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TMI Blog1998 (10) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... at would arise under the Land Ceiling Act. Keeping all these in mind, the value of the property has been fixed at Rs. 32,20,000 which represents the fair market value. The first respondent issued a notice dated July 10, 1986, calling upon the petitioner to produce certain documents relating to the purchase of the property. The petitioner was served with another letter from the District Valuation Officer, Income-tax Department, Madras-6, on July 2, 1986. The District Valuation Officer requested the petitioner to furnish certain documents to him on or before July 14, 1986, on the ground that the first respondent had requested him to value the property. The petitioner furnished the documents to the District Valuation Officer. After receipt of the papers, the District Valuation Officer sent a communication to the petitioner that he would inspect the property on November 5, 1986. But, however, the inspection was not carried out. The reason for not carrying out the inspection on November 5, 1986 was communicated to the petitioner by letter dated November 27, 1986, which was received by the petitioner on November 29, 1986. The petitioner was directed to appear before the District Valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond the period of limitation, the competent authority has no power or jurisdiction to proceed with the acquisition of the property. Moreover, the competent authority must give valid reason to proceed with the acquisition. The impugned proceedings do not contain any valid reason and hence the same is illegal. The notice under section 269C does not reveal the basis for the opinion of the competent authority and hence it cannot be said that the competent authority has formed the opinion on the basis of any material available on record. If no material is available, then the opinion of the competent authority is without any basis. It is stated that the inspector of the Income-tax Department has valued the property at Rs. 61.66 lakhs whereas the District Valuation Officer has valued the property at Rs. 41.83 lakhs. When two different valuations are available, the authorities ought to have resorted to the third opinion with regard to the value of the property and ought not to have proceeded on the basis of the value given by the District Valuation Officer. The competent authority has failed to consider that the sale consideration is much more than the guideline value fixed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon by the respondents. The District Valuation Officer had arrived at the value at Rs. 41.83 lakhs as against Rs. 32.20 lakhs shown as consideration in the sale deed and thus the value in the sale deed is less by nearly 30 per cent. and hence the acquisition proceedings are perfectly valid. The various disadvantages stated by the petitioner in the affidavit filed in support of this writ petition-for claiming that the value arrived at by the District Valuation Officer is not correct, have all been taken into account and considered by the District Valuation Officer in arriving at the market value fixed by him. The report of the District Valuation Officer gives the entire details on which he arrived at the fair market value of the property. The petitioners had been given sufficient opportunity for presenting their case. The District Valuation Officer made the inspection of the property on December 4, 1986, after due notice to the petitioner and in the presence of the representative of the petitioner. The conclusion arrived at by the District Valuation Officer that the value of the property is Rs. 41.83 lakhs, as against the value of Rs. 32.20 lakhs shown as consideration in the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary to consider the same before going into the merits. Section 269G provides an appeal to the Appellate Tribunal against the order for the acquisition of any immovable property by the competent authority under section 269F. Section 269G of the Income-tax Act reads as follows : "269G. Appeal against order for acquisition.---(1) An appeal may be preferred to the Appellate Tribunal against the order for the acquisition of any immovable property made by the competent authority under section 269F,--- (a) by the transferor or the transferee or any other person referred to in sub-section (8) of that section, within a period of forty-five days from the date of such order or a period of thirty days from the date of service of a copy of the order on such person under the said sub-section, whichever period expires later; (b) by any other person interested in such immovable property, within forty-five days from the date of such order : Provided that the Appellate Tribunal may, on an application made in this behalf before the expiry of the said period of forty-five days or, as the case may be, thirty days, permit, by order, the appeal to be presented within such further period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver period expires later. Sub-clause (b) of sub-section (1) of that section gives liberty to any other person interested in such immovable property to prefer an appeal within forty five days from the date of such order. The proviso to sub-section (1) empowers the Tribunal to enlarge the period of limitation by an order on the application of the parties mentioned in sub-clauses (a) and (b) if they filed an application before the Tribunal before the expiry of the period specified in sub-clause (a) or (b). This means that the transferor or the transferee would be deprived of their right of appeal if they have not applied before the Appellate Tribunal by way of an application for extension of time for preferring such appeal before the period of 45 days or 30 days, as the case may be, expires. In this case, admittedly, the petitioner did not apply for any extension of time as contemplated under the proviso to sub-section (1). However, the petitioners preferred an appeal with a petition to condone the delay. The same was dismissed by the Tribunal on the ground that in view of the restrictions imposed in the proviso to sub-section (1), the Tribunal has no power to condone the delay, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le should be encouraged to use them. But to allow unlawful action to stand, merely because it has been appealed against on its