9911796707
TMI Blog2000 (11) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... situated at 23, Jorbagh, New Delhi, was to be purchased by the petitioner for a total sale consideration of Rs. 41.50 lakhs. In terms of the said agreement for sale, the petitioner had paid a total amount of Rs. 11.50 lakhs to respondent No. 4 and it was agreed that the balance amount would be paid thereafter. The operation of the said agreement for sale was extended from time to time. The effect of such extension and supplemental agreements was to extend the date for execution and registration of the sale deed consequent upon non-receipt of requisite approval from various authorities. It is contended before me that after the date of the execution of the agreement for sale, the petitioner paid further amounts aggregating Rs. 10 lakhs to respondent No. 4 of which Rs. 5 lakhs was paid on February 1, 1983, and Rs. 2.50 lakhs was paid on February 10, 1983, and the balance amount of Rs. 2.50 lakhs was paid in the year 1985. One important factor which has to be taken note of is that possession of the property was delivered by respondent No. 4 to the petitioner-company on January 1, 1983, itself, which finds mention in terms of clause (3) of the agreement for sale dated January 1, 1983. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69UB of the Income-tax Act, 1961. In the meanwhile, it seems that the proceedings went on under new Chapter XX-C of the Act but the order was passed by respondent No. 2 on January 23, 1987, under sub-section (1) of section 269UD of the Income-tax Act and it was decided to purchase the property by the Central Government for an amount equal to the apparent consideration for the transfer of the said property. On February 4, 1987, another letter was received from respondent No. 2, inter alia, demanding possession of the aforesaid property to be surrendered and delivered to respondent No. 2. An order under section 269UD(1) of the Income-tax Act was passed in respect of the aforesaid property. On February 6, 1987, this writ petition was filed and on the first date of hearing, i.e., on February 8, 1987, stay of the operation of the order dated January 23, 1987, under section 269UD of the Act was passed and the petitioner was also directed to maintain status quo in respect of the property. The main contention of Mr. Amit Chadha, learned counsel for the petitioner, canvassed before me is that the provision of Chapter XX-C which came into force on October 1, 1986, could not be made retrosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue under Chapter XX-A, the provision of Chapter XX-C will not be applicable. The object for incorporating Chapters XX-A and XX-C are the same and in this connection learned counsel for the petitioner has placed reliance on Rambai Manjanath Nayak v. Union of India [1993] 201 ITR 422 (SC). The relevant portion from the above authority is as under : "The Government of India appointed the, Direct Taxes Inquiry Committee under the chairmanship of justice K. N. Wanchoo, former Chief justice of India, in 1970 to recommend concrete and effective measures, inter alia, to unearth black money and prevent its proliferation through further evasion ; to check avoidance of tax through various legal devices, including the formation of trusts and to reduce tax arrears. Pursuant to some recommendations of the Committee, the Taxation Laws (Amendment) Act, 1972, was enacted incorporating those suggestions whereby Chapter XX-A was inserted in the Act with effect from November 15, 1972. The Statement of Objects and Reasons for its enactment mentioned that it was to counter evasion of tax through understatement of the value of immovable property in sale deeds and also to check the circulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect mistakes even beyond the period of 15 days after filing of the statement in Form No. 37-I. It would appear that no thought was given to amend clause (c) of sub-rule (2) of rule 48L while inserting sub-section (4) of section 269UC of the Act. It would further appear as rightly held by the High Court that rule 48L is only directory and not mandatory." On the basis of the aforesaid observation of the Supreme Court, Mr. Chadha has contended that rule 48L is a subordinate piece of legislation and cannot operate retrospectively when the main enactment does not operate retrospectively. In support of his contention, he has cited Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar, AIR 1999 SC 3609, 3614 ; [1999] 8 SCC 16 : "This court in Hitendra Vishnu Thakur v. State of Maharashtra, AIR 1994 SC 2623 ; [1994] 4 SCC 602, has culled out the principles with regard to the ambit and scope of an amending Act and its retrospective operation as follows : "(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not hold the field retrospectively to the transfer which is complete under Chapter XX-A. In support of his contention, he has cited Captain Sanjeev Sethi v. Union of India [1992] 195 ITR 338 (Delhi). On the other hand, Mr. R. D. Jolly, learned counsel for the respondents, has contended that the petitioner has filed Form No. 37-I on November 29, 1986. He has further contended that the petitioner was obliged to file Form No. 37-I under the relevant rules particularly rule 48L of the Income-tax Rules as it stood after the 1st day of October, 1986. He has contended that as per the declaration made by the petitioner in Form No. 37-I, property was still in the possession of respondent No. 4 and, therefore, there was no transfer within the meaning of the definition of the word "transfer" under the Act. Mr. jolly has contended that in terms of section 269UC, the transfer under the Act is contemplated "notwithstanding anything contained in the Transfer of Property Act", except in terms of section 269UC of the Act. Sub-section (3) of section 269UC of the Act, inter alia, lays down as follows : "(3) Every statement referred to in sub-section (2) shall, (i) be in the prescribed form ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y learned counsel for both the parties. Having regard to the agreement entered into between the