Chapter XX-C limits the authority to purchase or no-objection certificate; a three-year lease did not amount to transfer.
Chapter XX-C confines the appropriate authority to two statutory courses: issue a no-objection certificate or make a pre-emptive purchase order under section 269UD. It cannot reject a validly filed Form No. 37-I as non est on the ground that the transaction is invalid or the form is not maintainable, and doing so exceeds its jurisdiction. A separate three-year lease arrangement with possession does not amount to a transfer within section 269UA(f), which covers sale, exchange, or a lease of not less than twelve years. The impugned order was quashed and the authority was directed to issue the no-objection certificate.
Issues: Whether, on submission of Form No. 37-I under Chapter XX-C of the Income-tax Act, 1961, the appropriate authority had power to treat the statement as non est and refuse to act upon it, and whether the handing over of possession under a three-year lease arrangement amounted to a "transfer" within section 269UA(f).
Analysis: The statutory scheme of Chapter XX-C confines the appropriate authority to two courses only: either to issue a no-objection certificate or to make an order of pre-emptive purchase under section 269UD. It has no jurisdiction to reject the statement in Form No. 37-I on the ground that the transaction is invalid or that the form is not maintainable. Section 269UA(f) covers a transfer by sale, exchange, or a lease of not less than twelve years, and possession taken under a separate lease for three years does not fall within that definition. The vendor and vendee's possession arrangement was referable to the lease agreement and not to part performance of the sale agreement. The authority therefore misconstrued its jurisdiction and acted beyond the powers conferred by the statute.
Conclusion: The authority could not lawfully treat Form No. 37-I as non est or decline to act on it on the basis adopted by it, and the alleged prior transfer did not attract section 269UA(f) so as to invalidate the statement.
Final Conclusion: The impugned order was quashed, the appeal was allowed, and the appropriate authority was directed to issue the no-objection certificate.
Ratio Decidendi: Under Chapter XX-C, the appropriate authority has only the statutory options of pre-emptive purchase or issuance of a no-objection certificate, and it cannot refuse to act on a validly filed statement by declaring it invalid or non est.
TaxTMI 
AI Drafter ✕
TaxTMI 
