TaxTMI 
TaxTMI 
1996 (3) TMI 86
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.... at a total consideration of Rs. 93.50 lakhs on the terms and conditions agreed in an agreement dated December 8, 1994. An advance of Rs. 50,000 as earnest money was received by the trustees from respondent No. 5. The trustees agreed to take steps to get the property vacated by the tenants and give vacant possession to the purchaser within one year, in which the purchaser agreed to co-operate. In view of the provisions of Chapter XX-C, Income-tax Act, 1961, Form No. 37-I was filed in respect of the aforesaid agreement on December 26, 1994. Form No. 37-I clearly stated that the vendors (transferors) were the trustees as aforesaid and the property was in occupation of tenants, as per details annexed, and the petitioners were interested in the property as trustees. The Superintendent Engineer of the respondent Department by his valuation report dated February 2, 1995, found that the property was tenanted with 100 years old structures and was not in a peaceful area having mainly muslim middle class locality with mosque adjacent to the property. On the basis of a single sale instance of a better located and vacant property, he estimated the market value of the aforesaid p....
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....ffected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as 'the transferor') and the person to whom it is proposed to be transferred (hereinafter referred to as 'the transferee') in accordance with the provisions of sub-section (2) at least four months before the intended date of transfer. (2) The agreement referred to in sub-section (1) shall be reduced to writing in the form of a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties. (3) Every statement referred to in sub-section (2) shall, -- (i) be in the prescribed form ; (ii) set forth such particulars as may be prescribed ; and (iii) be verified in the prescribed manner, and shall be furnished to the appropriate authority in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties. (4) Where it is found that the statement referred to in sub-section (2) is defective....
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....os shall be reckoned with reference to the date of receipt of the statement by the appropriate authority having jurisdiction to make the order under this sub-section : Provided also that the period of limitation referred to in the second proviso shall be reckoned, where any stay has been granted by any court against the passing of an order for the purchase of the immovable property under this Chapter, with reference to the date of vacation of the said stay. (1A) Before making an order under sub-section (1), the appropriate authority shall give a reasonable opportunity of being heard to the transferor, the person in occupation of the immovable property if the transferor is not in occupation of the property, the transferee and to every other person whom the appropriate authority knows to be interested in the property. . . . 269UE. (1) Where an order under sub-section (1) of section 269UD is made by the appropriate authority in respect of an immovable property referred to in sub-clause (i) of clause (d) of section 269UA, such property shall, on the date of such order, vest in the Central Government in terms of the agreement for transfer referred to in sub-section (1) of secti....
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....ances on the property and, notwithstanding anything contained in any other law for the time being in force, such liability may be enforced against the transferor or such other person. (6) Where an order under sub-section (1) of section 269UD is made in respect of an immovable property, being rights of the nature referred to in sub-clause (ii) of clause (d) of section 269UA, such order shall have the effect of-- (a) vesting such right in the Central Government ; and (b) placing the Central Government in the same position in relation to such rights as the person in whom such a right would have continued to vest if such order had not been made. (7) Where any rights in respect of any immovable property, being rights in, or with respect to, any land or any building or part of a building which has been constructed or which is to be constructed, have been vested in the Central Government under sub-section (6), the provisions of sub-sections (1), (2), (3) and (4) shall, so far as may be, have effect as if the references to immovable property therein were references to such land or building or part thereof, as the case may be. 269UF. (1) Where an order for the purchase of any....
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....ority the amount of consideration required to be tendered under sub-section (1) within the period specified therein : Provided that nothing herein contained shall affect the liability of any person who may receive the whole or any part of the amount of consideration for any immovable property vested in the Central Government under this Chapter to pay the same to the person lawfully entitled thereto. (4) Where any amount of consideration has been deposited with the appropriate authority under this section, the appropriate authority may, either of its own motion or on an application made by or on behalf of any person interested or claiming to be interested in such amount, order the same to be invested in such Government or other securities as it may think proper, and may direct the interest or other proceeds of any such investment to be accumulated and paid in such manner as will, in its opinion, give the parties interested therein the same benefits there from as they might have had from the immovable property in respect whereof such amount has been deposited or as near thereto as may be. 269UH. (1) If the Central Government fails to tender under sub-section (1) of section 2....
