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2004 (4) TMI 4 - SC - Income TaxAcquisition of Immovable Property by Central Government - view taken by the High Court and also by the Income-tax Appellate Tribunal, Chandigarh, to the effect that service of notice upon the transferor and the transferee under section 269D(2)(a) prior to the publication of the notice in the Official Gazette rendered the whole proceedings illegal and without jurisdiction, is clearly unsustainable in law - revenue appeal is allowed
Issues Involved:
1. Whether the service of notice under section 269D(2) of the Income-tax Act, 1961, prior to the publication of the notice in the Official Gazette under section 269D(1) renders the proceedings illegal and without jurisdiction. Issue-wise Detailed Analysis: 1. Service of Notice Prior to Gazette Publication: The core issue is whether serving notice to the transferor and transferee under section 269D(2) before the publication of the notice in the Official Gazette as required by section 269D(1) invalidates the entire proceedings. The court examined the statutory framework of Chapter XX-A of the Income-tax Act, 1961, and the specific provisions relevant to the initiation of acquisition proceedings. Statutory Provisions: - Section 269D(1): Mandates that proceedings for the acquisition of immovable property must be initiated by publishing a notice in the Official Gazette. - Section 269D(2): Requires the competent authority to serve the notice on the transferor, transferee, and other interested parties and to publish it in the locality and the office. - Section 269E: Allows objections against the acquisition within 45 days from the Gazette publication or 30 days from the notice service, whichever is later. Court's Interpretation: The court emphasized that the initiation of proceedings is fundamentally tied to the publication of the notice in the Official Gazette. This publication confers jurisdiction on the competent authority. However, the court clarified that the service of notice under section 269D(2) before the Gazette publication does not inherently prejudice the transferor or transferee, as they still have a full 45-day period from the Gazette publication to file objections. Precedents and Judicial Opinions: The judgment reviewed various High Court decisions: - Punjab and Haryana High Court (CIT v. Amrit Sports Industries): Held that the jurisdiction is complete upon Gazette publication, and procedural defects in notice service do not invalidate proceedings. - Allahabad High Court (Smt. Pratipal Kaur v. IAC of I.T.): Affirmed that notice service need not follow Gazette publication. - Karnataka High Court (A. Premchand v. IAC of I.T.): Concluded that errors in notice service are within the jurisdiction and do not nullify proceedings. - Bombay High Court (All India Reporter Ltd. v. Competent Authority): Determined that notice service methods are directory, not mandatory. - Patna High Court (Smt. Lalita Todi v. CIT): Deemed section 269D(2) provisions as directory. Conversely, the court noted contrary views from: - Punjab and Haryana High Court (CIT v. Des Raj): Considered pre-Gazette notice service as a jurisdictional error. - Delhi High Court (Satya Narain Prakash Punj v. Union of India): Quashed pre-Gazette notice service, relying on the principle that statutory procedures must be strictly followed. Conclusion: The Supreme Court concluded that the service of notice under section 269D(2) before the Gazette publication is an irregularity but does not render the proceedings illegal or without jurisdiction. The court held that the competent authority's jurisdiction is validly established by the Gazette publication, and prior notice service does not prejudice the parties involved. Consequently, the Supreme Court set aside the judgments of the Punjab and Haryana High Court and the Income-tax Appellate Tribunal, reinstating the validity of the acquisition proceedings. Judgment: The appeal was allowed, and the previous orders dated July 21, 1999, of the Punjab and Haryana High Court and August 16, 1992, of the Income-tax Appellate Tribunal were set aside.
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