Court revokes order for compulsory property purchase due to failure to tender specified amount to transferee

The court allowed the petition challenging the order under section 269UD of the Income-tax Act for compulsory purchase of property. It was found that the amount specified in the agreement was not tendered to the transferee as required, and the Revenue failed to demonstrate compliance with the agreement. As a result, the property revested in the transferor, and the order under section 269UD(1) was deemed abrogated. The court emphasized the importance of adhering to the provisions of the Income-tax Act for compulsory purchase of property, particularly regarding tendering the amount to the transferee as per the agreement.

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Issues:
Challenge to order under section 269UD of the Income-tax Act for compulsory purchase of property due to non-tendering of amount to transferee as per agreement to sell.

Analysis:
The petitioner entered into an agreement to purchase a property in New Delhi, and the Revenue invoked Chapter XXC of the Income-tax Act for compulsory purchase, issuing an order under section 269UD for an apparent consideration of Rs. 25 lakhs. The petitioner challenged this order on the grounds that the amount specified in the agreement under section 269UF was not tendered in time to the petitioner. The Revenue intended to make the payment to the transferor only, not to the transferee, as evidenced by correspondence and actions. The vendor had received a partial payment, and the remaining sum was to be paid at the time of registration of the conveyance deed. There was no dispute regarding the payment between the buyer, seller, or any third party. The court referred to previous judgments to analyze the situation, emphasizing the importance of tendering the amount to the transferee as per the agreement to sell.

Further Analysis:
During the proceedings, the respondent-Union of India could not demonstrate that the amount was tendered to the transferee or any action was taken to indicate the Department's willingness to make the payment to the transferee as per the agreement. Following the decision of the Division Bench of the court, it was concluded that section 269UH would be applicable in this case, leading to the property revesting in the transferor as the order made under section 269UD(1) stood abrogated. Considering the provisions of sections 269UF and 269UG, the court allowed the petition accordingly, highlighting the significance of adhering to the requirements set forth in the Income-tax Act for compulsory purchase of property.

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