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TMI Blog2002 (11) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, passed by the appropriate authority under section 269UD(1) of the Income-tax Act, 1961 (in short "the Act"), directing pre-emptive purchase of a residential house bearing No. 22/78, Punjabi Bagh, New Delhi, is under challenge in this writ petition. The material facts, leading to the filing of this petition are as follows : On August 12, 1996, the petitioner entered into an agreement with respondents Nos. 2 to 4, for purchase of the aforementioned 11/2 storeyed property, built on a plot admeasuring 2,255.55 sq. yds, for a consideration of Rs. 2.76 crores. As per the agreement, the vendors, respondents Nos. 2 to 4 herein, were paid a sum of Rs. 30 lakhs by way of earnest money; a further sum of Rs. 51 lakhs was to be paid within fifteen days from the date of grant of no objection certificate by the appropriate authority, and within ninety days of the receipt of all necessary and requisite permissions, no objections and clearances, the balance sale consideration of Rs. 1.95 crores was to be paid and simultaneously peaceful vacant physical possession of the property was to be delivered to the vendee. On the same day, the petitioner and respondents Nos. 2 to 4 filed a statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property should have been taken as nil as against Rs. 8,21,136 because a new construction had to be raised after demolishing the building; (iii) proper adjustments on account of various disadvantages in the subject property should have been made in calculating its fair market value; (iv) the sale instance relied upon by the appropriate authority was not comparable with the subject property and, further, it had certain advantages for the vendee, being situated in the immediate vicinity of their factory for which they must have paid extra price ; and (v) no objection certificate had been issued by the appropriate authority in respect of a much better placed property No. 10/13, Punjabi Bagh, New Delhi, hereinafter referred to as the petitioner's sale instance, in the month of August, 1995, when its apparent consideration had been declared at Rs. 2.54 crores. None of the pleas of the objectors found favour with the appropriate authority. Upon consideration of the submissions made and noticing that the petitioner's sale instance was not comparable with the subject property, being a sale transaction of August 1995, whereafter there had been substantial increase in the real estate va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to respondents Nos. 1 to 5 to deliver possession of the property and also pay interest on Rs. 3,60,25,000, paid by them, at 22 per cent. per annum from December 4, 1997, till the date of actual payment. While disposing of the application, by order dated December 7, 1999, the Income-tax Department was directed to hand over physical possession of the property to them, subject to the condition that they will not part with possession of the same in any manner and will not create any charge or encumbrance on the property. The auction purchasers were also restrained from making any structural changes in the subject property. But the prayer for payment of interest was not acceded to. It is stated that they are in physical possession of the property since then. We have heard learned counsel for the parties. Mr. C. S. Aggarwal, learned counsel for the petitioner, while reiterating the aforenoted grounds urged in the petition, has mainly contended that the subject property having been compared with an incomparable property and the petitioner's sale instance having been ignored, the impugned order is unsustainable. It is also asserted that the basis for determining the fair market value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bestows a right on the authority having jurisdiction over the area where the property is situated to make an order for pre-emptive purchase of the immovable property by the Central Government at an amount equal to the amount of apparent consideration as per the statement submitted to it under section 269UC. Section 269UD does not provide for any condition precedent to assume jurisdiction except that the property is situate in an area to which the Chapter is applicable and the statement in the prescribed form has been received in respect thereof. Except for providing the time limit within which an order under section 269UD can be made, there is no other statutory circumspection on the wide powers conferred under the section. However, the Supreme Court in C. B. Gautam v. Union of India [1993] 199 ITR 530, has laid down that the provisions of the said Chapter can be invoked when the ostensible sale consideration of the immovable property is less than its fair market value by 15 per cent. or more. It is also observed that in such a case the appropriate authority is entitled to draw a presumption that the undervaluation has been done with a view to evade tax but the presumption is rebu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court in Appropriate Authority v. Kailash Suneja [2001] 251 ITR 1, this court had observed that the satisfaction of the appellate authority for initiation of proceedings under Chapter XX-C is a subjective satisfaction on the objective facts and the reasons for the determination of the belief must have a rational and direct connection with the material coming to the notice of the appellate authority, though the question of sufficiency or adequacy of the material is not open to judicial review, It was also said that while exercising powers of judicial review under article 226 of the Constitution, though the case is not to be examined as an appellate court, it has to be kept in view that a citizen has no alternative remedy and it is permissible to examine whether extraneous matters have been considered by the authority and relevant materials have not been taken into consideration. In Smt. Sudha Patil's case [1999] 235 ITR 118 (SC), dealing with the same provisions and taking note of the aforenoted observations in Mrs. Kailash Suneja's case [1998] 231 ITR 318 (Delhi), their Lordships of the Supreme Court have held that if on the materials on record two views are possible, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is perverse or based on no material (vii) a patent or flagrant error of procedure (viii) order resulting in manifest injuries. Thus, it is trite that judicial review cannot be treated as an appeal from the decision of an inferior Tribunal and the High Court cannot sit in judgment over the correctness of the decision but is concerned only with the correctness of the decision making process. The court should interfere if the decision of the authority is not grounded on any evidence or is based on surmises or proceeds on irrelevant factors and so manifestly unreasonable that no reasonable person would, on the given facts and circumstances, come to the conclusion reached by the authority. Having examined the impugned order in the light of the aforenoted broad principles, we are of the considered view that it does not warrant any interference. As noted above, learned counsel for the petitioner has laid emphasis on two issues, namely, (1) the determination of the fair market value of the subject property being without proper basis inasmuch as it has been compared with an incomparable instance and the comparable instance cited by the petitioner has been ignored, and (2) the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be taken into consideration. Further, suitable adjustments, depending on various factors like location, time of sale, etc., are also accepted norms. Although Mr. Aggarwal had feebly pleaded that since the subject property was a built up structure, its fair market value should have been determined by applying the rent capitalisation method we find from the record that no such plea was ever raised before the appropriate authority. As noticed above, that the entire attempt of the petitioner was to justify the apparent consideration on the basis of its own sale instance. From the discussion in the impugned order, we find that the objections raised by the petitioner with regard to the sale instance of the Department and information with regard to her own sale instance, have been taken into consideration and all the objections raised by the petitioner before it, by which the adjustment on account of allocation, plot, size etc., was made have been dealt with by the appropriate authority. Bearing in mind the limited scope of judicial review, we find it difficult to hold that the view taken by the appropriate authority is perverse or so manifestly unreasonable that no reasonable person, o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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