2002 (5) TMI 45 - HC - Income Tax

Summary

Issues:
1. Application under Chapter XX-C of the Income-tax Act filed after physical possession was handed over.
2. Interpretation of section 269UC of the Income-tax Act.
3. Authority's power to decide on property transfer legality.
4. Pre-emptive purchase or issuance of no objection certificate by appropriate authority.
5. Previous judgments on appropriate authority's options.

Analysis:
1. The petitioner entered into an agreement for the purchase of agricultural land exceeding Rs. 10 lakhs. The application under Chapter XX-C was filed after the physical possession was transferred, contrary to the requirement of filing within three months before the intended date of transfer.

2. Section 269UC of the Income-tax Act mandates the filing of Form No. 37-I at least three months before the intended date of transfer for properties exceeding a specified value. The appropriate authority found the statement of transfer not in compliance with Chapter XX-C, leading to the petitioner being denied the benefit of a no objection certificate.

3. The appropriate authority opined that the transferor's actions defeated the purpose of the Act by transferring the property before filing the required application. The authority's role is limited to deciding on pre-emptive purchase or issuing a no objection certificate, not determining the legality of the transfer.

4. The High Court emphasized that the appropriate authority has the options to either purchase the property or issue a no objection certificate. Previous judgments, including Tanvi Trading and Credits Pvt. Ltd., affirmed the authority's limited scope of action under the legislation.

5. Several judgments, such as G.J. Malik v. Appropriate Authority and Smt. Jaspal Kaur v. Union of India, have followed the precedent set by Tanvi Trading and Credits Pvt. Ltd. The Supreme Court in DLF Universal Ltd. v. Appropriate Authority upheld the principles established in Tanvi Trading's case, emphasizing the importance of considering the Act's objectives when evaluating Form No. 37-I statements.

In conclusion, the High Court set aside the impugned order, citing the settled legal position and directing the parties to bear their own costs. The petitioner's other prayers were not pressed, as another petition was filed for those purposes.