C DASS Vs. APPROPRIATE AUTHORITY IN TAX DEPTT

JUDGEMENT

(1.) Leave granted.

(2.) The appeal is disposed of after hearing counsel for the original owner of the property, the transferee as well as the Income Tax Department.

(3.) The original owner agreed to sell the property in question to the appellant before us for a consideration of Rs. 13 lakhs of which a sum of Rs. 5 lakhs has already been paid. However, the Income Tax Department intervened by passing an order under Section 269-UD of the Income Tax Act, 1961 which if valid would result in the vesting of the property in the Union subject to the terms of the section above-cited. This action of the Department has been challenged by the appellant and the writ petition is pending in the High court. In the meantime, an interim order was passed by the division bench of the High court directing that possession of the property should be handed over to the Income tax Department with a further direction that should the appellant ultimately succeed, the Department should re-convey the property to him for a sum of rs 13 lakhs and also deliver possession of the property without raising the plea that the rights of the third parties have intervened. Impliedly, the High court also permitted the Department to auction the property in accordance with the provisions of Ch. XX-C of the Act but of course subject to the limitation that in the event of the appellant succeeding they should not raise a plea that third party's rights have intervened.