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TMI Blog2000 (11) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and was not to be acted upon. A brief reference to the factual aspects would suffice : On October 9, 1989, an agreement to sell was entered into by the petitioner and Mr. Pradeep Narang, respondent No. 3, in respect of plot No. B, at 101, New Friends Colony, New Delhi (hereinafter referred to as "the subject property"), for a total sale consideration of Rs. 85 lakhs. On the said date, another agreement to sell was also executed between J. K. Indus tries Limited and Smt. Satwant Narang, mother of respondent No. 3, by which plot No. A, at 101, New Friends Colony, New Delhi, was agreed to be sold to J. K. Industries Limited. The statement in the prescribed Form No. 37-I under section 269UC of the Act was filed on October 20, 1989, by the petitioner and respondent No. 3. On December 15, 1989, the authority held that both the plots A and B being contiguous have to be considered together and are not separable. Therefore, no no objection certificate in terms of section 269UC of the Act was issued, inter alia, on the ground that part of land was covered by the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as "the Land Ceiling Act"), and, therefore, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection certificate or even before the consideration of Form No. 37-I application, which was filed afresh. This, according to him, was a fraud on the statutory provisions and being illegal, the authorities are justified in declining to issue the no objection certificate. In order to appreciate the rival submissions it is necessary to take note of the provisions of the Act. They are sections 269UC, 269UD and 269UK. They read as follows : "269UC. (1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, no transfer of any immovable property in such area and of such value exceeding five lakh rupees, as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as the transferor) and the person to whom it is proposed to be transferred (hereinafter referred to as the transferee) in accordance with the provisions of sub-section (2) at least four months before the intended date of transfer. (2) The agreement referred to in sub-section (1) shall be reduced to writing in the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the period of limitation referred to in the second proviso shall be reckoned, where any defect as referred to in sub-section (4) of section 269UC has been intimated, with reference to the date of receipt of the rectified statement by the appropriate authority : Provided also that in a case where the statement referred to in section 269UC in respect of the immovable property concerned is given to an appropriate authority, other than the appropriate authority having jurisdiction in accordance with the provisions of section 269UB to make the order referred to in this sub-section in relation to the immovable property concerned, the period of limitation referred to in the first and second provisos shall be reckoned with reference to the date of receipt of the statement by the appropriate authority having jurisdiction. to make the order under this sub-section : Provided also that the period of limitation referred to in the second proviso shall be reckoned, where any stay has been granted by any court against the passing of an order for the purchase of the immovable property under this Chapter, with reference to the date of vacation of the said stay. (1A)Before making an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in addition to the two options which have been mentioned by the Supreme Court in Tanvi Trading and Credits P. Ltd.'s case [1991] 191 ITR 307, we agree with Shri G. S. Bafna that the third option was also available to the appropriate authority, i.e., not to act upon the invalid statement in Form No. 37-I filed by the parties after effecting the transfer and violating section 269UC(1) and the parties had thus rendered themselves liable to action for violating the provisions of the Income-tax Act, We are of the considered opinion that when the parties have violated the provisions of the Income-tax Act and have acted in a manner so as to thwart the very purpose of the provisions relating to the restrictions on transfer of immovable property and to thwart the Central Government's pre-emptive right of purchase, besides the alternatives of either purchasing or issuing a no objection certificate, the option is also available not to act upon the statement in Form No. 37-I which is found to be violative of the provisions of the Income-tax Act and to prosecute the concerned parties by taking resort to the machinery under the Act. Mr. Ranka has failed to cite any case in which there is a dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Appropriate Authority v. Tanvi Trading and Credits P. Ltd. [1991] 191 ITR 307 (SC). The only right which section 269UD confers on the appropriate authority is to enable it to make an order purchasing the property at an amount equal to the amount of apparent consideration. It does not give jurisdiction to the appropriate authority to adjudicate upon the legality of the transaction which is proposed to be entered into and it is not concerned with the validity of the sale. There is nothing in sub-section (4) of section 269UC as conferring a power on the appropriate authority to decide the question about the legality of the agreement which has been entered into by the parties and on the basis of which statement under section 269UC(2) has been submitted. What is contemplated by sub-section (4) is that in case there is a defect in the statement, which must comply with the requirements of sub-section (3), the appropriate authority may intimate the parties concerned about the defect and give opportunity to rectify the same within a specified time. In other words, sub-section (4) of section 269UC envisages a defect which can be removed and rectified within the stipulated time of fiftee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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