2010 (10) TMI 155 - HC - Income Tax

Purchase of immovable property by Central Govt. Allocation of residential plot Assignee of letter of allocation entering into agreement with builders for development of plot - agreement filed in Form 37-I was accompanied with the agreement that was entered into with the original allottee as well as the agreement that was entered into with the assignee Matter remanded to authority Petition allowed

Issues Involved:
1. Jurisdiction of the Appropriate Authority under Section 269UD(1) of the Income-tax Act, 1961.
2. Application of the decision in Ansal Properties and Industries Ltd. v. Appropriate Authority.
3. Validity of the order passed by the Appropriate Authority.
4. Consideration of agreements in Form 37-I by the Appropriate Authority.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Appropriate Authority under Section 269UD(1) of the Income-tax Act, 1961:
The petitioner invoked the extraordinary jurisdiction of the court under Article 226 of the Constitution of India, seeking a writ of certiorari to quash the order dated November 30, 2000, passed by the Appropriate Authority under Section 269UD(1) of the Income-tax Act, 1961. The petitioner also sought a writ of mandamus to issue a "no objection certificate" for Plot No. 20, Oak Wood Drive, Malibu Town, Sohna Road, Gurgaon.

2. Application of the decision in Ansal Properties and Industries Ltd. v. Appropriate Authority:
The petitioner argued that the Appropriate Authority erroneously concluded that the decision in Ansal Properties and Industries Ltd. v. Appropriate Authority [1999] 236 ITR 793 (Delhi) was overruled by DLF Universal Ltd. v. Appropriate Authority [2000] 243 ITR 730 (SC). The petitioner contended that the Appropriate Authority should have considered the agreement entered into by the petitioner with the developer, rather than only the Form 37-I filed before it.

3. Validity of the order passed by the Appropriate Authority:
The Appropriate Authority had determined the value of the property at Rs. 57,39,353 based on the market value on the date of determination, rejecting the contentions of the petitioner and the developer. The petitioner challenged the correctness of this order, asserting that the Appropriate Authority failed to address the issue properly and misinterpreted the legal precedents.

4. Consideration of agreements in Form 37-I by the Appropriate Authority:
The court scrutinized the order of the Appropriate Authority and found that the decision in Ansal Properties and Industries Ltd. [1999] 236 ITR 793 (Delhi) had not been entirely overruled by DLF Universal Ltd. [2000] 243 ITR 730 (SC). The court noted that the Appropriate Authority should consider agreements as per paragraph 27.1 in Ansal Properties and Industries Ltd. [1999] 236 ITR 793 (Delhi), which stated that the proforma agreement (Form 37-I) should be accompanied by the private agreement entered into earlier, and both should be considered by the Appropriate Authority.

Conclusion:
The court quashed the order passed by the Appropriate Authority and remitted the matter back to the said authority for reconsideration. The Appropriate Authority was directed to consider the agreements as per the guidelines in Ansal Properties and Industries Ltd. [1999] 236 ITR 793 (Delhi) and to provide adequate opportunity of hearing to the petitioner. The exercise was to be completed within four months from the date of receipt of the court's order. The writ petition was allowed to the extent indicated, with no order as to costs.

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