Naveen Grah Nirman Sahkari Samiti Ltd. V. Union of India & Ors.

CW/9345/2015

AI Insights

The case involves Naveen Grah Nirman Sahkari Samiti Ltd., a cooperative society, which contested the acquisition of a property by the Union of India under Chapter XX-A of the Income Tax Act, 1961. The property was initially transferred by M/s Jai Marwar Company Private Limited to the petitioner for a consideration significantly lower than its market value, as determined by the Departmental Valuation Officer. The acquisition proceedings were initiated in 1985, and despite various appeals and petitions, the petitioner did not challenge the specific provisions of the Act under which the acquisition was made until much later. The High Court dismissed the writ petition, emphasizing that the petitioner had ample opportunity to contest the provisions earlier but failed to do so.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 817689 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 27-01-2016
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: JITENDRA MAHESHWARI
• Keywords: Acquisition Proceedings; Compensation; Market value; Penalty; Unjust enrichment
• Section: 269-F(6); 269-D; 269-J(1); 269-J(4)

Judgement Text

"-1- DB Civil Writ Petition No.9345/2015 Naveen Grah Nirman Sahkari Samiti Ltd. v. Union of India & Ors. Date of Order :: 27th January, 2016 HON'BLE MR.JUSTICE GOVIND MATHUR HON'BLE MS. JUSTICE NIRMALJIT KAUR Mr. Jitendra Maheshwari, on behalf of Mr. Sanjeev Johari, for the petitioner. .... M/s Jai Marwar Company Private Limited, incorporated under the Companies Act, through a sale deed dated 27.7.1984 transferred a chunk of land measuring 1,81,818 square yards located down hills the Umaid Bhawan Palace, Jodhpur to the petitioner, a cooperative society registered under the Cooperative Societies Act, against a consideration of Rs.24,45,452/-. The Departmental Valuation Officer attached with the Department of Income Tax determined market value of the property transferred as of Rs.1,20,91,000/-. On basis of the report given by the Departmental Valuation Officer, acquisition proceedings as per provisions of Chapter XX-A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961') were initiated on 15.3.1985. A notice as per Section 269-D of the Act of 1961 was issued and served upon the petitioner after recording necessary reasons. The competent authority by a detailed order dated 16.10.2002 ordered for acquisition of the property in question after taking into consideration the material available on record and after hearing the objections raised by the petitioner. The satisfaction recorded under the order aforesaid reads as follows:- -2- “(a) the immovable property bearing khasra No.421 situated between the Circuit House Jodhpur and Chhitar Palace (Umaid Bhawan Palace) and measuring 1,81,818 sq. yd is of a fair market value exceeding Rs.1,00,000/-; (b) the fair market value of the impugned property as on 1.02.82 exceeds the apparent consideration mentioned in the Registered Sale Deed by more than 15% of such apparent consideration. In fact, the difference between its fair market value and the apparent consideration would have been more if the date of execution of the instrument of transfer had been taken as on 27.07.84; and (c) the consideration for such transfer as agreed to between M/s JMCPL and M/s NGNSS has not been truly stated in the instrument of transfer with the object to facilitate the reduction and evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the said transfer, and also to facilitate the concealment of any income which ought to have been disclosed by the transferee for the purpose of the Income-tax Act, 1961. I, therefore, order the acquisition of the said impugned property by the powers vested in me by Chapter XXA of the Income-tax Act, 1961.” The appeal preferred by the petitioner society giving challenge to the order dated 16.10.2002 came to be dismissed under an order dated 25.4.2003 passed by the Income Tax Appellate Tribunal, Jaipur. The appeal preferred before Rajasthan High Court at its Jaipur Bench giving challenge to the order dated 25.4.2003 also came to be dismissed on 28.3.2011. A Special Leave Petition to Appeal -3- the order passed by the Rajasthan High Court affirming the order dated 25.4.2003 also came to be dismissed by Hon'ble Supreme Court of India on 29.7.2011. A review petition preferred was also dismissed by the Apex Court on 14.8.2012. A Curative Petition then preferred by the petitioner was also dismissed on 23.7.2013. Prior to it, on 8.8.2011 the competent authority called upon the petitioner to hand over and deliver possession of the property and also to receive compensation as per provisions of Section 269-J of the Act of 1961. The society instead of accepting the compensation conveyed to the competent authority under a letter dated 10.8.2011 that the land in question has been divided in 578 plots and those were allotted to its members, therefore, the possession of the land is required to be taken from the allottees and further compensation is also required to be given to those allottees. It was informed to the petitioner society under a letter dated 18.8.2011 that the competent authority has released a draft against compensation and that is to be drawn within a period of seven days, but no initiative was taken by the petitioner to draw the same. The petitioner society ultimately in the year 2014 preferred a petition for writ before this Court to reassess the compensation payable and further to allow interest thereupon @ 12% per annum. The writ petition came to be dismissed as withdrawn with liberty to avail appropriate remedy vide order dated 23.2.2015. After dismissal of the writ petition the petitioner society claimed that imposition of penalty in a tune of Rs.92,78,730/- against the property worth several hundred crores is nothing but an unjust enrichment for Income Tax Department. In the month of August, 2015 the -4- petitioner society received a notice from learned District Judge, Jaipur Metropolitan to the effect that a demand draft for a sum of Rs.28,12,270/- has been deposited by the Government to deliver the same to the petitioner society as compensation of the land acquired. After receiving the notice the instant petition for writ is preferred to question constitutional correctness of the provisions of Section 269-J(1) of the Act of 1961. As per the petitioner the provisions of Section 269-J(1) of the Act of 1961 is in contradiction with the provisions of Section 269-J(4) as that imposes a penalty beyond the legal permissibility. The petitioner has also challenged the levy of penalty being exorbitant and also 'unjust enrichment'. Heard learned counsel. At the threshold we would like to mention that the proceedings under Chapter XX-A of the Act of 1961 were initiated against the petitioner society in the year 1985. The petitioner society participated in the proceedings, raised the objections and a necessary order as per Section 269-F(6) of the Act of 1961 was passed on 16.10.2002. The petitioner never questioned validity of the provision in which proceedings were initiated and were to be dealt with. The petitioner, if had any genuine grievance with the provisions of Section 269-J(1) of the Act of 1961, then validity of the same should have been challenged immediately on initiation of the proceedings under Chapter XX-A of the Act of 1961. The petitioner never agitated this -5- cause before any legal forum, though the order passed by the competent authority was also subject matter of an appeal before the Income Tax Appellate Tribunal and then before the High Court. A Special Leave Petition was also filed before the Apex Court, but while availing these remedies also the petitioner never agitated the cause which is subject matter of present writ petition. We are of considered opinion that after getting the entire issue threshed as per Chapter XX-A of the Act of 1961, it is not open for the petitioner now to challenge the validity of the provision concerned. In view of it, we are not inclined to examine merits of the issue agitated in this writ petition. The writ petition is dismissed accordingly. (NIRMALJIT KAUR),J. (GOVIND MATHUR),J. kkm/ps "