Beneficial tax circular applies to pending acquisition appeals, but not to proceedings already finalised.

A beneficial administrative circular directing that pending acquisition proceedings under Chapter XX-A be dropped applies to proceedings still pending in appeal, because the term "proceedings" is not confined to the initial stage before the competent authority. The statutory scheme did not justify treating appellate matters differently from other pending matters, and there was no rational basis to limit the circular to earlier stages alone. However, proceedings that had already attained finality were not reopened in the absence of express language. On that basis, the pending acquisition appeals were covered by the circular and the acquisition order could not be sustained.

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Issues: Whether Circular No. 455 dated 16 May 1986 applied to acquisition proceedings under Chapter XX-A of the Income-tax Act, 1961 that were pending in appeal before the High Court.

Analysis: The circular directed that acquisition proceedings already initiated under section 269C would be dropped where the apparent consideration was below the prescribed monetary limit. The circular used the expression "proceedings" without restricting it to the initial stage, and the statutory scheme under Chapter XX-A did not justify confining its operation only to proceedings before the competent authority. Proceedings pending in appeal remained pending proceedings, and there was no rational basis to distinguish between cases concluded earlier and cases still awaiting final disposal. At the same time, proceedings that had already attained finality were not intended to be reopened by the circular.

Conclusion: The circular applied to the pending acquisition appeals and the acquisition order could not be sustained.

Ratio Decidendi: A beneficial administrative circular directing that pending acquisition proceedings be dropped applies not only at the initial stage but also to appeals still pending, while completed and final proceedings are not reopened unless the circular expressly so provides.

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