2000 (11) TMI 54 - HC - Income Tax

Purchase Of Immovable Property By Central Government, Interpretation Of Taxing Statutes, Literal Interpretation

Issues Involved:
1. Validity of the transfer of property without obtaining the requisite no objection certificate (NOC).
2. Maintainability of the statement filed in Form No. 37-I.
3. Interpretation of sections 269UC, 269UD, and 269UK of the Income-tax Act, 1961.
4. The options available to the appropriate authority under the Income-tax Act.
5. Legality of the proceedings initiated under section 276AB of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Validity of the Transfer of Property Without NOC:
The primary issue in this case is whether the transfer of the subject property without obtaining the requisite NOC from the appropriate authority is valid. The authority held the transfer void under section 269UC(4) of the Income-tax Act. The court noted that any transfer made in contravention of section 269UC(1) is void as per section 269UK(2). The court emphasized that the authority's reliance on sub-section (2) of section 269UK was the foundation for declaring the transfer void.

2. Maintainability of the Statement Filed in Form No. 37-I:
The authority rejected the statement filed in Form No. 37-I on the grounds that it was related to a void transaction. The court observed that the statement was initially filed on October 20, 1989, and was rejected because the plots were considered contiguous and covered by the Urban Land (Ceiling and Regulation) Act, 1976. The petitioner requested reconsideration after the repeal of the Land Ceiling Act, but the authority maintained its stance. The court found that the authority's decision to reject the statement as not maintainable was indefensible.

3. Interpretation of Sections 269UC, 269UD, and 269UK of the Income-tax Act:
The court analyzed the provisions of sections 269UC, 269UD, and 269UK. Section 269UC prohibits the transfer of immovable property exceeding a certain value without an agreement and furnishing a statement in the prescribed form. Section 269UD empowers the appropriate authority to purchase the property or issue an NOC. Section 269UK(2) states that any transfer in contravention of section 269UC(1) is void. The court concluded that the authority's interpretation of these provisions was incorrect and that the appropriate authority only had two options: to purchase the property or issue an NOC.

4. Options Available to the Appropriate Authority:
The petitioner argued that the authority had only two options under the Act: to issue an NOC or to make a pre-emptive purchase. The court referred to the Supreme Court's decisions in Tanvi Trading and Credits P. Ltd. and D.L.F. Universal Ltd., which confirmed these two options. The court rejected the authority's argument that a third option existed, as suggested by the Rajasthan High Court in Rajasthan Patrika Ltd. v. Union of India. The court emphasized that the words of the statute were clear and unambiguous, and no third option could be read into the provisions.

5. Legality of the Proceedings Under Section 276AB:
The petitioner sought to nullify the proceedings initiated under section 276AB for prosecution. The court did not express an opinion on the legality of these proceedings, stating that no case had been made out for interfering with them at this stage. The court's primary focus was on the validity of the authority's order and the issuance of the NOC.

Conclusion:
The court quashed the authority's order dated July 29, 1999, and directed the respondents to issue the NOC within one month. The writ petition was allowed to the extent indicated, without addressing the legality of the proceedings under section 276AB.

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