Law:

Section:

Section 269C, read with section 269D and section 269UL(3), of the Income-tax Act, 1961 - Acquisition of immovable properties - Proceedings for -Whether after issue of a no-objection certificate under section 269UL(3), it is open to the competent authority to initiate proceedings for acquisition under section 269C/269D - Held, no - Whether competent authority's not stating clearly in the notice as to whether object of understatement of consideration agreed upon in agreement is reduction or evasion of tax liability of transferor or transferee or both, vitiates notice - Held, yes FACTS An agreement was entered into between a society, builders and the petitioner- company under which the petitioner-company, in consideration of the society and builders allowing and permitting the petitioner company as developers' rights to develop the property in dispute and construct buildings thereon and a further right to sell and dispose of the flats/shops/offices and other premises so constructed, agreed to provide at its own cost 50 flats (each flat of the size of about 500 sq. ft.) to the society and pay Rs. 5 crores to the builders in the manner provided in the agreement. Initially the parties to the agreement filed a statement in Form No. 37EE(rule 48DD) on 26-8-1986 itself for registration under section 269AB(2). A statement in Form No. 37-I was also filed on 15-10-1986. Subsequently, the statement in Form No. 37EE was withdrawn on the ground that the agreement was that of development of land and not of sale. Certificate under section 269UL(3) was granted by the appropriate authority. The effect of the certificate was that the appropriate authority had no objection to the transfer of the property as per statement of Form No. 37-I. Subsequently, the competent authority initiated proceedings under section 269C read with section 269D on the grounds that (i) the apparent consideration exceeded Rs. 1 lakh, (ii) the apparent consideration was less than fair market value of the property which exceeded the apparent consideration by more than 15 per cent thereof; and (iii) the understatement of the consideration in the agreement was with the object of facilitating the reduction or…

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