1. An house property bearing No. 2 situated on Artillery Road, Civil Station, Bangalore City, measuring about 627 sq. mts. was originally owned by one Sadiq Hussain of Banglore City, who on June 15, 1981, transferred the same to the petitioner for a sum of Rs. 1,80,000. On an examination of the said transfer, the Inspecting Assistant Commissioner of Income-tax (Acquisition Range), Bangalore, ('IAC'), being of the opinion that the fair market value of the property exceeded the apparent consideration stated in the instrument of transfer by more than 15% had issued notice No. CR 62/30399/81-82 dated December 18, 1981 (annexure G) to the transferor and transferee under s. 269D(1) of the I.T. Act of 1961 (Central Act 43 of 1961) ('the Act'), proposing to acquire the property for the Government under Chapter XXA of that Act. In this petition under art. 226 of the Constitution, the petitioner has challenged the said showcause notice principally on two ground and they are (i) that the proceedings had not been initiated by the IAC within the permitted time and (ii) that the transaction being real and genuine, there was no justification to initiate proceedings under the Act.
2. The respondents have resisted this writ petition.
3. Sri. K. Poornabodha Rao, learned counsel for the petitioner, strenuously contends that the initiation of the proceedings had to be reckoned as made only on April 5, 1982, on which day only the IAC intimated the fact of publication in the Official Gazette and, so reckoned, the proceeding were barred by time. In support of his contention, Sri Rao strongly relies on a Division Bench ruling of the Allahabad High Court in U.S. Awasthi v. IAC : 107ITR796(All) .
4. Sri K. Srinivasan, learned senior standing counsel for the Income-tax Department, appearing for the respondents, refuting the contention of Sri Rao contends that the date of publication in the Official Gazette should be reckoned as the date of publication for purpose of s. 269D(1) of the Act and, so constructed, the proceedings were in time. In support of his contention, Sri Srinivasan strongly relies on the ruling of the Supreme Court in State of Maharashtra v. Mayer Hans George : 1SCR123 , and a Division Bench ruling of the Gujarat High Court in CIT v. Shilaben Kanchanlal Ran : 124ITR420(Guj) .
5. In his letter No. CR 62/30899/81-82/Acq. dated April 2, 1982 (annexure J), IAC has stated that the notice of acquisition had been published in the Government of India Gazette dated March 6, 1982, on page 2999 of part III-1, the correctness of which is not disputed by the petitioner. While that is so, this court must necessarily proceed to examine the case on the basis of the facts stated by the IAC in her letter dated April 2, 1982 (annexure J), which means that the notice of acquisition had been published in the Government of India Gazette dated March 6, 1982. Even otherwise, I have no reason to disbelieve the correctness of the statement made by the IAC in her letter dated April 2, 1982.
6. What emerges from the above is that the notice of acquisition had been published in the Government of India Gazette dated March 6, 1982, and that fact had been intimated by the IAC in her letter dated April 5, 1982. On these facts, the question is whether the initiation is barred by time, which depends on the true construction of s. 269D(1) of the Act. That section that is material reads thus :
'269D(1). The competent authority shall initiate proceedings for the acquisition, under this Chapter, of any immovable property referred to in section 269C by notice to that effect published in the Official Gazette : Provided that no such proceedings shall be initiated in respect of any immovable property after the expiration of a period of nine months from the end of the month in which the instrument of transfer in respect of such property is registered under the Registration Act, 1908 (16 of 1908), or, as the case may be, section 269AB'.
7. The proviso to s. 269D(1) of the Act requires the publication of the notice of acquisition within a period of nine months from the end of the month in which the instrument of transfer was registered under the Registration Act. The upper limit specified in s. 269D(1) had to be reckoned from the date of publication in the Official Gazette. What then is the meaning of the term 'the date of publication in the Official Gazette'. In Mayer Hans George's case, : 1SCR123 , the Supreme Court examining the very question, expressing concurrence with the views expressed by C. K. Allen in his treatise 'Law and order' had ruled that the very date on which publication was effected in the Official Gazette was the date of publication for purposes of enactment as also the public against whom it operates. On this principle explained at length by the Gujarat High Court in Shilaben Kanchanlal Ran's case : 124ITR420(Guj) , in which that High Court had dissented from the contrary views expressed by the High Court of Allahabad in Awasthi's case : 107ITR796(All) , without noticing the ruling of the Supreme Court in Mayer Hans George's case : 1SCR123 , it must be held that the notice of acquisition under s. 269D(1) was published on March 6, 1982, and not on April 5, 1982, on which day the IAC intimated the petitioner.
8. Earlier I have held that the notice of acquisition had been published in the Government of India Gazette dated March 6, 1982. When one computes the period from the end of the month in which the instrument of transfer was registered, viz., June 15, 1981, and the date of publication in the Government of India Gazette on March 6, 1982, it is clear that the notice of acquisition had been published well within the period of time stipulated in the proviso to s. 269D(1) of the Act.
9. As the very question on which Sri Rao's contention is based directly concluded by the ruling of the Supreme Court in Mayer Hans George's case : 1SCR123 , it is unnecessary to deal with Awasthi's case : 107ITR796(All) , in which the High Court of Allahabad had expressed a different view.
10. On the above discussion, I see no merit in this contention of Sri Rao and I reject the same.
11. Sri Rao next contends that all the facts and circumstances of the material on record not justify the IAC to form her opinion and initiate the proceedings under Chapter XXA of the Act.
12. Sri Srinivasan contends that the satisfaction of the authority, which was also based on relevant material, cannot be examined by this court as if it is an appeal and a different conclusion reached on the same by this court in exercise of extraordinary jurisdiction under article 226 of the Constitution.
13. In the notice issued, the IAC who had undoubtedly the jurisdiction to initiate the proceedings had stated that the stated consideration was not the real consideration, that the fair market value of the property exceeded the same by more than 15% of the same and, therefore, justified the initiation of proceedings under Chapter XXA of the Act. A notice issued under Chapter XXA of the Act, the correctness of which can be contested on all grounds that are stated in this petition and such other grounds as are available in law cannot be examined by this court as if it is an appeal and a different conclusion reached, at any rate, at this stage. In any event, it is open to the petitioner to contest the same on every one of the facts stated herein, the correctness of which has to be examined by the first appellate authority and also by this court in a second appeal. But, before that, there is no justification for this court to interfere with the same.
14. When the petitioner approached this court challenging the very notice, this court had stayed the proceedings. In this view, Sri Rao prays for 45 days' time from this day for filing objections before the IAC. In the circumstances that had developed, it is proper to grant the time sought for by Sri Rao.
15. In the light of my above discussion, I hold that this writ petition is liable to be rejected. I, therefore, reject this writ petition. But, the petitioner is granted 45 days' time from this day for filing its objections before the IAC who on receipt of the same will proceed to decide the matter in accordance with law and is also bound to examine every one of the pleas to be urged by the petitioner on merits.
16. Writ petition is disposed of in the above terms. But, in the circumstances of the case, I direct the parties to bear their own costs.
17. Let this order be communicated to the first respondent within 15 days from this day.