Court invalidates tax acquisition orders due to government's failure to pay owners on time. Property returns to rightful owners.

The Court set aside the Appropriate Authority's orders under Section 269UD(1) of the Income Tax Act, 1961, due to the Central Government's failure to tender the consideration amount to the owners within the prescribed time. The non-compliance led to the automatic abrogation of the acquisition orders, resulting in the property revesting in the original owners. The Court found the orders to be flawed and lacking proper consideration, ultimately ruling in favor of the petitioners and returning the property to its rightful owners.

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Issues Involved:
1. Validity of the orders passed by the Appropriate Authority under Section 269UD(1) of the Income Tax Act, 1961.
2. Determination of the fair market value and apparent consideration of the property.
3. Compliance with the statutory requirement of tendering the amount of consideration.
4. The impact of failure to tender the consideration on the validity of the acquisition order.
5. Revesting of the property to the original owners due to non-compliance with statutory provisions.

Issue-wise Detailed Analysis:

1. Validity of the Orders Passed by the Appropriate Authority:
The petitions challenge two orders dated 23rd October 2009, passed by the Appropriate Authority, Mumbai, under Section 269UD(1) of the Income Tax Act, 1961. The orders held that the difference between the fair market value and apparent consideration of the property was more than 15%, making it a fit case for preemptive purchase by the Central Government.

2. Determination of the Fair Market Value and Apparent Consideration:
The Appropriate Authority issued show cause notices alleging significant undervaluation of the property. The valuation report calculated the rate per sq. ft. FSI as Rs. 932 for Pandharinath and Rs. 929 for Dattaram. The petitioners argued that the Appropriate Authority should have considered the market value of the flats to be provided under the agreements, not just the construction cost. The Division Bench previously noted inconsistencies in the valuation and apparent consideration, leading to the remand of the matter for fresh hearing.

3. Compliance with the Statutory Requirement of Tendering the Amount of Consideration:
The Central Government failed to tender the consideration amount to the owners within the stipulated time. Instead, the amount was deposited in the P.D. Account of the Appropriate Authority. According to Section 269UG(1), the consideration must be tendered to the entitled persons within one month from the date of vesting of the property in the Central Government.

4. The Impact of Failure to Tender the Consideration on the Validity of the Acquisition Order:
The Court found that the deposit made by the Central Government in the P.D. Account was not in accordance with law. The Appropriate Authority's decision to condition the tender of payment on the owners handing over possession was impermissible. The failure to tender the amount as required by Section 269UG(1) resulted in the automatic abrogation of the acquisition order under Section 269UH, causing the property to revest in the original owners.

5. Revesting of the Property to the Original Owners Due to Non-compliance:
The Court concluded that the impugned orders were perverse and suffered from non-application of mind. The Central Government's failure to tender the consideration amount within the prescribed period led to the abrogation of the acquisition orders and revesting of the property in the owners.

Conclusion:
The petitions were allowed, and the orders of the Appropriate Authority dated 23rd October 2009 were set aside. The property stood revested in the original owners due to the Central Government's failure to comply with the statutory requirements of tendering the consideration amount.

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