No objection certificate under Chapter XXC cannot be withheld on extraneous statutory grounds after refusal to acquire property.

Under Chapter XXC of the Income-tax Act, the appropriate authority, after considering a transfer statement, must either pre-emptively purchase the property or decline purchase and issue the no objection certificate. It cannot withhold the certificate on the basis of alleged violations under another statute once it has decided not to acquire the property. Such extraneous issues may affect the acquisition decision, but the certificate does not validate any transaction contrary to other laws or grant immunity from action under them. The refusal to issue the certificate on that ground was held unsustainable and the matter was remitted for fresh consideration.

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Issues: Whether the appropriate authority could refuse to issue a no objection certificate on the ground that the property was alleged to be in excess of the ceiling limit under another statute, after deciding not to acquire the property under Chapter XXC of the Income-tax Act, 1961.

Analysis: The authority's role under Chapter XXC is confined to either acquiring the property or declining to acquire it and issuing the no objection certificate. Once it decides not to purchase the property, it cannot continue to restrain the transfer by withholding the certificate on considerations arising under another enactment. Alleged violations of other laws may be relevant only to the decision whether to acquire, and the certificate does not validate any transaction contrary to other statutes or grant immunity from action under them.

Conclusion: The refusal to issue the no objection certificate on the stated ground was not sustainable in law and was liable to be set aside.

Final Conclusion: The matter was sent back for fresh consideration in accordance with the governing scheme, and if no acquisition is made on reconsideration, the no objection certificate must be issued.

Ratio Decidendi: Under Chapter XXC, the appropriate authority has only two courses open after considering a transfer statement: to pre-emptively purchase the property or to decline purchase and issue the no objection certificate; it cannot withhold the certificate on grounds extraneous to that statutory scheme.

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