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TMI Blog2012 (2) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... thority to grant permission/No Objection Certificate within stipulated time. See DLF Universal Ltd (2000 - TMI - 5795 - SUPREME Court) – Decided in favor of petitioner. - W.P.(C) 1757/2011 - - - Dated:- 2-2-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. ForAppellant: Mr.Sandeep Sethi, Sr.Advocate with Mr.Rajat Naved, Advocate. For Respondents: Mr.N.P.Sahni, Advocate SANJIV KHANNA, J: (ORAL)Rs. 1. The present writ petition under Article 226 impugns the order dated 22.02.2010 passed by the Appropriate Authority under Chapter XX-C of the Income Tax Act, 1961 (Act for short). The Appropriate Authority by the impugned order has passed an order for purchase u/s 269 UD(1) of the Act, inter alia, holding that the apparent consideration of Rs.23,80,387/- as declared in form No.37-I for purchase of property bearing No.20 Oak Wood Drive, Malibu Towne, Sohna Road, Gurgaon was under-stated. 2. The relevant facts are that two individuals, namely, Yogeshwar K.Dhawan and Namita Kaul Bhattacharya had originally applied and were issued an allotment letter dated 27.04.1994 in their name for a plot admeasuring 872.64 Sq.meters @ Rs.2392 per sq. meter by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial private agreement i.e. 24.02.1994 and not on the date of the formal agreement which was recorded in Form 37-I and filed on 25.08.2000. Rs. 4(i) The above contentions raised by the AR have been carefully considered. The sum and substance of these contentions is that for the purpose of valuation, the date of initial private agreement i.e. 2.2.1994 is relevant irrespective of the fact that Form No.37-I was filed on 25.08.2000. This contention of the AR is not tenable as the Hon ble Supreme Court in the case of DLF Universal Ltd. Ors. Has clearly held that foundation for exercise of jurisdiction by the Appropriate Authority u/s 269UD is the statement in Form No. 37-I and not agreement for transfer . The Appropriate Authority acquires the jurisdiction u/s 269UD of the Income Tax Act with the filing of the statement in Form No.37-I and not with respect to any other agreement for transfer. Therefore, for the purpose of determining fair market value of subject property the relevant date would be the date on which agreement for transfer is reduced into writing in Form No. 37-I. Following the judgement of the Hon ble Supreme Court referred to above, the Appropriate Authority canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er means and must be read as proforma agreement i.e. an agreement for transfer in the prescribed Form 37-I as the context so requires. Rs. (iv) The Appropriate Authority cannot be found fault with refusing to act upon or take cognisance of proforma agreement in statement Form 37-I (i) if the requisite particulars though available are not supplied or (ii) if the requisite particulars would be available at the time when the property has reached a state in which it is proposed to be transferred and yet the particulars are not being made available with precision because the form is being filed with a view to secure NOC for a transfer in contemplation. (v) A delay in filing Form 37-I is not a defect. The period of 15 days prescribed by Rule 48-L is directory and not mandatory. (vi)The period of 15 days is to be calculated from the date of entering into the proforma agreement in Form 37-I and not from the date of any other proceeding private agreement between the parties. (vii) If there are agreement more than one entered into between the parties, then it is the latest of the agreements which supersedes the earlier ones which has to accompany Form 37-I when filing before the Approp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for transfer is reduced into writing in the form of statement (Form 37-I). Can it be said under Rule 48L that the term 'agreement for transfer' mentioned in clause (c) of sub rule (2) thereof in fact means statement in Form 37-I ? If we take the literal meaning, this provision will become rather otiose. An 'agreement for transfer' is inter-parties and that can always be changed. That the term 'agreement for transfer' in fact means statement in Form 37-I, we can get clue from section 269UK which says that no person shall revoke or alter an agreement for the transfer of an immovable property or transfer such property in respect of which a statement has been furnished under section 269UC. Reference to this statement is certainly to Form 37-I. It would mean that agreement for transfer can be changed by the parties but they have been forbidden from doing so after statement in Form 37-I has been furnished. We have, therefore, to give appropriate meaning to the term 'agreement for transfer' appearing in clause (c) of sub-rule (2) of Rule 48L and cannot just adopt literal meaning. Foundation for exercise of jurisdiction by the Appropriate Authority under section 269UD is the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no objection certificate as required by section 269UL. We do not, therefore, think that the High Court was right in its findings as given in sub paras (ix) and (x) of para 28 of its judgment. Rs. 9. After noticing the observations made by the Supreme Court, the Division Bench held that the Supreme Court in DLF Universal Ltd. (supra) had not completely over-ruled the decision of the Delhi High Court in Ansal Properties and Industries Ltd. (supra) and the observations were made in the paragraph 27.1 of the said decision. For the sake of convenience, paragraph 27.1 in Ansal Properties and Industries Ltd.