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....of section 269UG did not apply. It has further been submitted on behalf of the petitioners that provision of section 269UG not having been complied with within the specified time--section 269UH has come into operation. It has been submitted on behalf of the petitioners that the respondents under Chapter XX-C of the Income-tax Act, exercise statutory power as per powers and duties prescribed therein. The respondents do not exercise any contractual right. Chapter XX-C do not create any contract or contractual right between the appropriate authority, Central Government and the transferors. It only creates statutory powers and duties. The learned advocate for the petitioners has submitted that on the language of sections 269UD and 269UE, the purchase of the property and vesting of the same in the Government is not contractual but takes effect by operation of law. It has also been contended that by virtue of an order made under section 269UD(1), the property vests immediately on passing of the said order in the Central Government without any consent or acceptance of any act to be done by the transferor, and the transferor is divested of any right, title, interest and ownersh....
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....to comply with the provisions of section 269UF, the provisions contained in section 269UH have come into force. In support of his contention the learned advocate for the petitioners has relied upon the judgment and decision in the case of Shrichand Raheja v. S C. Prasad and Laila Hitchens v. Union of India [1995] 213 ITR 33 (Bom). It has also been contended on behalf of the petitioners that as per the provisions of section 269UD(1) the order has to be made within three months from the end of the month in which the statement referred to in section 269UC in respect of such property is received by the appropriate authority. Not only has the order to be passed within the statutory period but the same should also be communicated within the statutory period and if this is not done, the order will become invalid. In this case the order was passed on the last day (March 31, 1995) but the same was communicated to the petitioners after the expiry of the statutory period. This fact was not denied by the respondents in their affidavit-in-opposition. In support of his contention the learned advocate has relied upon the judgment and decision in the case of CIT v. Sree Narayana Chandrika....
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.... and the purchaser agrees to purchase the property in question free from all encumbrances, attachments and charges and other claims and demands subject to a good and a marketable title being made and the vendors will hand over vacant possession of the said premises. Under section 269UE(2) of the Act, it is the duty of the vendors to deliver possession within 15 days of the service of the order on them. The order was served on them on April 3, 1995, and the writ petitioners were required to hand over vacant and peaceful possession by April 18, 1995, which admittedly they have failed and neglected to do. In C B. Gautam's case [1993] 199 ITR 530, the Supreme Court described the time-frame under Chapter XX-C of the Act as a tight one. Referring to the said decision, this court has held that the need for urgency is not only upon the authority but is placed on the affected parties also and under section 269UE possession has to be given within 15 days from the service of the order as the Central Government has to put up the property for sale. Accordingly, it has been submitted that in view of the conduct of the writ petitioner in not complying with the obligation discretionary relief shou....
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....e respondents has further submitted that the above facts will go to show that there is a dispute as to the apportionment of the amount of consideration amongst persons entitled thereto and/or there is dispute as to the title to receive the consideration. Section 269UG(2) and (3) of the Act has now been judicially construed. Similar provisions as section 269UG(2) and (3) of the Act are there of the Land Acquisition Act. Mr. Pal has argued that several High Courts have construed the said provisions and held that the word "dispute" as used in sections 30 and 31(2) of the Land Acquisition Act does not require that there should be two parties to raise a dispute. He has further submitted that merely because there is no rival claimant to the consideration, section 269UG(3) of the Act does not necessarily compel the authority to tender the apparent consideration under section 269UG(1) of the Act. If the authorities have a bona fide or genuine doubt as to the title of the apparent vendor, it is open to them not to tender the consideration under section 269UG(1) of the Act but make a deposit of the same under section 269UG(3) of the Act. The learned advocate for the respondent has relied ....
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....rwarded to the Reserve Bank of India. In view of the aforesaid section 269UH of the Act has no manner of application in the facts and circumstances of the present case. It has further been submitted on behalf of the respondent, Union of India, that in any event in view of the amended section 269UE(1) of the Act which is applicable in our case the property in question has vested in the Central Government under section 269UE(1) of the Act in terms of the agreement for transfer entered into by and between the writ petitioners and respondent No. 5 dated December 8, 1994. In paragraph 11 of the writ petition, the petitioners themselves admitted that they will remove the tenants after payment of compensation and the purchaser is not liable to pay any compensation to the tenants. In paragraph 10 of their affidavit-in-reply, it is the case of the petitioners that in the event the petitioners fail to remove the tenants the property in question will not be purchased by respondent No. 5. . . . In view of the provisions contained in section 269UK(1) of the Act, the writ petitioners cannot resile from the said agreement and the order passed by respondent No. 1 under section 269UD (1) of the ....
