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Challenge to order under section 269UD(1) of Income-tax Act, 1961 based on undervaluation of property for pre-emptive purchase. Analysis: The petitioner filed a petition seeking to quash an order passed by the appropriate authority under section 269UD(1) of the Income-tax Act, 1961. The petitioner, a sitting tenant, had entered into an agreement to buy a property from the owner. The authority issued a show-cause notice alleging undervaluation of the property. The petitioner and the owner replied, contending that the property's value was not understated. The authority, after considering the replies, ordered the purchase of the property under Chapter XXC of the Act, citing undervaluation as the reason. The petitioner challenged the order, arguing that the authority erred in considering certain properties as comparable to the subject property. The petitioner contended that the property under consideration could not be compared to the properties mentioned. The petitioner highlighted discrepancies in the valuation of the properties, emphasizing that the authority's decision lacked proper evaluation and application of mind. The respondent, in their affidavit-in-reply, defended the authority's decision, claiming that the subject property and the mentioned properties were comparable. The respondent provided calculations to support their valuation of the subject property. However, the petitioner presented evidence, including a certificate from the local authority, proving that one of the mentioned properties was in a commercial zone, not a residential zone as claimed by the respondent. The court found that the authority's decision was flawed as it did not objectively assess the valuation of the properties. The court referred to a previous decision emphasizing the importance of a positive and definite conclusion based on objective facts to establish undervaluation. The court concluded that the authority failed to meet this standard and quashed the order, directing the completion of necessary formalities within six weeks. The court held that the authority's decision lacked proper reasoning and objective evaluation, leading to the order's invalidation. In conclusion, the court allowed the petition, setting aside the order based on the authority's failure to provide a valid and substantiated reason for the pre-emptive purchase of the property.
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