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Commissioner of Income-tax and anr. Vs. Himanshu V. Rathor and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtOrissa High Court
Decided On
Case NumberMiscellaneous Appeal No. 99 of 1977
Judge
Reported in[1982]135ITR273(Orissa)
ActsIncome Tax Act, 1961 - Sections 269, 269C, 269D and 269F(6); Income Tax Rules, 1962 - Rule 48E; ;Hindu Minority and Guardianship Act
AppellantCommissioner of Income-tax and anr.
RespondentHimanshu V. Rathor and ors.
Appellant AdvocateA.B. Misra, Adv.
Respondent AdvocateB.K. Mohanti, ;Ch. P.K. Misra and ;B.P. Das, Advs.
Excerpt:
.....v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - 2,11,000. 3. the competent authority thereafter notified the parties as well as the tenants in occupation and invited objections. the tribunal relied upon this mistake and proceeded on the footing that as the notice was a condition precedent to the exercise of the jurisdiction, and since the notice was defective and bad, the entire proceeding was vitiated......however, was a mistake in regard to the holding number as also the plot number regarding the 10 decimals. the tribunal relied upon this mistake and proceeded on the footing that as the notice was a condition precedent to the exercise of the jurisdiction, and since the notice was defective and bad, the entire proceeding was vitiated. accordingly, it vacated the order of acquisition.10. learned standing counsel contended before us that conceding that the notice was defective in regard to the 10 decimals, since there was no mistake in regard to the 71 decimals, the acquisition could have been confined to it. we do not think, there is force in this argument. it is not known whether the house stood on 71 decimals or 10 decimals or on both. there is no material before us to allocate the.....
Judgment:

Misra, C.J.

1. This appeal under Section 269H of the I.T. Act of 1961 (hereinafter referred to as 'the Act') is against the decision of the Income-tax Appellate Tribunal, Cuttack Bench, dated February 21, 1977, by which the said Tribunal allowed the appeal of the respondents and set aside the order dated March 31, 1976, made under Section 269F of the Act.

2. A four-storeyed building standing upon a plot of land with an area of 81 decimals on the Ice Factory Road near the Ravenshaw College in Cuttack Town was sold under Sale Deed No. 2309 dated May 15, 1973, for a consideration of Rs. 1,15,000 by Kooverji K. Rathor in favour of Himanshu V. Rathor and K. R. Rathor. The vendees were minors and were represented by their respective fathers to complete the transaction of sale. The Competent Authority under the Act on getting information from the District Sub-Registrar under Section 269P of the Act being of the view that the sale was for an apparent consideration which was less than the fair marketvalue of the property, initiated a proceeding under Chap. XX-A of the Act. The Competent Authority initiated acquisition proceedings in terms of Section 269C by publishing a notice in the Gazette of India on November 24, 1973. Copies of such notice were served on the transferor and the transferees. Proclamation in terms of Rule 48E of the I.T. Rules, 1962, was also made. The Competent Authority asked the Valuation Officer to determine the fair market value of the property and the Valuation Officer determined the market value by a report dated April 8, 1974, at Rs. 2,11,000.

3. The Competent Authority thereafter notified the parties as well as the tenants in occupation and invited objections. In the objection, it was pointed out-

(i) the acquisition proceedings were vitiated on account of certain mistakes in the notice published in the Gazette ;

(ii) the consideration shown in the sale deed represented fair market value on the date of transfer and that valuation had been determined by an approved valuer;

(iii) the initiation of the acquisition proceedings without the court's permission when the interest of the minor-transferees was at stake was opposed to the provisions of the Hindu Minority and Guardianship Act.

4. Admittedly, there was a mistake in the description of one of the items of property and by a corrigendum dated 20th of March, 1974, the mistake was rectified. The Competent Authority relied upon the corrigendum and held that after the rectification, there was no force in the objection. The second contention was rejected by relying on the annual rent received from the property and the valuation of Rs. 2,11,000 was upheld.

5. The transferor and the transferees had challenged the report of the Valuation Officer on several grounds, but the Competent Authority did not agree to vary the valuation. Accordingly, an order was made on March 31, 1976, in exercise of powers under Section 269F(6) of the Act for an acquisition of the property.

