2008 (12) TMI 210 - HC - Income Tax

This petition is filed to challenge the order passed by the Appropriate Authority under section 269UD(1) whereby property is sought to be compulsorily purchased under the provisions of Chapter XX-C - in the facts of the present case, Dilip Bhatia, who claims to be the co-owner of the flat in question, was admittedly in possession of the fiat in question on the date on which Damayanti Bhatia having 50 per cent. share in the flat in question had purported to sell the flat in question. Since Damayanti Bhatia had no right to sell the flat in question without the consent of Dilip Bhatia and as per the consent decree it is established that she had only 50 per cent. share in the flat in question, the purported sale by Damayanti was invalid and consequently the purchase order passed by the Appropriate Authority on February 23, 1993, cannot be sustained.

Summary

Issues:
Challenge to order for compulsory purchase of a flat under Income-tax Act, 1961; Validity of sale of flat without consent; Interpretation of consent decree in co-ownership dispute.

Analysis:
1. Challenge to Compulsory Purchase Order: The petition challenged the order for the compulsory purchase of a flat under the Income-tax Act, 1961. The petitioners contended that the purchase order was subject to the outcome of a pending suit regarding ownership of the flat. The court noted this ground as a basis for allowing the petition.

2. Sale of Flat Without Consent: The flat in question was initially tenanted by two individuals who later converted it into an ownership flat. Upon the death of one co-owner, his wife purported to sell the entire flat without the consent of the other co-owner. The court found that since the wife had only a 50% share in the flat, she had no right to sell the entire property without the consent of the other co-owner.

3. Interpretation of Consent Decree: A co-ownership dispute arose regarding the ownership of the flat. The court examined the decree in a related suit which confirmed one co-owner's 50% share in the flat. The court found that the sale by the wife of the deceased co-owner was invalid as she did not have the right to sell the entire property without the consent of the other co-owner. The court concluded that the purchase order by the Appropriate Authority was unsustainable in light of the co-ownership decree.

4. Final Judgment: The court quashed and set aside the impugned order for compulsory purchase of the flat. The court held that since the wife had only a 50% share in the flat, her sale of the entire property was invalid. The court allowed the petition, ruling in favor of the petitioners and making the rule absolute with no order as to costs.