Court Invalidates Acquisition Order Due to Lack of Jurisdiction

The court held that the Competent Authority lacked jurisdiction to pass the acquisition order under Section 269F(6) of the Income-tax Act due to failure in serving the mandatory notice under Section 269D(2)(a) to the petitioner. Emphasizing the strict adherence to procedural requirements, the court invalidated the acquisition order and accompanying notice. The respondents were given the opportunity to reissue orders after fulfilling the necessary procedural steps. The writ petition was granted in favor of the petitioner with costs.

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Issues Involved:
1. Validity of the acquisition order under Section 269F(6) of the Income-tax Act.
2. Requirement of notice under Section 269D(2)(a) to the tenant.
3. Right to file objections under Section 269E of the Income-tax Act.
4. Jurisdiction of the Competent Authority to pass the acquisition order.
5. Consequences of non-compliance with procedural requirements.

Issue-wise Detailed Analysis:

1. Validity of the Acquisition Order under Section 269F(6) of the Income-tax Act:
The petitioner, a tenant in a shop located in House No. 30, Chowk, Allahabad, challenged the acquisition order dated 16th January 1976, passed by the IAC of Income-tax under Section 269F(6) of the Income-tax Act. The petitioner contended that the acquisition order was invalid as he was not served with a notice under Section 269D(2)(a) of the Act, which is a mandatory requirement before passing such an order.

2. Requirement of Notice under Section 269D(2)(a) to the Tenant:
The petitioner argued that he was not served with any notice under Section 269D(2)(a) of the Act, which mandates service of notice to the transferor, transferee, person in occupation, and any person known to be interested in the property. The respondents admitted that no individual notice was served on the petitioner but claimed that the notice was publicly proclaimed and affixed on the property, which should be deemed sufficient.

3. Right to File Objections under Section 269E of the Income-tax Act:
Section 269E of the Act confers the right to object to the acquisition on the transferor, transferee, person in occupation, and any other interested person. The petitioner contended that his right to file objections was not exhausted as he was not served with the notice under Section 269D(2)(a). The respondents argued that the petitioner's son, who looked after the business, was aware of the notice, and thus the petitioner could be deemed to have knowledge of the acquisition proceedings.

4. Jurisdiction of the Competent Authority to Pass the Acquisition Order:
The court held that the Competent Authority did not acquire jurisdiction to pass the acquisition order under Section 269F(6) without serving the mandatory notice under Section 269D(2)(a) on the petitioner. The court emphasized that the Act does not permit the Competent Authority to curtail the right of the person entitled to object and to pass orders without considering their objections.

5. Consequences of Non-compliance with Procedural Requirements:
The court observed that the procedural requirements under Chapter XX-A of the Income-tax Act are stringent and must be strictly followed. The failure to serve the notice under Section 269D(2)(a) vitiated the acquisition order. The court referred to precedents, including Mohd. Mahboob Ali Saheb v. IAC and CIT v. Prem Narain Tandon, to emphasize the mandatory nature of these provisions.

Conclusion:
The court concluded that the order dated 16th January 1976, passed by the Competent Authority under Section 269F(6), and the notice dated 19th May 1979, issued under Section 269-I(1), could not be sustained due to non-compliance with the mandatory procedural requirements. The court quashed both the acquisition order and the notice but allowed the respondents to pass appropriate orders afresh after complying with the provisions of Section 269D(2)(a) in accordance with law. The writ petition was allowed with costs.

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