1981 (11) TMI 39 - HC - Income Tax

Summary

Issues:
1. Quashing of order under Chap. XX-A of the I.T. Act
2. Right to be heard before passing an order
3. Requirement of reasons for dropping proceedings under s. 269B of the Act
4. Statutory right to be heard under s. 269F of the Act
5. Obligations towards occupants in acquisition proceedings
6. Significance of notice to interested persons in acquisition proceedings
7. Administrative vs. quasi-judicial nature of proceedings
8. Right to be heard contingent on pursuit of acquisition proceedings

Analysis:
The petitioner sought to quash an order made by the 2nd respondent, IAC of Income-tax, dropping further proceedings under Chap. XX-A of the I.T. Act concerning the premises he occupied. The petitioner contended that he was aggrieved for not being heard before the order, the lack of reasons for dropping the proceedings, and his statutory right to be heard under s. 269F of the Act. The court noted that the purpose of Chap. XX-A is to penalize undervalued property transactions for tax evasion, with a nexus between the State, transferor, and transferee. It emphasized the need to notify interested parties in acquisition proceedings, as mandated by s. 269D of the Act.

The court clarified that occupants need only be notified in case of acquisition to alert them of potential rights extinguishment, without a requirement to be heard if proceedings are dropped. It held that the decision to acquire is administrative, and no civil consequence arises from not hearing occupants when dropping proceedings. Regarding the lack of reasons in the order, the court stated that administrative decisions do not always require detailed reasons, especially when no civil consequences follow.

The judgment highlighted that the tenant's right to be heard under s. 269F exists only if acquisition proceedings continue, not if abandoned. As the petitioner was not directly involved in the acquisition beyond being an occupant, the court found no cause for interference. It emphasized that any loss to public revenue is a concern for the CBDT, not the petitioner. Consequently, the petition was dismissed without issuing a rule, as the petitioner's interests were not significantly impacted by the dropped proceedings.