him liable to

penalty as prescribed in the Act. The penalty envisaged in sub-section (3)

of the Act is provided in Section 369 of the Act and is fine amounting to

Rs 50/-. In addition thereto, he is also precluded from objecting to the

assessment made by the appellant in respect of the land or building for

which information is sought.

5. The next question which comes up for consideration is as to

whether any false information was furnished by the respondent in reply to

the notice received from the appellant under Section 77(1) of the Act and

if so, what are the consequences of his furnishing a false information.

A perusal of the reply sent by the respondent on 21.12.1998 would show

that no specific information with respect to the rent being realized by him

was provided by the respondent. The case of the respondent appears to

be that he had not let out any part of property in question to the cellular

operator and he had, by way of a licence, permitted installation of cellular

antenna, for which licence fee and not rent was being paid to him.

However, we need not go into the question as to whether the amount

which the respondent was receiving from the cellular operator can be said

to be rent or not because, in our opinion, assuming that rent was being

received by the respondent and information in this regard was not

disclosed in reply to the notice under Section 77 of the Act, the appellant

had no authority in law to revise the rateable value, without giving notice

under Section 72 of the Act, merely on account of the information

furnished in reply to the notice under Section 77 of the Act being

incorrect or being withheld. In our view, the only consequence which

flows from non-compliance of the notice issued under Section 77 of the

Act or furnishing of false information in response to the said notice is that

the person responsible for payment of property tax cannot object to the

assessment made by the appellant for the year in which notice under

Section 77 of the Act is issued by it. The purpose of issuing notice under

Section 77 of the Act is to elicit such information, as would help the

appellant in making assessment of property tax, in respect of the property

subject matter of the notice and in case no information required by the

appellant is furnished or a wrong information is furnished, the appellant

can make such assessment as it may deem appropriate on the basis of

information available to it. The assessee would in such a case be

precluded from objecting to such an assessment for the year in which the

information is sought. But, this Section, does not, in our view, permit

retrospective revision of rateable value, without issuing notice under

Section 72 of the Act.

6. It was contended by the learned counsel for the appellant that in

reply to the notice dated 21.12.1998 under Section 77 of the Act, the

respondent claimed that the property was self-occupied property,

whereas, in fact, the terrace of the property had been let out to M/s Bharti

Cellular Limited for installation of a cellular antenna. We, however, find

no merit in the contention. There is no material on record to show that

any lease with respect to the terrace of property in question was executed

between respondent and M/s Bharti Cellular Limited. Mere permission to

install cellular antenna on the roof of a house, in our opinion, would

ordinarily be a licence to use a particular portion of the house for

installation of such an antenna and would not amount to creating a lease

in favour of the cellular company. The vital distinction between a lease

and a licence is that in case of a licence, the legal possession of the

property subject matter of the licence continues to vest in the licensor,

whereas in case of lease, the legal possession of the premises is

transferred to the lessee. Ordinarily, legal possession of the roof

continues to remain with the owner of the building in case permission is

granted to a cellular company to install a cellular antenna on the roof of

the building. Therefore, it would not be correct to say that the respondent

made a false statement when he claimed in the reply dated 21.12.1998

that property No. 9, Jor Bagh, New Delhi was self-occupied property and

there was no addition/alteration in the said property. The same is the

position with respect to the reply dated 18.08.1999, where the respondent

reiterated that the said property was self-acquired property and no

additions or alterations had been made therein. Therefore, it appears to us

that no false statement was made by the respondent in claiming that the

property in question was his self-acquired property. In any case, as noted

earlier by us, even if a wrong information is furnished or material

information is withheld in reply to a notice under Section 77 of the Act,

the only consequence would be that besides being liable to pay prescribed

penalty, the person primarily responsible for payment of property tax is

precluded from objecting to the assessment made by NDMC for the year

in which the notice was issued. But, no revision of the rateable value of

the property is permissible in the absence of notice under Section 72 of

the Act.

For the reasons stated hereinabove, we find no merit in the appeal

and the same is hereby dismissed.

                                                    V.K.JAIN, J


FEBRUARY 08, 2013/bg                                CHIEF JUSTICE