1990 (12) TMI 74 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the appropriate authority u/s Chapter XX-C of the Income-tax Act.
2. Validity and legality of the document in question.
3. Consideration of separate ownership and independent transactions.
4. Compliance with other enactments like the Urban Land (Ceiling and Regulation) Act and the Delhi Municipal Corporation Act.

Summary:

1. Jurisdiction of the Appropriate Authority:
The primary issue was whether the jurisdiction of the appropriate authority u/s Chapter XX-C of the Income-tax Act is confined to either passing an order within the specified period for the purchase of property by the Central Government or issuing a no objection certificate for the transfer at the recorded consideration. The court held that the jurisdiction of the appropriate authority is limited to either passing an order for purchase or issuing a no objection certificate. The authority is only to examine the adequacy of the consideration and decide accordingly, without delving into the legality or validity of the transaction.

2. Validity and Legality of the Document:
The appropriate authority had questioned the legality of the transaction by considering the provisions of other enactments like the Urban Land (Ceiling and Regulation) Act and the Delhi Municipal Corporation Act. The court found that the appropriate authority had no jurisdiction to question the validity of the transaction, which had already been cleared by the Competent Authority under the Urban Land (Ceiling and Regulation) Act. The court emphasized that the appropriate authority must function within the confines of Chapter XX-C of the Income-tax Act.

3. Consideration of Separate Ownership and Independent Transactions:
The petitioner argued that her plot (Plot A) and her son's plot (Plot B) were separate entities with distinct ownership and should be considered independently. The appropriate authority had treated the plots as a composite property, which the court found to be beyond its jurisdiction. The court noted that the petitioner's transaction was independent and should not be clubbed with her son's transaction.

4. Compliance with Other Enactments:
The appropriate authority had also considered the refusal of the Municipal Corporation of Delhi to sanction building plans for Plot B and the provisions of the Urban Land (Ceiling and Regulation) Act. The court held that these considerations were irrelevant to the petitioner's transaction, which had been cleared by the Competent Authority under the Urban Land (Ceiling and Regulation) Act. The court found no prohibition under the Delhi Municipal Corporation Act or any other law on the sub-division and sale of sub-divided freehold plots in Delhi.

Conclusion:
The court concluded that the appropriate authority had acted beyond its jurisdiction and on irrelevant considerations. The petition was allowed, and the impugned order dated December 15, 1989, was set aside. The respondents were directed to issue a no objection certificate u/s 269UL of the Income-tax Act for the registration of the sale deed of Plot No. A 101, Friends Colony, New Delhi. The petition was disposed of with no order as to costs.