SHREYAS BUILDERS Vs. M D KODNANI

JUDGEMENT

(1.) THESE two petitions take exception to the same order passed by the appropriate authority under section XX-C of the Income-tax Act. Therefore, both these petitions can be conveniently disposed of by a common judgment.

(2.) THE facts that are material and relevant for deciding the petitions are as follows : The petitioners in writ petition No. 2818 of 1994 are the owners of land survey No. 89-90-91/2 C. T. S. 1325 admeasuring about 857. 48 sq. meters situate at Parvati, Pune. By an agreement dated 30th April, 1992, the owners of the land agreed to sell that land to M/s Shreya Builders, who is petitioner in writ petition No. 1918 of 1993. It appears that the appropriate authority made an order dated 31st july, 1992 for compulsory purchase of the property under section 269-UD of the Income Tax Act. That order was challenged before this court by filing writ petition No. 348 of 1993 by the transferees, who are petitioners in writ petition No. 1918 of 1993 on the ground that the order was passed without giving any opportunity of being heard to the petitioners in that petition and without assigning any reason for making the order. Writ Petition No. 348 of 1993 was disposed of by this court by its order dated 26th february, 1993. This court set aside the order of the compulsory purchase made by the appropriate authority relying on the judgment of the Supreme Court in the case of c. B. Gautam vs. Union of India and ors. in (1993) 199 ITR 530. It appears that thereafter, the appropriate authority issued show cause notice dated 3rd March, 1993 asking the petitioners in both these petitions to show cause as to why the property should not be purchased under Chapter XX-C of the Income Tax Act. This show cause notice did not disclose material on the basis of which the appropriate authority reached the tentative conclusion that the transaction has been undervalued and therefore the transferees addressed a letter to the appropriate authority dated 10-3-1993 making a grievance that in the show cause notice reasons for reaching the tentative conclusion that the transaction has been undervalued have not been disclosed. A grievance was made that in the absence of this material being disclosed the petitioners are not in a position to show cause effectively. There was no response, therefore, another letter dated 18-3-1993 was addressed making the same grievance. Still neither the reasons were disclosed nor was the material on the basis of which the show cause notice was issued supplied, however, an explanation was submitted to the show cause dated 23-3-1993. Thereafter, the appropriate authority made an order dated 28-4-1993 for compulsory purchase of the property. It is this order, which is impugned in this petition.

(3.) THE learned counsel for petitioners relying on the judgment of the Supreme Court in C. B. Gautam case referred to above as also the judgment of the Division Bench of this court in the case of Nirmal L. Grover vs. Appropriate authority, 1995 Tax L. R. 355, submitted that the order of compulsory purchase impugned in this petition is liable to be set aside, because the show cause notice itself is defective. He submits that the appropriate authority was obliged to disclose the reasons on the basis of which it reached the tentative conclusion that the transaction was undervalued, as also the material on the basis of which this tentative conclusion was reached.