6. An appeal was carried against that order to the Tribunal under Section 269G of the Act. Three contentions were raised in support of the appeal:

(i) the Gazette notification dated November 24, 1973, was materially defective and inoperative in law ;

(ii) the determination of fair market value on the date of transfer was arbitrarily high ; and

(iii) the acquisition proceedings were not applicable to the instant transfer as the same was saved by the provisions of Section 269 of the Act.

7. The Tribunal did not examine the tenability of the second and third grounds but confined its decision to the first aspect and held that thenotice being defective did not confer jurisdiction on the Competent Authority to proceed further. The appeal was, accordingly, allowed and the order of acquisition has been vacated.

8. Section 269D of the Act provides :

'(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)......'

9. Initially, a period of six months was provided for taking action under Section 269D(1), but by amendment of 1973, with retrospective effect from November 15, 1972, a period of nine months has been provided. The property subjected to acquisition is 81 decimals of land covered by two plots--10 decimals in plot No. 630/1432, and 71 decimals in plot No. 630. The 10 decimals relate to Khata No. 125 and the 71 decimals relate to Khata No. 127. The description given in the notification of November 24, 1973, did not contain any mistake with regard to the 71 decimals. There, however, was a mistake in regard to the holding number as also the plot number regarding the 10 decimals. The Tribunal relied upon this mistake and proceeded on the footing that as the notice was a condition precedent to the exercise of the jurisdiction, and since the notice was defective and bad, the entire proceeding was vitiated. Accordingly, it vacated the order of acquisition.

10. Learned standing counsel contended before us that conceding that the notice was defective in regard to the 10 decimals, since there was no mistake in regard to the 71 decimals, the acquisition could have been confined to it. We do not think, there is force in this argument. It is not known whether the house stood on 71 decimals or 10 decimals or on both. There is no material before us to allocate the total consideration between the two plots. In the absence of appropriate materials, it is not possible at this stage to hold that the acquisition can be sustained for the 71 decimals of land and the construction thereupon while the Tribunal's decision would be sustained in regard to the 10 decimals.

11. We are, however, not impressed by the stand taken by the Tribunal, namely, once there is an appropriate notice within the period of limitation provided by statute, but there is a typographical mistake in the notice, the defect is not curable and with the rectification of the defect, the original notice may not operate, The mistake in the instant case is of no consequence, particularly because the parties could not have been prejudiced bythe mistake. Two plots had been sold under a common document. The notice referred to the sale deed and expressed intention of buying out the property sold thereunder by exercise of the statutory power. There was no mistake in the Khata number. It is not the case of the parties that they own some other property which answers the description given in the defective notice. In the circumstances, the technical view taken by the Tribunal does not at all appeal to us. We are inclined to think that after the removal of the defect, the original notice should have been given effect to.

12. While looking into the record, we do not find that the corrigendum was published in the Gazette. A copy of a letter requesting the Manager of the Govt. Press to publish the rectification is available at p. 76 of the record. There is, however, no proof of publication. Sub-section (1) of Section 269D makes publication in the Gazette mandatory and a condition precedent to the making of an order of acquisition. If the corrigendum had to be issued, strictly speaking, it required publication in the Gazette. In fact, a request to that effect had been made by the department. Therefore, the Tribunal should have taken pains to find out whether there was an actual publication prior to the making of the order of acquisition. This aspect of the matter requires further investigation.

13. Several authorities were placed before us in support of the contention that on an appropriate notice being given, jurisdiction to make the order of acquisition could arise. Since the notice itself was defective, statutory action conditioned upon it could not have been taken. We have already held that the defect was of no consequence and once it was rectified, the original notice became operative with the corrections. On the view we have taken in the master, reference to the decisions cited before us becomes unnecessary.

14. Two other contentions had been advanced before the Tribunal which were not examined as, in its opinion, the answer to the first contention was sufficient to dispose of the appeal. Since we have not agreed with that view, the other two questions, particularly the second one relating to actual valuation of the property on the date of the transaction, should be examined by the Tribunal.

15. The appeal is allowed, the appellate order of the Tribunal is vacated and the Tribunal is called upon to dispose of the appeal afresh, keeping the observations made above in view.

16. Costs shall abide the event.

B.N. Misra, J.

17. I agree.


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