Chittatosh Mookerjee, J. - (1.) The Life Insurance Corporation of India was previously the owner of premises No. 4A, Pollock Street, Calcutta, which contained 17 cottahs, 10 chittaks and 30 square feet of land together with several structures standing on portions thereof. The LIC had issued advertisement inviting offers for purchase of the said premises on 30th December, 1974. The LIC had agreed to sell the said premises to B. K. Chirimar, who was the karta of a Hindu undivided family, or his nominee for Rs. 5,04,077 or Rs. 29,000 per cottah whichever was more subject to a marketable title being made out by the vendors. Thereafter, B. K. Chirimar had nominated petitioner No. 1 as the purchaser of the said premises under the aforesaid agreement. On July 30, 1973, the LIC executed a conveyance in favour of petitioner No. 1 transferring the said premises for a consideration of Rs. 5,12,333.30.
(2.) On 18th February, 1974, the IAC of Income-tax, Acquisition Range-I, as the Competent Authority issued a notice under Section 269D of the I.T. Act, 1961, initiating proceedings for the acquisition of the said premises No. 4A, Pollock Street. The said proceedings for the acquisition of the aforesaid property is the subject-matter of challenge in the present rule obtained by the petitioners, inter alia, on the ground that the conditions precedent for the initiation of the said proceedings were absent. According to the petitioners, the Competent Authority had no material before it for forming his belief that the consideration for the transfer as agreed between the parties had not been truly stated with the object either of Clause (a) or of Clause (b) of Sub-section (1) of Section 269C of the I.T. Act, 1961.
(3.) The Competent Authority under Section 269C(1) of the Act may initiate proceedings for the acquisition of an immovable property when there was a transfer of the said immovable property either by way of sale or by way of exchange. Secondly, if the Competent Authority has reason to believe that: (i) the fair market value of the immovable property exceeds Rs. 25,000 ; (ii) the apparent consideration for the transfer is less than the fair market value; (iii) the consideration for such transfer as agreed has not been truly stated in the instrument of transfer ; (iv) the object of such untrue statement about the consideration for transfer was for- (a) facilitating reduction or evasion of the transferor's tax liability in respect of the income arising from such transfer, or (b) concealment of any income or money or other assets of the transferee which he ought to have disclosed for the purposes of the I.T. Act or the W.T. Act.;