(supra) is reproduced below:- 27.1 The parties may enter into any private agreement for transfer. They must wait for the arrival of the day on which the property has assumed the shape in which it is proposed to be transferred. On that day they must enter into the proforma agreement (Form 37-1) and file the same seeking no-objection from the Appropriate Authority. It was submitted that this interpretation may put the parties to the agreement in a disadvantageous position. The initial private agreement may have been made in the year 1990. The property may take the shape in which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Authority acquires the jurisdiction u/s 269UD of the Income Tax Act with the filing of the statement in Form No.37-I and not with respect of any other agreement for transfer. Therefore, for the purpose of determining fair market value of subject property the relevant date would be the date on which agreement for transfer is reduced into writing in Form No.37-I. Following the judgment of the Hon ble Supreme Court referred to above, the Appropriate Authority cannot exercise jurisdiction in any other manner except based on the Statement in Form No.37-I. In the present case, it is admitted fact that the date mentioned on the Form No.37-I is 24.08.2000. Therefore, this was the relevant date for the purpose of determining the fair market value of the subject property as on this date was determined at Rs.57,39,353/- based on which the understament worked out to +58.55% taking FMV as base. This contention of the AR, thus fails. xxxxxxxxxx Rs. 7.2(e) without prejudice to the discussion in the above paragraphs, it is observed that alongwith Form No. 37-I, agreement dated 12th June, 1996 has been files. There is no other agreement filed alongwith the Form No. 37-I. thus, even the privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been made to the respondent no. 3. It is obvious that the parties had contracted on the basis of the then prevailing market rate of land. The land rate in the year 2000 was not the basis and could not have been the basis. The sale transaction in the present case had its own history and the transaction in question related to the original agreement/understanding which was admittedly entered into between the petitioner and the respondent No.3 vide nomination letter dated 20/21.2.1995; or the Plot Buyers Agreement dated 12.06.1996. 13. The petitioner has placed on record their reply submitted to the Appropriate Authority in which they had mentioned other sale instances wherein permission/approvals were granted by the Appropriate Authority in the year 1994-95. Three other instances are as under:- Date of Date of Particulars Area Rate/ Apparent FileNo. Dt. Of issue of Applicat- Allotment of property Sq.Mtr. Sq.Mtr. Conside- in which NOC by Ration NOC A.A. issued by A.A. 27.05.94 27.06.94 OW/11 987.96 2847.22 2812945 GR-3655 29.11.1995 12.05.94 07.10.94 OW/16 762.60 2255.64 2171300 GR-2685 30.03.1995 24.04.94 27.04.94 OW/21 1031.36 2757.80 2844285 GR-3408 20.09.1995 Rs. 14. The sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due regard to the explanation of the affected parties and meticulous examination of instances of comparable properties cited by the affected parties and the peculair circumstances resulting in the reduction of the value of the property. (7) It is impermissible to pass a pre-emptive purchase order where material is placed before the authority showing that there was no occasion for making undervaluation of a property with a view to evade tax or conceal income. (8) Since no appeal has been provided for in the Act, the authority is required to be more cautious in its approach while passing a preemptive purchase order. (9) The discretion of passing a pre-emptive purchase order is to be exercised by the subjective satisfaction of objective facts. Rs. (10) Except in glaring and clear cases of gross undervaluation and large scale tax evasion, a purchase order under section 269UD(1) of the Act in respect of properties with bona fide tenancy of long standing cannot be made. (11) Where the explanation offered in response to a show-cause notice is plausible, the plea that there is no tax evasion deserves to be ordinarily accepted. (12) While exercising powers of judicial review un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of a property in the market is required to be determined for action under Chapter XX-C of the Act. (22) The element of guess work inherent in most cases involving determining of market value has not to be taken as a factor against the citizens. (23) For determining undervaluation and tax evasion, events as on the date of the agreement of sale are to be taken into consideration. (24) Where the seller needs immediate money and agrees to sell his property at a value less than the market value, it would not be permissible to make an order of pre-emptive purchase. (25) The plea of distress sale and at the same time the plea that the property was agreed to be sold at the market value, are not mutually destructive and can be raised as alternate pleas.Rs. (26) The failure to tender or deposit the whole or any part of the amount of consideration in terms of section 269UG(1), attracts section 269UH resulting in the abrogation of the purchase order and re-vesting of the property in the transferor with all consequential results, in accordance with law. (Emphasis supplied) 16. In view of the aforesaid reasoning, we allow the present writ petition and a writ of certiorari is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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