High Court upholds Income Tax Act acquisition, dismisses challenge to Section 269-J(1) constitutional validity.

The High Court upheld the acquisition proceedings under Chapter XX-A of the Income Tax Act, 1961, and rejected the challenge to the constitutional validity of Section 269-J(1) raised by the petitioner society. The court emphasized that the petitioner had ample opportunities to challenge the provisions earlier but failed to do so, leading to the dismissal of the writ petition without addressing the constitutional issues raised.

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Issues:
Challenge to acquisition proceedings under Chapter XX-A of the Income Tax Act, 1961 and constitutional validity of Section 269-J(1) of the Act.

Analysis:
The case involved the transfer of a chunk of land by a company to a cooperative society, which was later subjected to acquisition proceedings under Chapter XX-A of the Income Tax Act, 1961. The Departmental Valuation Officer determined the market value of the property to be significantly higher than the consideration mentioned in the sale deed. The competent authority ordered the acquisition of the property after considering the discrepancies in the valuation and the stated consideration. The petitioner society challenged this order through various legal avenues, including appeals before the Income Tax Appellate Tribunal, the High Court, and the Supreme Court, all of which were dismissed. Subsequently, the society was asked to hand over possession of the property and receive compensation under Section 269-J of the Act, but it raised objections regarding the division of the land into plots allotted to its members. Despite being asked to draw compensation, the society did not take any action.

The petitioner then filed a writ petition seeking reassessment of compensation and interest. However, the petition was dismissed with liberty to avail appropriate remedy. Subsequently, the society claimed that the penalty imposed by the Income Tax Department was unjust considering the value of the property. The petitioner further challenged the constitutional validity of Section 269-J(1) of the Act, arguing that it conflicted with Section 269-J(4) and imposed penalties beyond legal limits, leading to unjust enrichment.

The High Court, in its judgment, noted that the petitioner had participated in the proceedings under Chapter XX-A of the Act since 1985, raising objections and receiving the final order in 2002 without challenging the validity of the provisions at that time. The court emphasized that the petitioner had multiple opportunities to challenge the provisions but failed to do so. Therefore, the court held that it was not open for the petitioner to question the validity of the provision at this stage, especially after exhausting other legal remedies without raising this specific issue. Consequently, the court dismissed the writ petition without delving into the merits of the constitutional challenge raised by the petitioner regarding Section 269-J(1) of the Act.

In conclusion, the judgment upheld the acquisition proceedings under Chapter XX-A of the Income Tax Act, 1961 and rejected the challenge to the constitutional validity of Section 269-J(1) raised by the petitioner society, citing the petitioner's failure to raise the issue at the appropriate stages of the legal process.

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