9911796707
|
Home
Issues Involved:
1. Whether the order, annexure "D", is liable to be quashed? 2. If the order, annexure "D", is liable to be quashed, whether the matter is required to be remitted to the second respondent for fresh consideration or the second respondent should be directed to issue a certificate of "no objection", as contemplated under sub-section (3) of section 269UL of the Act? Issue-wise Detailed Analysis: Issue 1: Whether the order, annexure "D", is liable to be quashed? The petitioners sought to quash the order dated July 19, 1989, and for the second respondent to issue a no objection certificate under section 269UL(3) of the Income-tax Act, 1961. The first petitioner, the owner of a piece of land, entered into an agreement to sell the land to the second petitioner. They filed a statement under section 269UC(3) in Form No. 37-I, seeking a no objection certificate. The second respondent rejected the statement as defective. The court examined whether the order was passed on extraneous and irrelevant considerations. The object of Chapter XX-C of the Act is to curb the transfer of black money in property transactions. The court found that the reasons given by the second respondent were irrelevant and extraneous to the power conferred under Chapter XX-C. The appropriate authority's role is limited to deciding whether the apparent sale consideration is undervalued by 15% or more compared to the fair market value. The court referred to the Supreme Court decision in C. B. Gautam v. Union of India, which stated that Chapter XX-C provisions could be used only where there is significant undervaluation of property. The appropriate authority's only options are to purchase the property or issue a no objection certificate. The reasons given in the impugned order, such as the absence of a sanctioned plan and clearance from the urban land ceiling authority, were found to be irrelevant. The court concluded that the reasons assigned by the second respondent were erroneous in law and unsustainable. The appropriate authority cannot reject the statement based on the legality or advisability of the agreement's stipulations. The Delhi High Court's decision in Tanvi Trading and Credits P. Ltd. v. Appropriate Authority supported this view, stating that the appropriate authority's role is to decide whether to purchase the property or issue a no objection certificate. Issue 2: If the order, annexure "D", is liable to be quashed, whether the matter is required to be remitted to the second respondent for fresh consideration or the second respondent should be directed to issue a certificate of "no objection", as contemplated under sub-section (3) of section 269UL of the Act? The court considered whether to remit the matter for fresh consideration or direct the second respondent to issue a no objection certificate. The court noted that sub-section (1) of section 269UD of the Act confers power on the appropriate authority to make an order for the purchase of the immovable property. The proviso to sub-section (1) of section 269UD prohibits the appropriate authority from making any order after the expiration of the specified period. The court found that if the appropriate authority fails to pass an order within the specified period, the only option left is to issue a no objection certificate. Remitting the matter for fresh consideration would cause serious financial loss to the parties due to the potential increase in the property's market value. The appropriate authority must function within the power conferred by the statute and cannot be permitted to reconsider the matter after the specified period. The court referred to the Delhi High Court's decision in Tanvi Trading and Credits P. Ltd., which held that if no order for purchase is passed, the appropriate authority must issue a no objection certificate. The Supreme Court's observations in the same case confirmed that if the appropriate authority decides not to buy the property, it must issue a no objection certificate. Conclusion: 1. The order dated July 19, 1989, annexure "D", is quashed. 2. The second respondent is directed to issue a certificate of "no objection" under section 269UL(3) of the Act within two months from the date of receipt of the court's order. 3. No order as to costs. The rule issued is made absolute, and the petition is disposed of accordingly.
|
