M P PODDAR HUF Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) In this petition under Article 226 of the Constitution of India, the petitioners, owners of house property bearing Flat No.402, Adishwar Apartments, 34 Feroz Shah Road, New Delhi have challenged the order passed by the Appropriate Authority, respondent No.1 herein, on 31st December, 1997 in exercise of its powers under Section 269 UD(1) of the Income Tax Act, 1961 (For short the Act), directing purchase of the said property by the Central Government. Though in the petition various reliefs, including the quashing of the purchase order, have been sought but during the course of motion hearing on 30th July, 1998, learned counsel for the petitioners had confined the challenge only to the deduction made by the Appropriate Authority from the amount payable to the petitioners in terms of Section 269 UF by applying the principle of discounting as envisaged in Section 269UA (b) of the Act.

(2.) Shorn of elaborate details, the facts material for the purpose of this petition are as under:

(3.) The petitioners were owners of the aforementioned property. On 8th September, 1997 they entered into an agreement to sell the property to one M/s. Anantraj Industries Limited, respondent No. 3 herein, for a total consideration of Rs.1 Crore. On execution of the agreement, the purchaser paid Rs.25 lakhs to the petitioners. The balance consideration of Rs.75 lakhs was to be paid within 15 days from the date of issuance of no objection certificate under Section 269 UD(1) and the Income Tax Clearance Certificate (ITCC) in form 37-A under Section 230-A of the Act. On filing of the statutory statement of transfer in Form No.37-I on 19th September, 1997, after issuing show cause notice to the transferor and transferee and affording hearing, vide order dated 31st December, 1997 the Appropriate Authority ordered the purchase of the said property by the Central Government. Since in terms of Clause 14 of the agreement to sell, the balance consideration of Rs.75 lakhs was to be paid within 15 days from the date of issuance of no objection certificates in Form Nos. 37-I and 34-A, the Appropriate Authority discounted apparent consideration as per Rule 48-I of the Rules framed under Chapter XX-C and determined the total consideration for the sale of the property at Rs.96,87,500.00 as against the consideration of Rs.1 Crore, reflected in the agreement. Discounted consideration was worked out by discounting the balance consideration of Rs.75 lakhs from the date of the agreement i.e., 8th September, 1997 to 15th March, 1998, on the premise that the ITCC in Form 34-A would be issued after sixty days from the date of order under Section 269UD(1) i.e., 31st December, 1997 and thus, the balance consideration would be due to be paid to the petitioners only on 15th March, 1998 i.e., 15 days from the date of issue of ITCC. Hence the present petition.