R.L. Gulati, J. - (1.) THIS and the connected writ petition arise out of a common set of facts and involve a common question of law and they are, therefore, being disposed of by this common judgment.
(2.) THE petitioner No. 1, Sri U. S. Awasthi, is a practising advocate at Allahabad and petitioner No. 2 is his wife. THEy, along with some other persons, purchased bungalow No. 15, Sarojini Naidu Marg, Allahabad, together with the vacant land. THE petitioners purchased vacant land measuring about 6,000 sq. yards for a sum of Rs. 37,150.40, the price being Rs. 6.20 per sq. yard. THE vendors are Sri M. L. Dave, an Assistant Secretary in the Ministry of Defence, New Delhi, and Srimati Sudha Dave, widow of late Sri C. M. Dave. THE sale deed was executed and registered on 29th December, 1973. On 19th August, 1974, a notice under Section 269D(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), was issued to the petitioners by the Inspecting Assistant Commissioner of Income-tax, Acquisition Range, Lucknow. It was stated in the notice that the fair market value of the property exceeded the apparent consideration thereof by more than 15 per cent, and that the full consideration had not been shown in the sale deed, and, therefore, proceedings were being initiated under Section 269C of the Act for the acquisition of the aforesaid property. THE petitioners were required to file objection, if any, in writing, within a period of 45 days from the date of the publication of the notice in the Official Gazette or within a period of 30 days from the date of the service of the notice on them whichever period expired later. THE petitioners submitted a reply and later on filed the present writ petition on the ground that they were advised that the initiation of proceedings was wholly without jurisdiction and, as such, could be challenged by means of a petition. A large number of grounds have been raised but before dealing with these grounds it is necessary to notice the relevant provisions of law. Chapter XXA, covering Sections 269A to 2695, was added to the Act by the Taxation Laws (Amendment) Act, 1972 (Act No. 45 of 1972), with effect from 15th November, 1972. It provides for the acquisition of immovable properties in certain cases of transfer to counteract the evasion of tax. Section 296C provides : " 269C. Where the competent authority has reason to believe that any immovable property of a fair market value exceeding twenty-five thousand rupees has been transferred by a person...... to another person...... for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of- (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer; or (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922, or this Act or the Wealth-tax Act, 1957, the compentent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter: Provided that before initiating such proceedings, the competent authority shall record his reasons for doing so : Provided further that no such proceedings shall be initiated unless the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more then fifteen per cent, of such apparent consideration." Section 269D provides for a preliminary notice. Sub-section (1) says : " (1) The competent authority shall initiate proceedings for the acquisition, under this Chapter, of any immovable property referred to in Section 269C by notice to that effect published in the Official Gazette: Provided that no such proceedings shall be initiated in respect of any immovable property after the expiration of a period of nine months from the end of the month in which the instrument of transfer in respect of such property is registered under the Registration Act, 1908 (16 of 1908)..."
(3.) SUB-section (2) then provides that the competent authority shall cause a notice under SUB-section (1) in respect of any immovable property to be served on the transferor, the transferee, the person in occupation of the property, if the transferee is not in occupation thereof, and on every person whom the competent authority knows to be interested in the property. It also provides for the publication of the notice in the office of the competent authority by affixing a copy thereof to a conspicuous place and in the locality in which the immovable property to which it relates is situate by affixing a copy thereof to a conspicuous part of the property and also by making known in such manner as may be prescribed the substance of such notice at a convenient place in the said locality. Section 269E then provides for objections and Section 269F for hearing of the objections and for passing of a final order. It may be mentioned here that the competent authority has been defined in Section 269A to mean an Assistant Commissioner of Income-tax authorised by the Central Government under Section 269B to perform the functions of a competent authority under this Chapter, It is under these provisions that the impugned proceedings were initiated by the competent authority, namely, the Assistant Commissioner of Income-tax, Acquisition Range, Lucknow, on the ground that the fair market value of the property was more than Rs. 25,000 and the full sale consideration had not been shown in the sale deed. This, in the opinion of the competent authority, had been done in order to facilitate the evasion of tax by the vendors as well as by the petitioners.;