Court invalidates Authority's jurisdiction over sale, upholds coparcener's right.

The court held that the Appropriate Authority exceeded its jurisdiction by examining the title and purpose of the sale. It failed to issue a no objection certificate within the stipulated time, as mandated by law. The sale agreement was deemed valid during the partition suit, affirming the undivided coparcener's right to sell. The court found the Authority's order inadequate and directed the issuance of a no objection certificate. Consequently, the court quashed the order and allowed the writ petition.

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Issues Involved:
1. Competency of the Appropriate Authority to examine the title and purpose of the sale.
2. Obligation of the Appropriate Authority to issue a no objection certificate after the expiry of the stipulated period.
3. Legality of the sale agreement during the pendency of a partition suit.
4. Right of an undivided coparcener to sell his share.
5. Adequacy of the Appropriate Authority's order and its compliance with statutory provisions.

Detailed Analysis:

1. Competency of the Appropriate Authority to Examine Title and Purpose of Sale:
The petitioners argued that the Appropriate Authority has no right to examine the title of the parties or the purpose of the sale. The court referenced earlier decisions, including those by the Supreme Court, establishing that the Appropriate Authority's power is limited to either ordering the purchase of the property by the Central Government or issuing a no objection certificate. It was emphasized that the Appropriate Authority cannot reject a statement based on the legality or purpose of the transaction.

2. Obligation to Issue a No Objection Certificate After Expiry of Stipulated Period:
The court held that if the Appropriate Authority does not pass an order for purchase within the stipulated period, it must issue a no objection certificate as per Section 269UL(3) of the Income-tax Act, 1961. This principle was reinforced by the Delhi High Court in Tanvi Trading and Credits P. Ltd. v. Appropriate Authority and upheld by the Supreme Court. The court emphasized that the Appropriate Authority failed to exercise its jurisdiction within the prescribed time, thus mandating the issuance of a no objection certificate.

3. Legality of Sale Agreement During Pendency of Partition Suit:
The Appropriate Authority argued that the sale agreement was premature due to the pendency of a partition suit. However, the court found no legal basis for this view, stating that an undivided coparcener can sell his share even during the pendency of a partition suit. The court referenced decisions such as K. V. Kishore v. Appropriate Authority and R. Lokeswari v. State of Tamil Nadu, which support the right of an undivided coparcener to sell his share.

4. Right of an Undivided Coparcener to Sell His Share:
The court reiterated that an undivided coparcener has the right to sell his share without the consent of other coparceners. This principle was supported by previous judgments, which clarified that there is no legal impediment for a coparcener to convey his undivided share individually.

5. Adequacy of the Appropriate Authority's Order:
The court found the order passed by the Appropriate Authority to be inadequate and not in compliance with Section 269UD(1) of the Income-tax Act. The order was deemed a perfunctory exercise of power and not a valid or effective order within the meaning of the Act. Consequently, the court quashed the order and directed the Appropriate Authority to issue a no objection certificate within four weeks.

Conclusion:
The court concluded that the Appropriate Authority acted beyond its jurisdiction by examining the title and purpose of the sale and failed to exercise its power within the stipulated time. The sale agreement was not premature despite the pendency of the partition suit, and the undivided coparcener had the right to sell his share. The order passed by the Appropriate Authority was inadequate, leading to the quashing of the order and a directive to issue a no objection certificate. The writ petition was allowed accordingly.

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