Premature service of acquisition notice before Gazette publication vitiates proceedings under Chapter XX-A

Premature service of notice on the transferor or transferee before publication in the Official Gazette under Chapter XX-A of the Income-tax Act, 1961 was treated as a defect going to the root of the acquisition process. Applying its earlier ruling on the same question, the Punjab and Haryana High Court held that such service was not a mere irregularity and vitiated the subsequent acquisition order. The acquisition proceedings were therefore held unsustainable.

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Issues: Whether service of notice on the transferor or transferee before publication of the notice in the Official Gazette invalidated the acquisition proceedings under Chapter XX-A of the Income-tax Act, 1961.

Analysis: The notice had been served on the parties before the statutory publication in the Official Gazette. The Court applied its earlier ruling on the same legal question and held that such premature service was not a mere irregularity but went to the root of the proceedings, thereby vitiating the subsequent acquisition order.

Conclusion: The acquisition proceedings stood vitiated and the challenge to the Tribunal's order failed.

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