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of <h1>Court allows appeal, upholds nullity of agreement under Urban Land Ceiling Act.</h1> The court allowed the appeal, setting aside the order dated April 3, 1996, and dismissing the writ petition. It held that the appropriate authority's ... Appropriate Authority, Immovable Property By Central Government, Law Applicable, Movable Property, Supreme Court, Taxing Statutes Issues Involved:1. Applicability and scope of sub-section (4) of section 269UC of the Income-tax Act, 1961.2. Validity of the order of the appropriate authority.Detailed Analysis:Issue 1: Applicability and Scope of Sub-section (4) of Section 269UC of the Income-tax Act, 1961Sub-section (4) of section 269UC was introduced by the Finance Act, 1995, effective from July 1, 1995. The object of this provision is to address defective statements furnished to the appropriate authority. The relevant portion states: 'The appropriate authority may intimate the defect to the party concerned and give them an opportunity to rectify the defect within fifteen days of such intimation... Where the defect is not rectified, it will be considered as if the statement was never furnished.'The court noted that the amendment was introduced to provide a third alternative to the appropriate authority, apart from issuing a no objection certificate or making a pre-emptive purchase. The amendment was necessary due to judicial interpretations that limited the authority's options to only two.The court emphasized that sub-section (4) of section 269UC applies to both formal defects and defects that go to the root of the transaction. The court stated, 'If the transaction is impermissible in law, it is unenforceable. Such a transaction cannot form a basis for filing the statement under sub-section (2) of section 269UC of the Act.'Issue 2: Validity of the Order of the Appropriate AuthorityThe appropriate authority had issued a communication dated December 11, 1995, indicating that the agreement to transfer the property was null and void due to the prohibition under section 6 of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978. The relevant section states: 'No person holding vacant land in excess of the ceiling limit... shall transfer any such land... until he has furnished a statement under section 7 and a notification regarding the excess vacant land... has been published... and any such transfer made in contravention of this provision shall be deemed to be null and void.'The court held that the agreement of sale entered into during the pendency of proceedings under the Urban Land Ceiling Act is void. The appropriate authority's decision to lodge the application and instruct the parties to file a fresh application was justified. The court stated, 'The appropriate authority is a statutory authority. It exercises the power under Chapter XX-C of the Act. Invalidity of an agreement of sale makes the whole transaction unenforceable.'The court also considered the precedents and legislative intent behind the relevant provisions. It concluded that the appropriate authority could not be compelled to act upon an invalid and unenforceable agreement.Conclusion:The court allowed the appeal, set aside the order dated April 3, 1996, passed in Writ Petition No. 17773 of 1995, and dismissed the writ petition. The court held that the appropriate authority was justified in its actions and that the decision did not call for interference. The judgment clarified the scope and applicability of sub-section (4) of section 269UC, affirming that it includes both formal and substantive defects in the transaction.
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