Supreme Court affirms Income-tax Department's property possession order

The Supreme Court upheld the validity of the Income-tax Department's order under section 269UD of the Income tax Act, 1961, affecting a property sale. An interim possession order allowed the Department to possess the property pending a writ petition, with instructions for reconveyance to the appellant if successful. The appellant was directed to maintain possession status quo and prohibited from altering the property. The original owner was permitted to withdraw Rs. 8 lakhs balance consideration, subject to executing a sale deed if the writ petition succeeded, with no entitlement to interest from the appellant.

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Issues:
1. Validity of the order passed by the Income-tax Department under section 269UD of the Income tax Act, 1961.
2. Interim order regarding possession of the property pending the writ petition.
3. Withdrawal of the balance consideration of Rs. 8 lakhs by the original owner.
4. Entitlement of the original owner to interest from the appellant.

Validity of Income-tax Department's Order:
The Supreme Court heard the appeal regarding the validity of the Income-tax Department's order under section 269UD of the Income tax Act, 1961, which affected the sale of a property. The appellant challenged this order, and a writ petition was pending in the High Court. An interim order allowed the Department to take possession of the property but directed reconveyance to the appellant if successful. The Court emphasized the need to maintain the status quo of possession until the writ petition's disposal. The appellant was prohibited from altering the property or parting with possession pending the outcome of the case.

Interim Possession Order:
The Court directed that the possession of the property should remain with the appellant until the writ petition's final decision. The appellant was instructed not to transfer, alienate, or construct on the property during this period. In case the writ petition failed, the appellant would need to surrender possession to the Income-tax Department, who would then be required to pay the appellant the full consideration amount of Rs. 13 lakhs.

Withdrawal of Balance Consideration:
The original owner sought to withdraw the balance consideration of Rs. 8 lakhs deposited in the High Court by the appellant. The Court allowed this withdrawal, subject to the owner's compliance with an undertaking to execute a sale deed in favor of the appellant if the writ petition succeeded. The Court clarified that the payment of Rs. 8 lakhs would be considered as full satisfaction of the sale consideration, denying the owner's claim for interest from the appellant.

Entitlement to Interest:
After deliberation, the Court ruled that the original owner would not be entitled to any interest from the appellant. The payment of Rs. 8 lakhs was deemed sufficient to fulfill the sale consideration, settling the issue of interest between the parties. The Court disposed of the appeal with these decisions, providing clarity on the possession, consideration payment, and interest entitlement aspects of the case.

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