merits, is indefensible ... Recently the case law has produced a crop of judicial statements which conflict with the rule just explained. It has been said that, where there is some right of appeal, judicial review will not be granted 'save in the most exceptional circumstances' ; and that the normal rule is that the applicant should first exhaust whatever other rights he has by way of appeal. This novel attitude, which does not appear to be based on authority, may be due to the increasing pressure of applications for judicial review, which are now so numerous. It has not, as yet, in practice led to denial of judicial review where eligible grounds for it are shown, merely because a right of appeal has not been exercised. But that may occur before long if these formidable dicta are taken at face value." From the above portion of the text, the author had expressed his view that even where the alternative remedy has (not ?) been exhausted still judicial review is possible if the order is patently illegal. In such circumstance, the question for consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oning the delay in preferring the appeal has been rejected by the Appellate Tribunal and in this writ petition the petitioner not only challenges the validity of the original order but also the validity of the proviso to section 269G(1) and hence it cannot be said that the writ petition is not maintainable. Apart from this, the conduct of the respondent in raising the preliminary objection is also to be taken note of. The respondents are very much parties to T. C. No. 420 of 1991 (Sarojini Devi (R. V.) (Smt.) v. I. A. C. of I. T. [2000] 242 ITR 329) filed by the transferor before the Division Bench. Had it been brought to the notice of the Division Bench about the pendency of this writ petition, naturally the Division Bench would have taken up the writ petition along with T. C. No. 420 of 1991 (Sarojini Devi (R. V.) (Smt.) v. I.A. C. of I. T. [2000] 242 ITR 329) and decided the issue. For the reasons best known to the parties, neither the petitioner nor the respondents, has brought to the notice of the Division Bench about the pendency of this writ petition and to have the same for disposal along with the said T. C. No. 420 of 1991 (Sarojini Devi (R. V.) (Smt.) v. IAC of I.T. [2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act preferred statutory appeals as well as writ petitions. Inspite of the fact that the appeal was pending before the appellate authority, a Division Bench of this court has entertained the writ petition on the merits and set aside the order of assessment directing the petitioner to withdraw the appeal pending before the Appellate Tribunal. In Murali Trading Co. v. Joint Commercial Tax Officer [1967] 19 STC 221 (Mad), the Division Bench has held as follows : "We, therefore, direct that the writs would issue striking down the assessments and that the detailed explanations of the assessee now supplemented by further detailed statements, should be taken up and considered, and the assessment carried through again in due compliance with the requirements of law, and the principles of natural justice. The concerned assessee is directed to withdraw the appeals pending before the Sales Tax Appellate Tribunal, in view of the allowance of the writs." In yet another judgment, reported in Ramana Reddy (N.) v. Joint Commercial Tax Officer [1971] 28 STC 683 (Mad) a single judge has followed the same principle in the following passage : "In a case where the matter was pending with the Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that no such proceedings shall be initiated in respect of any immovable property after the expiration of a period of nine months from the end of the month in which the instrument of transfer in respect of such property is registered under the Registration Act, 1908 (16 of 1908), or, as the case may be, section 269AB : Provided further that--- (a) in a case where it is determined under sub-section (4) of section 269B by the competent authority who has initiated proceedings for the acquisition of any immovable property under this Chapter or by the Board that such competent authority has no jurisdiction to initiate such proceedings, the competent authority having jurisdiction may initiate such proceedings within- (i) the period of nine months specified in the foregoing proviso ; or (ii) a period of thirty days from the date of such determination, whichever period expires later ; (b) in a case where proceedings for the acquisition of any immovable, property under this Chapter could not be initiated during any period of time by reason of any injunction or order of any court prohibiting the initiation of such proceedings or preventing the examination of documents or other ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usand rupees has been transferred by a person (hereafter in this Chapter referred to as "the transferor") to another person (hereafter in this Chapter referred to as "the transferee") for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer ; or (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act or the Wealth-tax Act, 1957 (27 of 1957), the competent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter : Provided that before initiating such proceedings, the competent authority shall record his reasons for doing so : Provided further that no such proceedings shall be initiated unless the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to file your objections, if any, to the acquisition of the said property in writing on the date of hearing. (Sd.) A. R. Reddy, The Inspecting Asst.Commissioner, Acquisition Range-II, Madras-6." The above notice though dated November 26, 1985, it requires the petitioner to appear before the first respondent on December 8, 1985, at 3 p.m. for hearing. In this notice, the first sentence reads as if the action under Chapter XX-A of the Income-tax Act has been initiated by publishing a notice under section 269D(1) of the Income-tax Act in the Government of India Gazette. Neither the copy of the Gazette was produced before this court nor in the counter affidavit of the respondent the date of the notification in the Gazette has been mentioned. When the notice under section 269D(1) had been published in the Gazette, no such notice has been served either on the transferor or on the transferee as required under section 269D(2) immediately after the publication. The notice under section 269D(1) of the said Act is dated August 6, 1986, which is as follows : "Notice under section 269D(1) of the Income-tax Act, 1961 (43 of 1961). Government of India, Office of the Inspecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gazette or a period of 30 days from the service of notice on the respective persons, whichever period expires later. (b) by any other person interested in the said immovable property, within 45 days from the date of the publication of this notice in the Official Gazette. Explanation.