TaxTMI 
TaxTMI 
2007 (6) TMI 186
X X X X Extracts X X X X
X X X X Extracts X X X X
....69UL(3) of the Income-tax Act, 1961. The petitioners have further prayed that the Central Government be directed to make good the loss caused to the petitioners and to pay the amount with interest. The petitioners have also prayed for an injunction restraining the respondents from proceeding further by way of taking possession of the property, in pursuance of the impugned order. The brief facts of the case are that petitioner No. 4 is the wife of petitioner No. 3, petitioner No. 1 is true brother of petitioner No. 4 and petitioner No. 2 is a minor son of the brother of petitioner No. 4. Petitioners Nos. 1 and 2 (hereinafter referred to as the purchasers) had executed an agreement with petitioners Nos. 3 and 4 (hereinafter referred to as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ners had filed their written submissions, and on January 15, 1993, the petitioners had made their oral submissions before the appropriate authority and had requested the appropriate authority to furnish the material relied on by the said appropriate authority including valuation reports and to give fair opportunity for reply in spite of that the appropriate authority did not furnish the material and reports. Thereafter, on February 22, 1993, the petitioners had received an order of the appropriate authority under section 269UD(1) of the Income-tax Act dated February 18, 1993, whereby the purchase of the said property was directed. Aggrieved thereby, the petitioners have filed the present petition. Learned counsel Mr. Bhujale appearing on....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not sufficient to prove the understatement or that the difference was more than 15 per cent. and there was no valid basis for presumption of attempt to evade tax. It is further submitted by Mr. Bhujale, learned counsel for the petitioners that the comparable transactions in the same building and other comparable transactions proving thereby that there was no understatement of consideration, relied upon by the petitioners, were not considered at all. Learned counsel for the petitioners also submitted that in spite of request being made for supply of valuation report, note of the Deputy Commissioner of Income-tax, i.e., the appropriate authority and other material information have not been furnished and no fair opportunity of hearing was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lat, there was no understatement of consideration. It is the case of the petitioners that the competent authority, on being satisfied with the explanation that there was no understatement of consideration, the competent authority did not acquire the property. It is vehemently submitted by learned counsel, Mr. Bhujale for the petitioners that the appropriate authority has not brought any evidence to show the understatement of consideration or any attempt to evade tax so as to assume the jurisdiction for passing a valid order of purchase. It is the further case of the petitioners that the market value of the subject property was not determined. It is further submitted by learned counsel for the petitioners that the comparable transactio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and set aside. In reply to the contentions of the petitioners, learned counsel Mr. Ashokan for the respondents contended that at the relevant time it was not the practice to give personal hearing before passing such orders and the statute did not expressly provide for such a personal hearing before an order is passed. Learned counsel for the respondents further submitted that in the impugned order dated February 18, 1993, the appropriate authority had concluded that the apparent consideration disclosed in the sale agreement dated September 14, 1986, was very low as compared to the fair market value of the subject property at the relevant time, and the difference between the fair market value and the declared value in the sale agreement ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under section 269UD of the Income-tax Act, etc. In the aforesaid judgment, this court had categorically held that the order of the appropriate authority had passed pursuant to such a defective show-cause notice was illegal and vitiated for not being in consonance with the basic principles of natural justice. The appropriate authority had not proved by clear and cogent material that the land in question was significantly undervalued and, hence, the court held that the order of compulsory purchase was liable to be quashed. The court observed that it was necessary for the appropriate authority to refer to the details in the show-cause notice so that the transferor and/or transferee would have real and proper opportunity to meet the case of t....