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Issues: (i) Whether, on receipt of a statement in Form No. 37-I under section 269UC(3), the appropriate authority could reject the statement as not maintainable instead of either ordering purchase under section 269UD or issuing a no objection certificate under section 269UL(3); (ii) Whether handing over possession under the agreement amounted to a transfer in violation of section 269UL(2); (iii) Whether the alleged failure to file a rectified Form No. 37-I justified rejection of the application.
Issue (i): Whether, on receipt of a statement in Form No. 37-I under section 269UC(3), the appropriate authority could reject the statement as not maintainable instead of either ordering purchase under section 269UD or issuing a no objection certificate under section 269UL(3).
Analysis: Chapter XX-C confers only a pre-emptive right of purchase on the appropriate authority. Section 269UD authorises only an order for purchase by the Central Government, and if no such order is made within the prescribed time, section 269UL(3) makes issuance of a no objection certificate obligatory. The scheme does not empower the authority to adjudge the underlying transaction as invalid or to create a third option of treating the statement as non-maintainable. The penal and protective provisions in sections 269UE and 276AB reinforce that the statute contemplates either purchase or no objection, not rejection of the statement on that ground.
Conclusion: The authority had no jurisdiction to reject Form No. 37-I as not maintainable; it was bound either to purchase the property or to issue the no objection certificate.
Issue (ii): Whether handing over possession under the agreement amounted to a transfer in violation of section 269UL(2).
Analysis: The agreement expressly made transfer subject to permission from the income-tax authorities. The possession delivered under the agreement was therefore conditional and permissive, not possession in part performance within the meaning of section 53A of the Transfer of Property Act, 1882. On that footing, the handing over of possession did not itself amount to a completed transfer so as to defeat the statutory mechanism under Chapter XX-C.
Conclusion: The handing over of possession did not constitute a transfer in violation of section 269UL(2).
Issue (iii): Whether the alleged failure to file a rectified Form No. 37-I justified rejection of the application.
Analysis: The record showed that defects were pointed out and a response was furnished explaining why a fresh rectified form was unnecessary. The impugned order did not disclose any sustainable basis for treating the application as defective on this score, and the Revenue did not justify that finding.
Conclusion: The alleged non-filing of a rectified Form No. 37-I did not justify rejection of the application.
Final Conclusion: The impugned order could not stand on any of the reasons recorded, and the matter required fresh disposal in accordance with law.
Ratio Decidendi: Under Chapter XX-C of the Income-tax Act, 1961, the appropriate authority, on receipt of a valid statement in Form No. 37-I, can only exercise the statutory choice of pre-emptive purchase or grant of no objection certificate, and cannot reject the statement as non-maintainable on grounds extraneous to that scheme.
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