Law:

Section:

Section 269UD of the Income-tax Act, 1961 - Purchase of immovable property by Central Government - Order by Appropriate Authority - Petitioners entered into an agreement for development and sale of a plot and submitted Form 37-I - Appropriate Authority issued show-cause notice under section 269UD(1) without disclosing material on basis of which it concluded understatement of cost - Notice was received by petitioners only on 15-2-1995 while they were expected to represent on 21-2-1995 - Further on date of hearing petitioners' application seeking permission to lead evidence in support of reply was not considered - Authority had not taken into consideration development and sale agreement which imposed many major restrictions so far as development was concerned as well as dent on property in nature of civil litigation on title of property - Whether petitioners were not given opportunity of hearing which was in violation of principles of natural justice - Held, yes - Whether since area where property in question was situated was totally a residential area, it was incorrect on part of appropriate authority to have compare it with property situated in a commercial area where prime government offices and courts were situated - Held, yes - Whether, resultantly, impugned order of pre-emptive purchase was to be set aside - Held, yes FACTS The petitioners entered into an agreement for development and sale of the entire plot situated at 'D'. In view of the said agreement, the petitioners were required to fill in Form 37-I under rule 48 of the IT Rules, 1962 intimating the respondent-department about the transaction and seeking necessary sanction for the delay. The department, however, after taking into consideration the contents of form, formed an opinion that the apparent consideration indicated in the form was totally understated or less than the market price and issued notice to the petitioners under section 269UD(1). The petitioners in reply submitted that the authority concerned was absolutely wrong in equating value of the property in question with the value of the property which was situated in area 'C' and the sale instances which were taken into consideration by…

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