2002 (2) TMI 17 - HC - Income Tax

In the writ petition the petitioner has questioned the constitutional validity of the provisions of Chapter XX-C of the Act and sought for quashing of the impugned order issued by the authorities The petitioner is an agreement holder and he negotiated to purchase a property with the fourth respondent who was the owner of site No. 48 situated at 1st A Cross R.M.V. Extension Bangalore which measured 45 x60 for a consideration of Rs. 16, 20, 000. Under the provisions of Chapter XX-C of the Income-tax Act Form No. 37-I was filed on April 9, 1991 by the parties before the appropriate authority and the appropriate authority on considering the application and finding that the value of the property was below the market value by 15 per cent. proceeded to pass an order of pre-emptive purchase which is now challenged by the petitioner. - I do not find any merit in this writ petition and it is accordingly dismissed.

Summary

Issues:
Constitutional validity of provisions of Chapter XX-C of the Income-tax Act challenged.
Opportunity given to petitioner before passing the impugned order.
Consideration of completed transactions post order for compulsory purchase.
Validity of auction sale of property in question.

Constitutional Validity of Provisions:
The petitioner challenged the constitutional validity of Chapter XX-C of the Income-tax Act, which was upheld by the Supreme Court in a previous case. The petitioner did not dispute this fact but sought consideration of other merits in the writ petition.

Opportunity Given to Petitioner:
The petitioner contended that no opportunity was provided before the impugned order was passed by the respondent-authorities. The main point of consideration was whether the writ petition should be allowed, and the matter remitted back to the competent authority for reconsideration after giving an opportunity to the petitioner.

Completed Transactions Post Order for Compulsory Purchase:
The Supreme Court clarified that completed transactions, where possession was taken, compensation paid, and accepted without protest, should not be invalidated. The court emphasized that public auctions resulting in completed transactions should not be disturbed, even if proper opportunity was not given to the petitioner before issuing orders under section 269UD.

Validity of Auction Sale:
The court noted that the property in question was sold in a public auction, and the fifth respondent purchased it. As per the directions of the Supreme Court and other judgments cited, completed transactions should not be upset, especially when compensation was paid and accepted without protest. The court dismissed the writ petition, stating that no further opportunity needed to be given to the petitioner as the completed transaction should not be invalidated.

This detailed analysis of the judgment covers the constitutional validity of provisions, the opportunity given to the petitioner, the consideration of completed transactions post compulsory purchase order, and the validity of the auction sale of the property in question.