1986 (3) TMI 54 - HC - Income Tax

Summary

Issues:
- Validity of acquisition proceedings under section 269H of the Income-tax Act, 1961
- Compliance with provisions of section 269D(2) of the Act
- Impact of procedural defects on jurisdiction of Competent Authority

Analysis:

The judgment delivered by the High Court of PUNJAB AND HARYANA pertained to six appeals under section 269H of the Income-tax Act, 1961, arising from the same order of the Income-tax Appellate Tribunal, Amritsar. The appeals involved a transfer of a vacant plot of land in Amritsar for an ostensible consideration, leading to initiation of acquisition proceedings by the Competent Authority. The Tribunal found the acquisition proceedings null and void due to non-compliance with section 269D(2) of the Act, setting aside the order of acquisition. The High Court noted that the Tribunal's decision contradicted a Full Bench judgment of the court in a similar case, emphasizing the importance of compliance with section 269D(1) for initiation of acquisition proceedings. The Full Bench clarified that the primary provision for initiation is publication in the Official Gazette, with subsequent notices being supplementary. Procedural defects in compliance with sub-section (2) were deemed not to affect the Competent Authority's jurisdiction, emphasizing that such defects do not vitiate the entire proceedings under the section.

The High Court, in light of the Full Bench judgment, allowed the six appeals, setting aside the Tribunal's order and remitting the case for disposal on merits. The judgment underscored that any procedural defect in compliance with section 269D(2) does not impact the jurisdiction of the Competent Authority and does not invalidate the proceedings under the section. The court highlighted that the assumption of jurisdiction by the Competent Authority is complete upon publication in the Official Gazette under section 269D(1), with defects in subsequent procedural steps being correctable without affecting the overall validity of the acquisition proceedings. The decision reinforced the distinction between jurisdictional aspects and procedural irregularities, emphasizing that errors in exercising power can be rectified through appropriate channels without nullifying the entire process.