1995 (5) TMI 13 - HC - Income Tax

Appropriate Authority, Charitable Trust, Immovable Property By Central Government, Movable Property

Summary

Issues:
Challenge to orders passed under section 269UE(2) of the Income-tax Act, 1961 for being illegal, ultra vires, and contrary to law.

Analysis:
The petitioner filed a petition seeking to quash orders passed by the appropriate authority under section 269UE(2) of the Income-tax Act, 1961, alleging them to be illegal, ultra vires, and contrary to law. The respondent No. 1 issued a show-cause notice under section 269UD(1A) of the Act, contending that the apparent consideration of the property was underestimated by more than 15%. The petitioner argued that the property in question was undervalued and relied on comparable sale instances to support their case. The first respondent passed an order to purchase the property at a determined price, which was challenged in the petition.

The High Court found errors in the first respondent's decision-making process. It noted that the first respondent did not provide a positive conclusion based on objective facts regarding the valuation of the property. The rejection of sale instances by the first respondent was deemed erroneous, as the reasoning for rejecting them was flawed. The Court emphasized that the satisfaction under section 269UD must be based on concrete evidence and material, not merely on rejecting submissions. It referenced a previous decision to support the requirement for a thorough and objective decision-making process. The Court concluded that the first respondent's order did not meet the legal standards and lacked a valid basis for determining undervaluation.

In light of the above analysis, the High Court allowed the petition and quashed the impugned orders dated March 31, 1995. The first respondent was directed to complete necessary formalities within six weeks, including issuing a clearance certificate. The Court made the rule absolute and did not order costs to be paid.