HANS RAJ AGARWAL AND ANR. versus CHIEF COMMNR. OF INCOME TAX AND ORS.

Citation: [2002] SUPP. 5 S.C.R. 648 · Decided: 20-12-2002 · Supreme Court of India · Bench: RUMA PAL · Disposal: Dismissed

Judgment (excerpt)

A 
B 
HANS RAJ AGARWAL AND ANR. 
v. 
CHIEF COMMNR. OF INCOME TAX AND ORS. 
DECEMBER 20, 2002 
[RUMA PAL AND B.N. SRIKRISHNA, JJ.] 
Income Tax Act, 1961-Chapter XX-C-Section 269-UC, 269-UD and 
2(47)-Purchase of immovable property by Central Government in cases of 
C transfer involving under valuation -Appropriate Authority passing purchase 
orders-High Court quashing the first purchase order-Challenge to the second 
purcl;ase order rejected..:_ Validity of-Held, in the circumstances of the case, 
High Court was right in rejecting the challenge to the second purchase order. 
One Land her sisters- agreed to sell certain property jointly owned 
D by them, to the appellants. L died before the conveyance deed was 
executed. On the basis of L's will, the executor entered into fresh 
agreement with appellants to sell L's one-third undivided share. Other 
siste.rs appointed appellants as their power of attorney, who sold 
demarcated portions of the property to their nominees. Subsequently, 
Chapter XX-C of Income Tax Act came into force which provided for the 
E compulsory purchase of immovable properties in certain cases of transfer 
by Central Government. Thereafter, appellants and the executor filed a 
joint statement under section 269-UC in Form 37-1 in respect of L's share. 
The Appropriate Authority did not accept the statement and passed a filing 
order refusing to exercise its power under section 269UD(I) or 269UL(3), 
F which was accepted hy the parties. The appellants and the executor then 
filed a second statement. The Appropriate Authority accepted the same 
and passed a purchase order for purchase of the property. Within a month 
the Central Government deposited the consideration amount and 
possession of property was handed over to it. Aggrieved, the appellants 
filed writ petition for setting aside of the purchase order. High Court 
G quashed the fir$t purchase order. The Appropriate Authority then passed 
a second purchase order. The appellants filed a writ application 
challenging the second purchase order. High Court rejected the same. 
Hence the present appeal. 
H 
The appellants contended that the first purchase order was issued 
648 
HANS RAJ AGARWAL v. CHIEF COMMNR. OF INCOME TAX 
649 
beyond the prescribed time; that in the second purchase order the A 
Appropriate Authority had wrongly purported to purchase a demarcated 
share in the premises which was neither the subject matter of agreement 
nor the statement filed under section 269-UC; that oral partition was 
impermissible in law; that complete transfer had taken place before 
Chapter XX-C came into operation in the State, thus the Appropriate 
Authority could not initiate proceedings in respect of L's property; that B 
the consideration amount reflected the true market value of the property; 
and that the Central Government had not deposited the consideration 
money nor paid it to the transferor. 
The respondents contended that it was not open to the appellants to C 
co'.!_tend that the first purchase order had been issued beyond the period 
of limitation since they had never raised this issue in the writ petition; 
that the appellants had accepted the 'filing order' of the Appropriate 
Authority and submitted a second statement without protest; that in terms 
of the direction issued in C.B. Gautam 's case the date of disposal of the 
appellants' first writ petition was to be taken as the date of filing of the D 
statement and, therefore, the Appropriate Authority had issued the second 
purchase order within the statutory period; that the appellants had 
admitted that the property had been orally partitioned between the three 
owners and also the sale deeds of the other two owners stated so; that the 
appellants had given up the argument that complete transfer had taken E 
place under Section 2(47) of the Act prior to coming into force of Chapter 
XX-C which had been recorded by High Court; that the documents on 
record and finding of the Appropriate Authority shows that appellants 
had not taken possession of L's share pursuant to the agreement of sale; 
that they had «=11tered into possession of demarcated portions of L's sisters' 
property after the execution of sale deeds by the appellants; that F 
Appropriate Authority had considered the material on record which 
showed that the stated consideration amount did not represent the true 
market \•alue of the property; and that the Central Government had 
deposited the purchase money with the Appro

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