COMMISSIONER OF INCOME-TAX Vs. HAZARI LAL

JUDGEMENT

(1.) IN these appeals the orders passed by the Income-tax Appellate Tribunal, Chandigarh Bench, in Acquisition Appeals Nos. 11 and 12 of 1979 have been challenged. In view of the similarity of the issues raised in the appeal, we are deciding them by a common order.

(2.) THE respondents in these appeals are transferees in respect of property bearing Khasra No. 1556, On the basis of proceedings initiated under Section 269f (6) of the Income-tax Act, 1961, the competent authority passed order dated July 19, 1978, for acquisition of the property. This order was set aside by the Tribunal and the cases were remanded to the competent authority for fresh decision. Thereafter the competent authority passed order dated June 12, 1979, sustaining its earlier order. During the pendency of the appeals an objection was raised on behalf of the respondent that the order of acquisition of property was bad because no notice was served upon the tenants in possession. The Tribunal accepted this objection and asked the competent authority to report within ten days whether tenancy existed at the time of initiation of acquisition proceedings. The competent authority submitted the remand report dated November 2/3, 1979. Thereafter the Tribunal heard the parties on the merits and accepted the contentions urged on behalf of the transferees.

(3.) THE orders passed by the competent authority show that the two sale deeds were executed in favour of the transferees, Hazari Lal son of Ram Sukh and Pirthi Singh son of Hazari Lal, for a sum of Rs. 30,000 each. According to the Valuation Officer, the total fair market value of the property would come to Rs. 1,04,700 against the stated consideration of Rs. 30,000. Vide Circular No. 455 (see [1986] 159 ITR (St.) 105), dated May 16, 1996, the Central Board of Direct Taxes decided that where the proceedings had been initiated by issue of notice under Section 269d, the same should be dropped if the apparent consideration of the immovable property was below Rs. five lakhs. In CIT v. Export India Corporation (Pvt.) Ltd. [1996] 219 ITR 461 and CIT v. Gobind Ram [1996] 221 ITR 892, this court held that the circular dated May 16, 1996, (see [1986] 159 ITR (St.) 105), would be applicable to the proceedings pending at the appellate stage as well, if the apparent consideration of the immovable property is below Rs. five lakhs.