Premature acquisition notice where property title was still under challenge was unsustainable.

A notice initiating acquisition proceedings under section 269D(1) of the Income-tax Act was treated as premature because the vendor's title to the property had not yet been finally settled. The petitioner's title depended on the outcome of pending proceedings to set aside the sale under Order 21, Rule 97 of the Code of Civil Procedure, so the existence of a perfected title remained under adjudication when the notice was issued. Acquisition proceedings founded on an established title cannot proceed before that title becomes definite. The notice was therefore unsustainable, and relief was granted to the petitioner.

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Issues: Whether a notice initiating acquisition proceedings under section 269D(1) of the Income-tax Act, 1961 was premature where the vendor's title to the property was still under challenge in pending proceedings.

Analysis: The title of the petitioner depended upon the outcome of the pending application for setting aside the sale under Order 21, Rule 97 of the Code of Civil Procedure, 1908. Since the vendor's perfect title had not yet been finally established on the date of the impugned notice, the proposed acquisition proceedings were initiated before the title position was settled.

Conclusion: The notice under section 269D(1) was premature and unsustainable, and the relief was granted in favour of the petitioner.

Ratio Decidendi: Acquisition proceedings founded on the existence of a perfected title cannot be sustained when the title is still pending adjudication and has not yet become definite.

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