TaxTMI 
TaxTMI 
2005 (9) TMI 39
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.... on February 6, 1993, to sell their property for a total consideration of Rs. 24,00,000 in favour of petitioner No. 1. The entire payment of Rs. 24,00,000 was paid by the first petitioner to the vendors, petitioners Nos. 2 and 3 immediately on signing of the said agreement. Apart from this, the first petitioner had also incurred expenditure in the sum of Rs. 1.89 lakhs by way of registration fee. The Finance Act of 1986 has introduced Chapter XX-C in the Act providing for compulsory purchase by the Central Government of immovable properties in certain cases of transfer. In view of the introduction of Chapter XX-C, the petitioners applied for no objection in Form No. 37-I to the appropriate authority with a request to issue "No objection certificate" to transfer the property in question described hereinabove as per the agreement of sale dated February 6, 1993, in favour of the first petitioner. The appropriate authority after receipt of the statement in the prescribed Form No. 37-I, from the parties, issued a show-cause notice dated April 13, 1993, (exhibit "C"), to show cause as to why the order should not be made against the transferor and transferee in accordance with the p....
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.... square foot which was much higher than that of the transaction for which NOC was issued by respondent No. 1. The petitioners have submitted that the flat referred to above which fetched a price of Rs. 2,856 is on the 6th floor whereas the subject flat is on the 1st floor of the said Miranda Apartment. He submits that in Mumbai higher floor apartments fetch more price. He submits that the petitioners were erroneously refused NOC by the appropriate authority; considering grant of NOC in respect of another flat on May 16,1993, i.e., subsequent to the rejection of NOC in favour of the petitioners. This subsequent knowledge acquired by the petitioners was allowed to be brought on record by an amendment. With the aforesaid material on record, learned counsel appearing for the petitioners submitted that the impugned order passed by the respondents seeking to acquire the suit property by way of pre-emptive purchase, is erroneous, illegal, and suffers from total non-application of mind as such the same is liable to be quashed and set aside. Learned counsel further submits that the show-cause notice issued was vague and did not disclose any relevant material relied upon by the resp....
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....mpugned order is not only liable to be quashed and set aside but the petition is liable to be allowed with exemplary costs. Per contra: Mr. Asokan, learned counsel appearing for the Revenue, conceded that so far as the show-cause notice is concerned it was vague. He also agrees that the sale transaction disclosed in the petition with respect to the flats located in the Miranda Apartment can be said to be comparable transactions. However, he submits that the impugned order be quashed and set aside and the matter be remanded back to the appropriate authority for reconsideration. In support of his submission he submits that while comparing the sale instances of the different properties, various facets of the property are required to be taken into account including its location, nature of construction, etc. He, thus, prayed for remand for consideration afresh. Consideration: Having heard rival parties, this petition can be decided on a narrow issue based on undisputed facts. It is not in dispute that the show-cause notice issued reads as under: "No. AA/Bom/11145/1993-94 Office of the Appropriate Authority (Income-tax Department) Mittal Court, A-Wing, 3rd Floor, ....
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....e show-cause notice for entertaining a tentative or a prima facie view that the value of the suit land is grossly understated in the agreement of sale between the parries, the transferor and the transferee have no real opportunity to meet the case of the appropriate authority or the Income-tax Department concerned in that regard and hence there is non-compliance with the basic principles of natural justice." In the above view of the matter, the impugned order is liable to be quashed and set aside being in breach of principles of natural justice. The second contention raised by the petitioners that the prima facie conclusion reached by the appropriate authority that there had been undervaluation of the suit property by 15 per cent, with an attempt to evade tax is a presumption which is rebuttable as such the petitioners were entitled to have a fair opportunity of being heard to enable them to rebut the presumption of tax evasion. The respondents not only failed to disclose in the show-cause notice any material relied upon by them and did not specify reasons or grounds to reach the presumption of tax evasion but even failed to give a reasonable opportunity of being heard to the....