1994 (10) TMI 2 - HC - Income Tax

Appropriate Authority, Movable Property, Purchase Of Immovable Property By Central Government, Rectification Of Mistakes

Summary

Issues:
Challenge to legality of order under section 269UD of Income-tax Act, 1961.
Validity of transfer agreement under Urban Land (Ceiling and Regulation) Act, 1976.
Jurisdiction of appropriate authority under Chapter XX-C of Income-tax Act.

Analysis:
The petitioners challenged an order passed under section 269UD of the Income-tax Act, 1961, concerning the transfer of development rights. The appropriate authority held the transfer void ab initio due to alleged violation of the Urban Land (Ceiling and Regulation) Act, 1976. The petitioners argued that the authority exceeded its jurisdiction by declaring the agreement non est. They relied on precedents emphasizing the limited role of the authority in determining property purchase by the Central Government. The court found merit in the argument, citing previous decisions restricting the authority's scope to issues within the Act's provisions.

Regarding the alleged violation of the Urban Land Act, the petitioners had obtained exemption under section 20 of the Act, subject to conditions set by the State Government. The authority's stance that permission was necessary for the transfer of development rights was deemed erroneous. The court highlighted that the State Government's permission was required only after the authority issued a no objection certificate or a purchase order. The court referenced a Supreme Court case to support the view that the Act did not impose a blanket ban on transfers but mandated permission in specific cases.

The court emphasized the jurisdictional limits of the appropriate authority under Chapter XX-C of the Income-tax Act. The authority's failure to act within the prescribed timeframes does not grant it the power to pass fresh orders or declare agreements non est. The court rejected the request for remand, noting that rectification powers do not extend to issuing new orders after the statutory period. The judgment set aside the impugned order and granted relief to the petitioners, emphasizing the importance of adhering to the Act's procedural requirements.

In conclusion, the court ruled in favor of the petitioners, holding the impugned order as invalid and granting the requested relief. The judgment reiterated the authority's limited jurisdiction under the Income-tax Act and emphasized the need for adherence to statutory timelines and procedural requirements. The decision underscored the significance of precedent in interpreting statutory provisions and ensuring the proper exercise of administrative powers.