Chapter XX-A acquisition upheld where valuation disparity, valid notice, and a suspect backdated agreement could not defeat the proceedings.

Chapter XX-A acquisition proceedings were upheld on the basis that the competent authority had material, including a DVO valuation showing substantial disparity between declared consideration and fair market value, to form the requisite belief. The notice under section 269D(1) was treated as valid when read with the sale deed and because it was published in the Gazette, locality and by affixation; participation in the proceedings cured curable defects. Objections based on non-issue of notices to later allottees and denial of cross-examination failed because the allottees were not persons interested at the initiation stage and no prejudice was shown. The alleged 2 October 1974 agreement was found suspicious and backdated, so it could not alter the relevant transfer date.

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Issues: (i) Whether the Jaipur Bench had jurisdiction to hear the appeal; (ii) whether the acquisition proceedings under Chapter XX-A were validly initiated and continued, including compliance with notice requirements and the existence of reasons to believe; (iii) whether non-issue of notices to individual plot allottees or denial of cross-examination and documents vitiated the proceedings; and (iv) whether the alleged 2nd Oct., 1974 agreement was genuine so as to fix the relevant date and negate acquisition.

Issue (i): Whether the Jaipur Bench had jurisdiction to hear the appeal.

Analysis: The order under section 269F(6) was passed at Jaipur, both parties had Jaipur addresses, the assessee was assessed at Jaipur, and the cause of action arose at Jaipur because approval was obtained from the Jaipur CIT. On these facts, the territorial connection to Jaipur was established.

Conclusion: The jurisdictional objection was rightly rejected in favour of the Revenue.

Issue (ii): Whether the acquisition proceedings under Chapter XX-A were validly initiated and continued, including compliance with notice requirements and the existence of reasons to believe.

Analysis: The Competent Authority relied on a DVO report showing a large disparity between the declared consideration and the fair market value, which furnished the basis for forming the requisite belief. The notice under section 269D(1) was issued within the prescribed period and was to be read with the sale deed containing the property particulars. The notice was published in the Gazette, in the locality, and by affixation, and the long pendency was attributed to continuing litigation and stay orders. Any defect stood cured when the assessee participated in the proceedings.

Conclusion: The initiation and continuation of the acquisition proceedings were held valid and in favour of the Revenue.

Issue (iii): Whether non-issue of notices to individual plot allottees or denial of cross-examination and documents vitiated the proceedings.

Analysis: The allottees were not found to be "persons interested" at the stage when the acquisition proceedings were initiated, because allotment to them occurred later. The right of hearing did not include an absolute right of cross-examination of the valuation officer, and the record showed that relevant material, including the valuation report and recorded reasons, had been supplied during the proceedings. No prejudice causing failure of justice was established.

Conclusion: These objections failed and were decided against the assessee.

Issue (iv): Whether the alleged 2nd Oct., 1974 agreement was genuine so as to fix the relevant date and negate acquisition.

Analysis: The agreement was found suspect because of the surrounding circumstances, including the stamp paper's purchase particulars, the holiday date, the delayed banking and ratification, inconsistent conduct of the parties, and the absence of the original document. The surrounding record indicated that the document was backdated and concocted, so it could not control the relevant date for valuation or defeat the acquisition proceedings. The relevant date remained the date of execution/registration of the transfer document, not the alleged earlier unregistered agreement.

Conclusion: The agreement was held not genuine, and this finding was against the assessee.

Final Conclusion: The acquisition order was sustained on all material grounds, and the assessee's challenge to the acquisition proceedings failed in entirety.

Ratio Decidendi: In Chapter XX-A acquisition proceedings, the notice and formation of belief are valid where the fair market value materially exceeds the declared consideration, the notice sufficiently identifies the property when read with the transfer deed, participation cures curable defects, and an unproved backdated agreement cannot displace the relevant transfer date.

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