Court quashes compulsory purchase order under Income-tax Act, citing natural justice violation and flawed property value comparison.

The High Court of BOMBAY allowed the petition challenging a compulsory purchase order under Chapter XX-C of the Income-tax Act, 1961. The court found a violation of natural justice principles and inadequate comparison of property values in the order. The lack of discussion on the merits of compared flats rendered the decision flawed. Despite the Union of India proposing a rehearing, the court deemed it unnecessary due to the prolonged duration since the original order. Consequently, the court quashed the compulsory purchase order, directed the issuance of a No Objection Certificate (NOC) in favor of the petitioners, and ruled in favor of the petitioners with no costs imposed.

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Issues Involved: Challenge to compulsory purchase order u/s Chapter XX-C of Income-tax Act, 1961 based on violation of principles of natural justice and inadequate comparison of property value.

Summary:
The High Court of BOMBAY delivered a judgment in a case challenging a compulsory purchase order u/s Chapter XX-C of the Income-tax Act, 1961. The petitioners owned a flat and entered into an agreement of sale with a respondent. The appropriate authority issued a notice to show cause for compulsory acquisition, relying on five sale instances without providing prior information to the petitioners. The petitioners challenged the order, citing a violation of natural justice principles and inadequate comparison of property values. The court noted that the order lacked discussion on the merits and characteristics of the compared flats, leading to serious infirmity in the decision. The Union of India attempted to defend the order, suggesting a rehearing, but the court deemed it unnecessary due to the prolonged duration since the original order. The court allowed the petition, quashing the compulsory purchase order and directing the issuance of a No Objection Certificate (NOC) in favor of the petitioners. The ruling was made absolute with no costs imposed.

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