APPU HOTELS LIMITED Vs. APPROPRIATE AUTHORITY

JUDGEMENT

(1.) THE petitioner has sought for a direction to the appropriate authority to grant to the petitioner a no-objection certificate under Section 269UL of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), in respect of the property comprising 2374/75000 undivided share of the land situated in No. 8, West Cott Road, Royapettah, Madras, bearing survey No. 904, R. S. 1279 and the office No. 3 in the first floor of the building known as "Gokhale Bhavan" with a sale plinth area of 2,374 square feet pursuant to the agreement of sale entered into by the petitioner and Royapettah Benefit Fund Ltd., the second respondent, dated June 6, 1990.

(2.) THE petitioner filed Form No. 37-1 seeking a no-objection certificate from the authority on June 20, 1990. THE petitioner also produced several documents along with that form. THE appropriate authority just before the expiry of two months from that date, on August 16, 1990, addressed a long letter to the petitioner stating therein that according to the authority there were several omissions in the form and also pointed out that there is breach of Chapter XX-C of the Act by the proposed vendor of the petitioner. It was asserted in that letter that the vendor of the petitioner had breached Chapter XX-C by having failed to obtain a no-objection certificate for transfer of 50 per cent. of undivided share to one Sunile Estates on February 29, 1988. THE authority, however did not choose to exercise its power of compulsory purchase ; nor did it grant a no objection certificate. It concluded its communication thus :

(3.) THE objective of Chapter XX-C is not to enable the Government to acquire properties free of any defect in title. THE object is only the limited purpose of ensuring that tax is not evaded. Powers are conferred on the authority to either direct compulsory purchase or to grant a no-objection certificate in cases where compulsory purchase is not warranted or is not thought to be in the interest of the law.