1990 (8) TMI 125 - HC - Income Tax

Summary

Issues Involved:
1. Validity of the notice under section 6(1) of SAFEMA.
2. Non-service of notice under section 6(2) on other occupants.
3. Language of the notice.
4. Non-supply of the detention order under COFEPOSA.
5. Ownership and cost of construction of the disputed property.
6. Source of funds for the construction of the property.

Issue-wise Detailed Analysis:

1. Validity of the notice under section 6(1) of SAFEMA:
The appellant argued that the notice under section 6(1) was invalid as it did not communicate the reasons for the belief that the property was illegally acquired. However, the court found that the notice clearly mentioned the Competent Authority's belief, and the reasons were recorded in writing and included in the paper book provided to the appellant. The court held that the omission to supply the reasons did not invalidate the proceedings as it did not cause material prejudice to the appellant. The condition precedent for jurisdiction under section 6(1) was satisfied.

2. Non-service of notice under section 6(2) on other occupants:
The appellant contended that the notice was invalid as it was not served on other occupants of the building, who were his sons and their families. The court found this contention without merit, as the notice under section 6(1) did not indicate that the property was held by another person on behalf of the appellant. The occupants were family members, and the ownership was in the appellant's name, hence no requirement for notice under section 6(2).

3. Language of the notice:
The appellant argued that the notice should have been in Gujarati instead of English, as he was illiterate. The court rejected this argument, stating that English is an official language for Union purposes and the appellant had responded to the notice, indicating comprehension. Therefore, the issuance of the notice in English was not bad in law.

4. Non-supply of the detention order under COFEPOSA:
The appellant argued that the proceedings were vitiated by the non-supply of the detention order of his son under COFEPOSA. The court noted that the appellant did not claim the detention was bad in law or request a copy of the detention order during the proceedings. The court held that the validity of the detention order could not be challenged in the present SAFEMA proceedings and rejected the contention.

5. Ownership and cost of construction of the disputed property:
The appellant initially admitted ownership of the property and later attempted to dispute it. The court found consistent admissions and a certificate from Daman Municipal Council confirming ownership. Regarding the cost of construction, the Competent Authority estimated it at Rs. 1,75,000, while the appellant claimed Rs. 60,000. The Assistant Valuation Officer estimated Rs. 1,68,800. The appellant failed to provide evidence to support his lower estimate. The court accepted the Valuation Officer's estimate of Rs. 1,68,800.

6. Source of funds for the construction of the property:
The appellant claimed the cost was met by himself and his sons. Initially, he stated it was from his income, but later claimed contributions from family members. The court found the appellant's initial consistent statements more credible and rejected the later claims as afterthoughts. The affidavits from family members lacked corroborative evidence. The court held that the entire cost of construction was met by the appellant from unexplained sources. The Competent Authority's finding that the appellant's legal income was sufficient only for other properties and not for the disputed property was upheld. The house was rightly regarded as "illegally acquired property" and its forfeiture was justified.

Conclusion:
The court upheld the order of the Competent Authority dated August 31, 1989, under sections 7(1) and 7(3) of SAFEMA and dismissed the appeal.