TaxTMI 
TaxTMI 
1983 (9) TMI 81
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....is report dated April 20, 1978, to the effect that the plot in dispute was of the market value of Rs. 1,32,000 on the date of the sale. The Competent Authority initiated the proceedings under s. 269C of the Act. The relevant notice was published in the official Gazette on June 3, 1978. It appears, in the meantime, the respondent had built some shops on the plot in question and had let them out to some tenants. The notice of the proceedings was served upon the respondent, but no such notice was served individually on some of the above said tenants. The Competent Authority, vide its order dated March 21, 1980, held that the case fell under s. 269F(6) of the Act and as such ordered the acquiring of the plot in dispute. The respondent alone filed the appeal before the Tribunal. It first took the view that even though the respondent had been duly served (a notice) under s. 269D(2), yet the mere failure to serve (notices to) the tenants of the shops on the disputed property was a material defect which vitiated both the proceedings and the consequential order, and for that reason alone, the order under appeal was liable to be struck down. However, as an additional reason, it held that the....
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....in contention raised on behalf of the appellant is that the Tribunal has wrongly allowed the respondent to raise the question of wrong initiation of the proceedings by the Competent Authority as it was never raised earlier before it. The only point urged before it was with regard to the valuation of the property which the Tribunal has not decided. In any case, according to the learned counsel, for the purpose of the issuance of the notice, the report of the inspector was sufficient and it has been wrongly held by the Tribunal that there was no legally valid material apart from the conjectures and surmises, which had led to the finding about the existence of the objects specified in cl. (a) or (b) of s. 269C(1) of the Act. In support of this contention, the learned counsel relied upon U. S. Awasthi v. IAC [1977] 107 ITR 796 (All), CIT v. Vimlaben Bhagwandas Patel L1979] 118 ITR 134 (Guj) and G. V. Swaika Estate (P.) Ltd. (Rai Bahadur) v. M. N. Tewari [1980] 126 ITR 310 (Cal). On the other hand, the learned counsel for the respondent argued that the objection as to the jurisdiction of the Competent Authority could be taken at any time and that the learned Tribunal rightly allowed the....
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.... that no such objection was raised. However, since it relates to the assumption of the jurisdiction, we are of the considered opinion that the Tribunal rightly allowed the respondent to raise the same in appeal even if we presume that it was not specifically argued before the Competent Authority. The main question to be decided in this appeal is whether the Corn. patent Authority before initiating the proceedings under s. 269C of the Act, applied its mind and recorded the reasons for doing so on the material furnished by the inspector in his report dated April 20, 1978. Section 269C(1) reads: "Where the Competent Authority has reason to believe that any immovable property of a fair market value exceeding twenty-five thousand rupees has been transferred by a person (hereafter in this Chapter referred to as the transferor) to another person (hereafter in this Chapter referred to as the transferee) for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of (a) facilitating the reduction or evasion of ....
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....is penal in nature and the proceedings initiated thereunder are quasi-criminal. In the present case, the Competent Authority on the report of the inspector, dated April 20, 1975, passed the following order : Seen. Initiate action. (Sd./-) 28/4. Admittedly, no reasons whatsoever were given by the Competent Authority before initiating the proceedings as required by the statute. To say that since the orders were passed on the basis of the report as such by the Competent Authority and he initiated the proceedings on the basis of the said report, is nothing but violating the statutory requirements as provided under s. 269C(1) of the Act. It is for the Competent Authority to believe that there exist reasons to conclude that the consideration for the transfer as agreed to between the parties had not been truly stated in the instrument of transfer with the object of facilitating the reduction or evasion of the liability to pay tax or facilitating the concealment of any income, etc., and not for any other authority to have his own opinion in the matter. Keeping that purpose in view, it was obligatory on the part of the Competent Authority to apply his own mind to the material....