Charity Commissioner approval required before Chapter XXC pre-emptive purchase can operate on public trust property transfer statements.

A transfer statement in Form No. 37-I under section 269UC could not be treated as valid for a sale of public trust property until prior sanction of the Charity Commissioner was obtained under section 36 of the Bombay Public Trusts Act, 1950. Because such sanction was a condition for a legally effective sale, the agreement was not capable of being acted upon for Chapter XXC purposes before approval. The pre-emptive purchase mechanism under section 269UD therefore could not be triggered on an unapproved trust-property transaction. The legal effect was that section 269UC operated only after Charity Commissioner approval was secured.

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Issues: Whether a statement in Form No. 37-I under section 269UC of the Income-tax Act, 1961 could be treated as valid, and the pre-emptive purchase mechanism under Chapter XXC could be triggered, before the required sanction of the Charity Commissioner was obtained for the sale of public trust property under section 36 of the Bombay Public Trusts Act, 1950.

Analysis: The agreement related to immovable property belonging to a public trust, and section 36 of the Bombay Public Trusts Act, 1950 made such a sale ineffective without prior sanction of the Charity Commissioner. Section 269UC of the Income-tax Act, 1961 operates only when a sale is intended to take place and the transfer statement is filed in respect of an agreement capable of being acted upon. Since the trust property could not validly be sold without the Charity Commissioner's approval, the agreement could not be acted upon by the income-tax authorities until that approval was granted. The purpose of Chapter XXC, including section 269UD of the Income-tax Act, 1961, was also to be applied consistently with the statutory protection afforded to trust property.

Conclusion: The form was invalid before Charity Commissioner approval, and section 269UC could operate only after such approval was granted; the challenge failed.

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