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TMI Blog1988 (5) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... , waters, water courses drains, all structures and fixtures walls on all sides including the compound wall with all the electric installations light, bulbs, shades, fans pumps and motors and all the rights by way of air light ways, easements, advantages and appurtenances to the same forming premises No. 20 (No. 7), Lake First Cross Street, Nungambakkam, Madras 34 bounded on the north by N. Srinivasa Rao's house, east by M.G. Balu's house, south by the aforesaid street and west by T. Manivanna Iyengar's house with an extent of 2383 square feet and comprised in re-survey No. 590/5 in Nungambakkam village, Collector's Certificate No. 6890 situate in the municipal division No. 55 and situated within registration district of Madras South and registration sub-district of.." Schedule-B in Document No. 869 of 1982 read as under: "Undivided half share in the land in the Schedule A property and the first floor building thereon. In witness whereof the above named vendor has set her hand and signature on the day, month and year first above written." Schedule-B in Document No. 870 of 1982 read as under: "Undivided half share in the land in the Schedule A property and the ground floor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the issue of notice under s. 269D and, therefore, such proceedings were to be dropped and the Competent Authority was precluded from passing the order of acquisition dt. 29th Jan., 1988. 5. Inasmuch as, the objection raised based on the Circular of the Board went to the very root of the matter, we adjourned the case so that the learned Departmental Representative could have time to take necessary instructions. Before we go to the arguments of the parties, it is necessary to briefly recount the background of this case. 6. In the present case, originally an order of acquisition had been passed on 27th March, 1985. This order was the subject of appeal to the Tribunal and the matter was decided by the order of the Tribunal in IT (Acq.) A. No. 4/85 dt. 30th Oct., 1985. The said order forms Annexure-A to this order because the full facts have been set out therein. At this stage we would point out that the date of the acquisition order as mentioned in the first paragraph of the order of the Tribunal of 30th Oct., 1985 as 30th March, 1985 is a typographical error and the correct date is 27th March, 1985. Several contentions had been urged before the Tribunal and the finding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity is a sequel to this. 7. From the facts set out aforesaid, it is clear that when the Competent Authority passed the original order on 27th March, 1985, the Circular of the 16th May, 1986 had not been issued and even the Finance Bill of 1986 had not been introduced. It was by this Bill that the provisions of s. 269RR were introduced by which the Chapter relating to acquisition proceedings (Chapter XX-A), it was stated, would not apply to transfer of immovable property made after 30th Sept., 1986. When the Tribunal decided the matter on 30th Oct., 1985 also neither the Finance Bill of 1986 had been introduced nor had the Board's Circular been issued. When the Competent Authority passed the order for the second time on 31st March, 1986, still the Circular of the Board of 16th May, 1986 had not been issued and the finance Act of 1986 had not yet received the assent of the President. By the time the Tribunal came to decide the appeal for the second time on 29th July, 1986, the Circular of the Board of 16th May, 1986 had been issued but it was not brought to the notice of the Tribunal nor was it noticed by the Bench. 8. The case has been very ably argued at length on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no saving clause like that in the Act of 1961 (s. 263(3)) that the period of limitation would not apply to orders passed to give effect to the findings of the Tribunal etc., to make a fresh order. The decision of the Supreme Court was that the time limits applied only where the Commissioner suo motu initiated action for revision and not to those cases where orders were passed to give effect to appellate decisions because any contrary interpretation would not advance the cause of justice. According to the Supreme Court, what was set out in s. 263(3) was only declaratory of the position as it always stood. The Supreme Court held that the consequential order which would be passed by the Commissioner would not be barred by limitation not because on setting aside of the Commissioner's order by the Tribunal the date of the original order of the CIT stood restored as the crucial date but because the interpretation to be placed was that limitation did not apply when orders were passed to give effect to appellate orders. 10. It may be true that when an assessment order is set aside by the first appellate authority and it is restored by the second appellate authority, then the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal Representative submitted that there is a difference between an acquisition proceeding which is pending after initiation by issue of notice under s. 269D and prior to the passing of the acquisition order for the first time, and an acquisition proceeding which is to be re-done in pursuance of an order of an appellate authority setting aside the case to be re-done after holding that the initiation of proceeding was valid. This contention was opposed by the learned counsel for the assessee who submitted that there was no difference. 13. In the present case, by the order of the Tribunal dt. 30th Oct., 1985, the Tribunal expressly upheld the validity of initiation of proceedings and the notice issued. The Tribunal thereafter set aside the findings of the Competent Authority and directed the Competent Authority after giving a full and fair opportunity of being heard to all parties concerned "to pass such orders as warranted in law and as the circumstances may merit". This, is therefore, clearly a case where after the order of the Tribunal of 30th Oct., 1985, the position was that acquisition proceedings stood initiated by issue of notice under s. 269D and there was nothing more to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d generated a great deal of litigation and harassment." In view of the aforesaid, it is proposed to provide that no proceedings under s. 269C of this Chapter shall be initiated in respect of the properties transferred after 30th Sept., 1986. As a consequential measure, s. 276AA of the Act is proposed to be omitted. These amendments shall take effect from 1st Oct., 1986." Therefore, the provisions relating to acquisition in all cases become inapplicable for transfer after 30th Sept., 1986. The CBDT by its Circular dt. 16th May, 1986, which bears repetition, stated as under : "Circular No. 455, dt. 16th May, 1986. Subject : Acquisition of immovable properties under Chapter XXA of IT Act, 1961: Guidelines-Regarding. The Finance Bill, 1986, has proposed that no proceedings shall be initiated under s. 269C of the IT Act, 1961, in respect of a property transferred after the 30th Sept., 1986. The Bill also proposes to insert Chapter XXC providing for purchase by Central Government of immovable properties in certain cases of transfer. With a view to achieve early finalisation of proceedings under the existing Chapter XXA of the IT Act, 1961, the Board has decided that w.e.f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act." The Supreme Court has categorically stated that Circulars issued by the Board are binding on all officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act. Such is the law as laid down by the Supreme Court as far as the beneficial circular are concerned. Adverting specifically to acquisition matters and circulars issued thereunder, the High Court of Karnataka in the case of B.M. Marappa and Ors. vs. IAC (1986) 160 ITR 642 (Kar) (the circular was a different one than the one under consideration), observed as under: "Sri Srinivasan contends for affirming the acquisition without reference to the circular of the Board issued during the pendency of these appeals before this Court. When the Tribunal and the IAC decided the cases, the 1976 Act had not been enacted and the Board issuing circular instructions thereunder did not arise. But the Board, with due regard to the later enactment, has issued circular instructions on 17th Nov., 1975, which it was competent to do under the Central Board of Revenue Act, 1963 (Act No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aborately in our original order dt. 30th Oct., 1985. Therefore, proceedings in all cases where notice under s. 269D had been validly issued have arisen because the Competent Authority had reason to believe that there was under-statement. When the Circular says that in such cases where the apparent consideration is less than Rs. 5 lakhs, the proceedings are to be dropped, it would apply to all cases where the final order has not yet been passed. It would not matter, that in some cases no investigation may have been done, and in some other cases investigations may have reached a point of finality short of passing the final order. In all matters, the Competent Authority has no option but to drop the proceedings, if the apparent consideration was less than Rs. 5 lakhs, if the Competent Authority has not passed his final orders when the Circular of the Board came into effect. No distinction can be made between one case and another. Hence the mere fact that in the present case, there may have been a letter from the transferor that he had received a total sale consideration of Rs. 5,70,000, that would not make any difference because, as we have discussed in our order of 30th Oct., 1985 by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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