TaxTMI 
TaxTMI 
1988 (7) TMI 6
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....nt-vendor having failed before the lower authority has preferred this appeal. The appellant-vendor agreed to sell certain rights and interests in the property in question by an agreement dated April 22, 1983. The sale deed was effected on September 20, 1983, in which consideration of Rs. 8 lakhs was shown. The Inspecting Assistant Commissioner received Form No. 37G from the Sub-registrar concerned. He referred the matter to the District Valuation Officer, who, we are told, is the statutory authority to deal with the valuation of the properties and is attached to the Income-tax Department. The Inspecting Assistant Commissioner also called for a report from the Inspector who submitted the valuation report on May 4, 1984. According to the r....
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.... to be argued that the condition precedent for the initiation of the proceedings was not complied with. It was also sought to be argued that when the proceedings were initiated, only the Inspector's report was available and the Inspector had relied upon an erroneous basis and, therefore, there was no material before the Inspecting Assistant Commissioner on the basis of which proceedings could be initiated. The Tribunal negatived the aforesaid contention holding that at the stage of initiation of proceedings, there should be some prima facie case. Initiation means and remains initiation and nothing more and initiation itself is not acquisition. It was also contended that the total area taken into consideration for the valuation was not co....
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....e Inspecting Assistant Commissioner had at least the following materials before him when the acquisition proceedings were initiated. 1. Sale document. 2. Inspector's report. Even assuming for a moment that the District Valuation Officer's report was not available at the time when the acquisition proceedings were initiated by the Inspecting Assistant Commissioner, then also it cannot be said that there was no material before the Inspecting Assistant Commissioner on the basis of which he could not have formed a 'reason to believe' that the acquisition proceedings should be initiated. It is trite knowledge that in cases where the authority is empowered to exercise powers on the basis of his subjective satisfaction, the scope of judici....
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....section 269G (269D ?) under which the initial notice is to be issued, then also, if the provision is to be saved, the phrase "reason to believe" will have to be read by necessary implication. No power can be exercised otherwise than in accordance with reason. Exercise of power otherwise than in accordance with such reason would amount to arbitrary exercise of power and, therefore, it would be bad. In a system governed by rule of law, the conferment of power carries with itself an implied obligation to exercise the same reasonably and not in accordance with one's own fancy or speculation. On the facts of the case, the Tribunal has come to the conclusion that there was sufficient material before the Inspecting Assistant Commissioner who is....
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....ety Ltd. v. Union of India [1985] 152 ITR 114 (Bom). 2. CIT v. Arun Mehra [1986] 157 ITR 308 (Delhi). In none of the aforesaid decisions, cited by learned counsel for the appellant, it is held that the correctness or otherwise of the material placed before the Competent Authority can be appreciated and can be gone into by the court. This is so because the court is not sitting in appeal over the decision of the Competent Authority. Therefore, it cannot be said that since the Inspector's report was based on incorrect facts, the Competent Authority had no jurisdiction to initiate the proceedings. In view of the aforesaid finding, we do not think that questions Nos. (1) and (2) raised in this appeal and which have been reproduced hereinab....