Law:

Section:

Section 269D(1), read with section 269C and section 269UL(3), of the Income-tax Act, 1961 - Acquisition of immovable property - Preliminary notice - Whether in a case where while issuing notice under section 269D(1), competent authority had kept words 'and/or' between two objects of understatement of consideration, assumption of jurisdiction for acquisition would be invalid-Held, yes - Whether, in view of Circular F.No. 316/100/87-OT, New Delhi, dated 11-8-1988 issued by Board, where 'no objection' certificate under section 269UL(3) had been issued, proceedings for acquisition under section 269D(1) would be without jurisdiction - Held, yes FACTS The petitioners purchased the suit property for a sum of Rs. 30 lakhs and Form No. 37EE as required under section 269AB(2) and also Form No. 37-I were filed. A no objection certificate under section 269UL(3) was issued by the appropriate authority. However, later on, the IAC issued a notice under section 269D(1) to show cause why the proceedings to acquire the suit property under section 269C should not be initiated. The District Valuation Officer also issued a notice under section 269L. On writ: HELD A condition for assumption of jurisdiction under section 269D/269C is that competent authority at least prima facie holds that the consideration agreed between the parties is not shown truly in the sale agreement with the object of facilitating the reduction or evasion of the liability of the transferor or facilitating the concealment of income or assets of the transferee or both. In the present case, the competent authority had kept the words 'and/or' between the two objects of understatement of consideration. This indicated that the competent authority had not applied its mind at all as to whether the understatement was with the first object or the second object or both the objects. Moreover, as the no objection certificate had been issued under section 269UL(3) in response to the petitioners' application in Form No. 37-I, Circular F.No. 316/100/87-OT, New Delhi, dated 11-8-1988, issued by the Board was clearly applica-ble in this case. The circulars issued by the Board are binding on the departmental authorities. In the…

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