---The terms and expressions used herein as are defined in Chapter XX-A of the said Act, shall have the same meaning as given in that Chapter. Schedule Land and bungalow: 'Dunduan' No. 4-B (New No. 12), Nungambakkam High Road, Madras-34, Thousand Lights/Doc. No. 570 of 1985. (Sd.) A. B. Reddy, Competent Authority, Inspecting Assistant Commissioner of Income-tax, Acquisition Range-II, Dated : August 6, 1986 Madras 600 006." When the notice under section 269D(1) is dated August 6, 1986, it is not known as to how the respondent in the notice dated November 26, 1985, to the petitioner has stated that the notice under section 269D(1) of the said Act had been published in the Government of India Gazette. Further, the notices dated November 26, 1985, as well as July 10, 1986, do not reveal that the competent authority has reason to believe as required under section 269C(1) that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the statute, I am of the opinion that the entire acquisition proceedings are void. Even though the document has been registered in December, 1985, and the notice dated August 6, 1986, under section 269D(1) is within the period prescribed under the proviso to section 269D(1) still the said notice cannot be said to be valid, since at the relevant point of time the first respondent did not have any basis to entertain the reason to believe that the property is undervalued. The notice reveals that the competent authority has reason to believe that the immovable property having a fair market value exceeding Rs. 1 lakh has been transferred under the Registration Act, 1908, for a lesser consideration than the fair market value. When the competent authority expresses that he has reason to believe, then naturally there should be some basis for his reasonable belief that the property has been undervalued. From the counter affidavit it is clear that the competent authority entertained a reasonable belief only on the basis of the valuation report of the District Valuation Officer. This is clear from the following passages of the counter affidavit of the respondents : "Even on merits, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that on August 6, 1986, the date on which the notice under section 269D(1) was sent to the petitioner, the competent authority had no basis to entertain the reasonable belief. Learned counsel for the respondent further contended that S. Govindan, the inspector of the Income-tax Department was deputed to assess the value of the property who had submitted the report stating that the value of the property is Rs. 61,65,920. This report of the inspector is the basis for the competent authority to entertain the reasonable belief and hence it cannot be said that the notice under section 269D(1) is without any basis to entertain the reasonable belief. Though the impugned order dated March 11, 1988, refers to the report of the inspector of the Income-tax Department, it is not known as to on what date the said inspector had inspected the property and submitted the report. Admittedly, the petitioner was not given any notice before such inspection and the petitioner was not furnished with the copy of the report of the inspector. Paragraph 2 of the impugned order gives the reason for deputing the inspector as follows : "As this was a time-barring case, I deputed the inspector of this o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to various sections barring section 269D(1). The acquisition proceedings can be said to be initiated under section 269D(1), only after the publication of notice in the Central Government Gazette and service of such copy of notice on the transferee or the transferor. Only the notice dated August 6, 1986, served on the petitioner can be construed as a notice under section 269D(1) which is already found that the same is invalid as it was issued without any basis to entertain the reasonable belief regarding the undervaluation of the property, since the respondents have categorically admitted that the first respondent entertained the reasonable belief only from the report of the District Valuation Officer which is dated December 11, 1986. Hence, both the notices cannot be construed as the proceedings initiated under section 269D(1) of the Income-tax Act. So far as the fourth contention of counsel for the petitioner is concerned, it could be seen that the petitioner has submitted the objection stating that the property on College Road cannot be taken as the criteria or a data sale for fixing the value of the property in dispute and further the transferee is to take care of the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence before the court to the effect that the lands are similar in nature and the character of the lands dealt with in such sale deeds, and those documents could be taken into consideration for fixing the fair rent for any residential or non-residential building. If a party rests content with producing some sale deeds and if there is no material before the court, the sale deeds cannot be taken into account by the court for determining the market value. Therefore, as held by the Supreme Court in Inder Singh v. Union of India [1993] 3 SCC 240 and Periyar and Pareekanni Rubbers Ltd. v. State of Kerala [1991] 4 SCC 195, referred to supra, persons connected with the sale transactions or the attesting witnesses should be examined in order to prove the transactions as well as the factors referred to therein. The burden of proof is always on the landlord to prove in each case the market value or the site in which the building is constructed, the cost of construction of the building and the cost of provision of any one or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent." In another judgment reported in Inder Singh v. Union of India [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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