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....s the aforesaid circumstances exist or are reasonably shown to exist a deposit under section 269UG(2) or (3) could not be made. (iii) Any deposit in the absence of the aforesaid circumstances or contrary thereto is invalid, unlawful and not a deposit under section 269UG. None of the aforesaid circumstances exist in this case : (i) The three sellers admittedly on record are joint trustees--selling the property as joint trustees--not individually, personally or separately. (ii) The consideration is admittedly payable to the joint trustees as sellers. Hence, the question of apportionment or any dispute in that regard does not arise. (iii) The assumption as to alleged dispute is entirely imaginary and baseless. (iv) Admittedly, the consideration payable was never tendered to the sellers. Hence, there was no refusal. (v) There is no dispute of any title to receive the consideration amongst the sellers. The sellers never raised any dispute. (vi) Hence, there is no dispute whatsoever within the meaning of and for the purpose of section 269UG(2) or (3). (vii) In the premises, the condition precedent necessary to authorise the Central Government to deposit under s....
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....ory on the Government to pay the consideration amount to the seller except in the three specified conditions mentioned above wherein the deposit can be made. The said conditions, however, do not exist in the present case. The judgment and decision in the case of Shrichand Raheja v. S. C. Prasad [1995] 213 ITR 33 (Bom) relied upon by the learned advocate for the respondent is distinguishable in the facts and circumstances in the instant case. In the aforesaid decision, there was a specific clause in the agreement for sale permitting the transferee to withhold an amount mutually agreed upon and not in excess of Rs. 50,00,000 in case the transferors failed to hand over vacant possession of five servants' quarters and accordingly the transferors withheld the said amount. It was in the facts of the said case, the Bombay High Court held that the Central Government was entitled to take advantage of the terms of the agreement for withholding of Rs. 50,00,000 and the tender in respect of the balance amount is not involved. In the instant case, there is no such clause in the agreement on which the respondent could rely so as to take advantage of the same. In fact, there is no such clau....
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....en by an authority other than the appropriate authority. It has been further contended on behalf of the petitioner that the said deposit was made by letter dated April 28, 1995, which, however, does not disclose any reason for such deposit nor the said letter contained any reason or grounds for such deposit. Nothing has been disclosed to show who directed the deposit to be made. The learned advocate for the petitioners has relied upon the judgment and decision in the case of Sudhansu Kumar Ghose v. Land Acquisition Officer, AIR 1961 Pat 150. In the aforesaid case on November 9, 1957, the petitioners filed a claim in the said case before the Land Acquisition Officer for compensation for the acquisition of the land in question. The claim petition was heard and on October 20, 1958, the Land Acquisition Officer made an award under section 11 of the Land Acquisition Act and the compensation payable to the petitioner was determined to be Rs. 3,586.28. A notice of the award was given to the petitioner on May 1, 1959, but the Land Acquisition Officer instead of making the payment of the compensation to the petitioner made a reference to the District Judge under section 30 of the L....
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....r held that where the jurisdiction of an administrative authority depends upon a preliminary finding of fact, the High Court is entitled, in a proceeding for a writ of certiorari, to determine by its independent judgment whether or not that finding of fact is correct. A similar view has been expressed in two English authorities Rex v. Shoreditch Assessment Committee [1910] 2 KB 859 (CA) and White and Collins v. Minister of Health [1939] 2 KB 838 (CA). So far as the judgment and decision in the case of Mrs. Sooni Rustam Mehta v. Appropriate Authority [1991] 190 ITR 290 (AP) is concerned, the order of deposit was communicated to the petitioner and the reasons were disclosed. Accordingly, the court decided the validity of the reasons and rejected three out of totally four reasons. Only one reason was upheld, namely, that the petitioner has challenged the vires of Chapter XX-C and, therefore, the order under section 269UD was a dispute as to title. In the said case, the writ petition was moved much before the deposit was made, and the order was passed under section 269UD. On March 8, 1990, the petition was admitted and on March 30, 1990, deposit was made. Therefore, it was open t....
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....at before a reference could be made it must be found whether a prima facie case for reference is made out, may also be taken note of in this connec tion. In the aforesaid decision, it was held that it should not be made mechanically or in a wooden fashion--if there is no disputed question, reference does not arise and the reference is illegal. In this connection, in the judgment and decision in the case of Rajeswar Lal Chaudhury v. Ram Niranjan Mour [1995] (Suppl.) 3 SCC 44, it was held that deposit of rent without tender to the landlord is invalid. The following decisions of this court also appear to be relevant in this connection--(1) The judgment and decision in the case of Kabiraj Srinarayan Sarma v. Baijnath Bhartia, AIR 1968 Cal 56 ; (2) the judgment and decision in the case of Shree Nursing Timber Works v. Smt. Amala Bala Dassi, AIR 1969 Cal 12. In the aforesaid decisions, it was held that unless the deposits are valid, the deposit cannot cure the defaults. All deposits made in contravention of the provisions of the statute are invalid and the tenant is not entitled to protection. In the judgment and decision in the case of Provabati Das v. R. R. Joneja [1978] 1 ....