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Issues:
1. Compliance with notice requirements under section 269D of the Income-tax Act. 2. Validity of proceedings for acquisition of immovable property. 3. Rights of transferors and transferees in acquisition proceedings. Compliance with notice requirements under section 269D of the Income-tax Act: The case involved an appeal under section 269H of the Income-tax Act against the order of the Income-tax Appellate Tribunal regarding the acquisition of a property. The primary issue raised was the compliance with the notice requirements under section 269D(2) of the Act. The appellants contended that the proceedings were vitiated as notices were not served on all the transferors, as mandated by the law. The revenue argued that serving notice on one of the transferors should suffice, as she could be deemed the representative of the others. The court analyzed the requirements of section 269D(2), which mandates notice to be served on all transferors, transferees, and interested parties. It emphasized that failure to serve notices on all transferors, who had title, possession, and interest in the property, would render the proceedings illegal and void. The court cited precedents from land acquisition cases to support the mandatory nature of notice requirements and concluded that serving notice on only one transferor did not fulfill the statutory obligations, thus vitiating the proceedings. Validity of proceedings for acquisition of immovable property: The court delved into the legal framework of Chapter XX-A of the Income-tax Act, which deals with the acquisition of immovable properties to counteract tax evasion. It outlined the conditions precedent for initiating acquisition proceedings, including the fair market value of the property, understatement of consideration, and the authority's belief regarding tax evasion. The court highlighted the importance of affording all concerned parties an opportunity to be heard before depriving them of their property rights. It emphasized that the right to file objections in acquisition proceedings is a valuable statutory right that must be upheld. The court scrutinized the facts of the case, where notices were not served on all transferors, and concluded that denying them the opportunity to object rendered the entire proceedings illegal and void. Rights of transferors and transferees in acquisition proceedings: The judgment underscored the significance of ensuring that all parties involved in a property transfer are duly notified and given the chance to present their objections in acquisition proceedings. It differentiated between individual legal representatives and the need to serve notices on each concerned party separately. The court rejected the revenue's argument that notice to one transferor sufficed for all, emphasizing that each transferor had distinct rights and interests that needed to be safeguarded. By denying two of the transferors the opportunity to challenge the acquisition proceedings, the court held that their statutory rights were violated, leading to the invalidation of the entire process. The judgment highlighted the fundamental principle of natural justice that requires all affected parties to be heard before their rights are infringed upon, especially in matters of property acquisition and tax liability evasion.
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