1995 (6) TMI 7 - HC - Income Tax

Appropriate Authority, Fair Market Value, Immovable Property By Central Government, Jurisdiction Of High Court, Movable Property, Petition Against Order, Transfer Of Property

Summary

Issues:
Challenge to order under section 269UD(1) of the Income-tax Act, 1961 and consequential order under section 269UE of the Act. Jurisdiction of the High Court to entertain the petition.

Analysis:
The petitioner challenged the order passed under section 269UD(1) of the Income-tax Act, 1961, alleging understatement of consideration by more than 15%. The appropriate authority considered submissions from both parties and concluded that the consideration had indeed been understated. The petitioner contended that the order was vague and deprived him of a reasonable opportunity to explain his case, causing prejudice. Additionally, it was argued that the proceedings lacked jurisdiction as there was no allegation of tax evasion. The court observed that the difference in consideration was less than 15%, relying on a previous judgment where a similar threshold was applied to declare the order illegal and liable to be quashed.

The jurisdictional issue was raised by the respondent, claiming that the High Court of Bombay should handle the matter as the property in question was located in Pune. However, the court held that it had jurisdiction as the cause of action arose within its local limits. The office of the appropriate authority was in Ahmedabad, where the petitioner had submitted his reply and where the impugned order was passed. The court dismissed the argument that the High Court of Bombay should have jurisdiction and allowed the petition challenging the orders. Additionally, respondent No. 2 agreed to withdraw their petition in the High Court of Bombay, further solidifying the High Court's jurisdiction in the matter.

In conclusion, the court quashed and set aside the impugned orders, directing the appropriate authority to complete necessary formalities within six weeks. The petition was allowed, and the rule was made absolute, with no order as to costs.