2013 (2) TMI 90 - HC - Income Tax

Principle of res judicata Principle of Constructive res judicata - Principle of estoppel - Preemptive purchase under Chapter XXC - Assessee entered into an agreement for sale of flat On 22nd October, 1984 at a consideration of Rs.18 lakhs - On 15th October, 1986 the statements in form 37-I was filed - On 12th December, 1986, the appropriate authority initially passed an order u/s 269UD(1) and the said property was directed to be purchased by the CG at a consideration of Rs.18 lakhs - Thereafter a sum of Rs.15 lakhs was paid to the appellant/transferee by the department, and the same was accepted - Balance sum of Rs.3 lakhs was released on 3rd February, 2002 and tendered but the appellant refused to accept the same Assessee file WRIT petition against said Sale of flat by CG WRIt decides against assessee This WRIT was filed by assessee against the judgment of the Single Judge is per incuriam as the previous decisions on this point have been ignored Held that - the Court or Authority not having any jurisdiction at all has decided the issue and in that context it was held by the Supreme Court consistently that if any issue or matter decided by the Court or Authority not having jurisdiction the principle of res judicata will not be applicable The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a respondent is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation, when a matter whether on a question of fact or a question of law has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again. This principle of res judicata is embodied in relation to suits in S.11 of the Code of Civil Procedure; but even where Sec. 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation proceed on the basis that the previous decision was correct. The parties no doubt on paper reached the agreement on 22nd October, 1984 almost 2 years before the aforesaid chapter came into force but if a party sits on the agreement and does not want to enforce it date of execution of agreement is immaterial as far as this chapter is concerned. Date of filing of statement in Form 37-I with the sale agreement is deemed to be the date of agreement which is sought to be enforced irrespective of the anterior date of agreement put by the parties. In favour of revenue

Issues Involved:
1. Jurisdiction and applicability of Chapter XXC of the Income Tax Act, 1961.
2. Validity of the preemptive purchase order and the consideration amount.
3. Alleged misdescription of the property area in sale notices.
4. Principle of res judicata and estoppel.

Issue-wise Detailed Analysis:

1. Jurisdiction and Applicability of Chapter XXC:
The appellant argued that the agreement for sale was dated 22nd October, 1984, whereas Chapter XXC was incorporated on 1st October, 1986, with no retrospective effect. The appellant contended that any action taken under this chapter was null and void. The court noted that the appellant had voluntarily filed Form 37-I under Chapter XXC, and the appropriate authority processed it as per the law. The court upheld the previous judgment which confirmed the applicability of Chapter XXC, stating that the agreement fell within its purview as the parties filed Form 37-I after the chapter came into effect.

2. Validity of the Preemptive Purchase Order and Consideration Amount:
The appellant challenged the order of preemptive purchase, arguing that the consideration amount was not paid within the stipulated time, thus invalidating the sale. The court found that Rs.15 lakhs out of Rs.18 lakhs was accepted by the appellant, and the balance Rs.3 lakhs was tendered within the time but refused by the appellant. The court held that the consideration amount was duly tendered as required under Section 269UG of the Income Tax Act, 1961, and thus, the sale was valid.

3. Alleged Misdescription of the Property Area:
The appellant claimed that the property area was misdescribed in the sale notices, affecting the compensation amount. The court noted that the appellant had initially declared the area as approximately 6000 sq.ft. in Form 37-I. The court held that the appellant was estopped from raising the issue of area discrepancy at a later stage, as it was their responsibility to rectify any errors at the earliest opportunity.

4. Principle of Res Judicata and Estoppel:
The court addressed the principle of res judicata, noting that the issues raised by the appellant had already been decided in a previous writ petition (W.P. No.1825 of 2001) and were not appealed against, thus becoming final. The court emphasized that even a wrong decision by a competent court is binding if it reaches finality. The court rejected the appellant's argument that the previous judgment was per incuriam, stating that such a plea cannot be entertained in collateral proceedings. The court concluded that the current appeal was barred by res judicata and estoppel.

Conclusion:
The court dismissed the appeal, upholding the validity of the preemptive purchase order and confirming the applicability of Chapter XXC. The court found no merit in the appellant's arguments regarding jurisdiction, consideration amount, property area discrepancy, and the principle of res judicata, and imposed costs of Rs.10,000 on the appellant.

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