parties on January 1, 1983, the fact that the petitioner applied under Chapter XX-A and filed Form No. 37EE, the petitioner specifically mentioned that the possession of the property has been transferred in favour of the petitioner by respondent No. 4, acquisition proceedings having been initiated on October 10, 1983, under Chapter XX-A of the Act, valuation report having been filed on October 24, 1983, are certain facts which are not disputed. Reliance has been placed by the Revenue on filing of Form No. 37-I by the petitioner pursuant to coming into force of Chapter XX-C of the Act and the statement made therein that the property has not yet been transferred in favour of the petitioner. In Form No. 37EE under section 269AB(2) of the Income-tax Act under column (8), the name of the petitioner was mentioned as "occupier of the property". The covering letter by which Form No. 37-I was filed, agreement for sale dated January 1, 1983, was enclosed and this is how the petitioner wrote by a registered acknowledgment due letter on November 19, 1986, to the appropriate authority while submittin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for determination is whether the transfer for the purpose of Chapter XX-A of the Act and Chapter XX-C of the Act took place prior to October 1, 1986 or thereafter. From what have been stated above, there cannot be any doubt that the possession, of the property has been handed over to the petitioner and he has been in enjoyment of the same. The agreement created a right in favour of the petitioner to enjoy the property. Even assuming that there was only part performance of the contract, the said part performance was clearly one falling within section 53A of the Transfer of Property Act. In the circumstances, the petitioner came squarely within the provision of section 269AB of Chapter XX-A of the Act. In Sunshine Travels and Tours Pvt. Ltd. v. Union of India [1995] 213 ITR 749 (Delhi), it was observed : "In both the writ petitions on the facts, we are of the view that the agreements in question have enabled the vendees to enjoy the respective properties or at any rate they have enabled the vendees to enjoy certain rights with respect to the properties in question and those rights are deemed to be immovable properties both under Chapters XX-A and XX-C." Section 269A(e) defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r other kinds of transactions out of which, one transaction is a transaction whereby a person acquires any right with respect to a building to be constructed. This right with respect to a building to be constructed, is also 'immovable property', as this right is referred to in the definition of the said term in section 269A(e)(ii). For the sake of convenience, we have limited the reference to the words in section 269AB(1)(b) to the extent of their relevance to the facts before us. Therefore, if under a transaction (other than the transactions referred in the words bracketed) a person acquires any right with respect to a building to be constructed, that right is to be considered on par with the right created by an agreement covered by section 53A of the Transfer of Property Act, because section 269AB(1)(a) ropes in transactions to which section 53A of the Transfer of Property Act applies ... The difficulty of understanding the concept of 'transfer' as defined in section 269A(h), is the difficulty due to the abstract rights covered by the statutory definitions. If the scope of Chapter XX-A becomes clear and a transaction falls within its net, no argument is needed to conclude that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said rule will apply only if Chapter XX-C applies. For the view that we have taken, on the facts of the present case, Chapter XX-C does not apply. Therefore, the question of the said rule becoming applicable does not arise ... Lastly, the said rule 48L has no retrospective operation and would not apply to an agreement entered into prior to October 1, 1986, specially to such cases where the provisions of Chapter XX-A were applicable like in the present case." The special leave petition filed against the decision of Captain Sanjeev Sethi's case [1992] 195 ITR 338 (Delhi) was also dismissed by the Supreme Court on August 23, 1993. No doubt dismissal of special leave petition will not always operate as a binding principle affirming the ratio of the decision of the High Court, but it is important to note that by that time the Supreme Court had decided C. B. Gautam's case [1993] 199 ITR 530 on November 17 and 27, 1992. On the very day judgment in C. B. Gautam's case [1993] 199 ITR 530 (SC) was rendered, the Supreme Court pronounced a decision in Rambai Manjanath Nayak v. Union of India [1993] 201 ITR 422. While considering the scope of Chapter XX-A, the court made the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession of the immovable property was retained by the petitioner and thereby the petitioner acquired the right within the meaning of Chapter XX-A of the Act. Creation of any right enabling the petitioner to take the possession for enjoyment of the property would attract the application of Chapter XX-A just like any other transfer. The court also takes note of dropping of the proceedings vide letter dated June 22, 1989, under section 269D of Chapter XX-A of the Act. Even as per the guidelines issued by respondent No. 3 the case of the petitioner would not fall within the mischief of Chapter XX-C. Respondent No. 3-Central Board of Direct Taxes vide its Circular No. F-316/134/86-OT, dated December 19, 1986, laid down the guidelines to the following effect : "For the purpose of the application of the new Chapter XX-C, what is material is not the date of the agreement. Even if an agreement has been entered into prior to October 1, 1986, the provisions of the new Chapter would apply if the transfer of immovable property sought to be made by such an agreement is to be effected with effect from October 1, 1986. The expression of the term transfer in section 269UA(f) is of wide c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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