2008 (11) TMI 81 - HC - Income Tax

Property acquired u/s 269UD(1) - decision was taken to use the said property for the office of the Income Tax Department petitioner claim that they are lessees and are in possession of the property but there is no any record to show that the petitioners continued in possession of property petitioner had not taken an steps when Government earlier tried to take possession of property even in this petition, that order of pre-emptive purchase was not challenged petition is dismissed

Summary

Issues:
Quashing of letter converting property for Centralized Processing Centre under Section 269UD of the Income Tax Act, 1961 without hearing the lessees.

Analysis:
The petition sought to quash a letter converting a property for the use of the Centralized Processing Centre under Section 269UD of the Income Tax Act, 1961. The property in question, Plot No.5, Link Road, Faridabad, was acquired by the Income Tax Department, and a decision was made to use it for their office. The petitioners claimed that they, as lessees, were in possession of the property and should have been heard before the order under Section 269UD(1) was passed. They argued that the order was illegal due to the lack of their involvement in the decision-making process.

The Income Tax Department contended that the requirement of giving a hearing applies to the transferor in possession of the property, and if the transferor is not in possession, any other interested party can be heard. In this case, Sita Wanti Chadha, the owner in possession, and her deceased husband had a leasehold agreement over the property. The property was acquired by the State of Haryana in 1973 but was later released back to Sita Wanti Chadha. The Department argued that the possession was with Sita Wanti Chadha when the decision was made on 31.8.2000, and the property vested in the Central Government after compensation was paid to her.

The Court found that the property had been acquired in 2000, compensation was paid to Sita Wanti Chadha, and the property vested in the Central Government. The petitioners did not challenge this action until filing a writ petition in 2007, which was later withdrawn and refiled. The Court noted that the petitioners' claim of continued possession was not supported by the records, as only Sita Wanti Chadha had challenged the acquisition and sought possession. Physical possession was taken over on 28.9.2000, and the amount had been paid to Sita Wanti Chadha. The Court dismissed the petition, stating that the petitioners failed to challenge the order in 2000 and did not provide evidence of their possession or steps taken after the acquisition.

In conclusion, the Court found no merit in the petition and dismissed it, upholding the decision to convert the property for the Income Tax Department's use without granting a hearing to the lessees.