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Issues involved: Dispute over fair market value of property u/s 269H, legality of acquisition proceedings u/s 269D(2) of I.T. Act.
Fair Market Value Dispute: The property in question was sold for Rs. 45,000, but the IAC estimated its market value at Rs. 80,000, leading to acquisition proceedings being initiated. The Tribunal did not address the valuation issue but focused on the legality of the acquisition process. Legality of Acquisition Proceedings: The key contention was the failure to serve notice on Jagdish Mohan, a minor at the time of the sale deed, as required u/s 269D(2) of the I.T. Act. The Competent Authority did not notify Jagdish Mohan, who was a co-owner, and the Tribunal ruled the acquisition illegal due to this omission. Notice Requirement: The Competent Authority is mandated to serve notice on all relevant parties, including the transferor, transferee, and occupants of the property. Failure to serve notice on Jagdish Mohan, a co-owner, was deemed crucial, as he was not represented in the proceedings by his mother, Smt. Phoolmati Devi, who lacked legal standing to act on his behalf. Legal Implications: Non-compliance with the notice requirement was held to vitiate the entire acquisition process, rendering it invalid. The court emphasized the mandatory nature of the notice provision, citing precedent where similar omissions led to proceedings being invalidated. Impact of Legislation: The court rejected arguments that a technical defect in notice service should not affect the acquisition's validity, citing the specific requirements of the law. Section 292B of the I.T. Act, dealing with technical errors in notices, was deemed inapplicable in cases where no notice had been served. Precedent and Conclusion: Reference to a previous case highlighted the importance of proper notice service in acquisition proceedings. Ultimately, the appeal by the Commissioner of Income-tax was dismissed, affirming the Tribunal's decision that the failure to notify all relevant parties, including Jagdish Mohan, rendered the acquisition invalid.
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