1996 (4) TMI 70 - HC - Income Tax

Appropriate Authority Immovable Property By Central Government Movable Property Transfer Of Property

Summary

Issues Involved:
1. Validity of the order dated October 28, 1994, by the appropriate authority treating the statement filed in Form No. 37-I as non est in law.
2. Petitioners' entitlement to a no objection certificate under section 269UL(3) of the Income-tax Act, 1961.
3. Petitioners' competence to transfer the property in question.
4. The impact of pending litigations and previous court orders on the petitioners' right to transfer the property.

Issue-Wise Detailed Analysis:

1. Validity of the Order Dated October 28, 1994:
The petitioners challenged the order by the appropriate authority, which treated the statement filed in Form No. 37-I as non est in law. The appropriate authority refused to exercise its powers under Chapter XX-C of the Income-tax Act, either to purchase the property or to issue a no objection certificate. The petitioners contended that the reasons for declaring the statement void were irrelevant and extraneous since the appropriate authority under Chapter XX-C of the Income-tax Act cannot delve into questions pertaining to the Urban Land (Ceiling and Regulation) Act, 1976.

2. Entitlement to a No Objection Certificate:
The petitioners argued that the appropriate authority failed to exercise its option to purchase the property within three months from the end of the month in which the statement under Form No. 37-I was received. Therefore, it was bound to issue a certificate under section 269UL of the Income-tax Act, stating that it had no objection to the transfer of the property for the amount stated in the agreement. The petitioners cited judicial pronouncements to support their claim.

3. Competence to Transfer the Property:
The court examined whether the petitioners were competent to transfer the property. It was found that the petitioners did not have the title to the land, as the competent authority under the Ceiling Act had declared the land in excess of the ceiling limit. Moreover, the court had previously restrained the petitioners from transferring the property in its order dated July 26, 1990. The petitioners were also found guilty of suppressing material facts and making false statements about their ownership of the land.

4. Impact of Pending Litigations and Previous Court Orders:
The court noted that various litigations were pending concerning the land in question. The competent authority had declared the entire land, except 1,000 square meters, as excess vacant land. The petitioners had not disclosed whether they challenged these orders. The court also referred to previous orders, including the one dated July 26, 1990, which restrained the petitioners from transferring any interest in the property. The court found that the petitioners had falsely claimed ownership of the land and failed to disclose material facts about the pending litigations and previous court orders.

Conclusion:
The court held that the appropriate authority did not err in refusing to act upon the agreement-statement filed by the petitioner-company, as it was void and non-est in law. The petitioners were not competent to transfer the property due to lack of ownership, judicial restraints, and the declaration of the land as excess under the Ceiling Act. Consequently, the court dismissed the writ petition with costs assessed at Rs. 5,500.