CBDT beneficial circular barred pending acquisition proceedings where apparent property consideration was below the prescribed threshold.

A beneficial CBDT circular directing discontinuance of acquisition proceedings under Chapter XX-A applied to pending appeals where the apparent consideration of the immovable property was below the prescribed threshold. Because the sale deeds showed consideration below five lakhs and earlier decisions had treated the circular as binding at the appellate stage, the acquisition could not be sustained. The Tribunal's order was therefore left undisturbed, and the Revenue's challenge failed with dismissal of the appeals.

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Issues: Whether the acquisition proceedings under Chapter XX-A of the Income-tax Act, 1961 could be sustained in appeal despite the Central Board of Direct Taxes circular directing drop of proceedings where the apparent consideration of the immovable property was below five lakhs, and whether the Tribunal's order was liable to be interfered with.

Analysis: The property was the subject of acquisition proceedings initiated on notice under section 269D of the Income-tax Act, 1961. The apparent consideration reflected in the sale deeds was far below five lakhs. In the light of the binding circular dated 16 May 1996 and the earlier decisions holding that the circular applied even to proceedings pending at the appellate stage, the acquisition could not be sustained.

Conclusion: The circular applied to the pending appeals and the acquisition proceedings were not maintainable. The appeals were dismissed.

Final Conclusion: The Tribunal's order was left undisturbed and the Revenue's challenge failed, resulting in dismissal of the appeals in favour of the transferees.

Ratio Decidendi: A beneficial circular of the Central Board of Direct Taxes directing discontinuance of acquisition proceedings applies to pending appeals where the apparent consideration of the immovable property is below the prescribed threshold.

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