Delhi District Court
Bela Dalmia & Anr vs New Delhi Municipal Council on 27 September, 2022
DLND010008862016
IN THE COURT OF ADDITIONAL DISTRICT JUDGE- 01,
NEW DELHI DISTRICT, PATIALA HOUSE COURTS,
NEW DELHI
Presided over by :- MS. VIJETA SINGH RAWAT (DHJS)
HTA No. 202/16
Bela Dalmia & Anr.
......... Appellant
Versus
New Delhi Municipal Council,
Through its Chairman
Palika Kendra, New Delhi-110001
........ Respondents
Appeal instituted On : 29.03.2016
Arguments Concluded On : 26.07.2022
Judgment Pronounced On : 27.09.2022
HTA No. 202/16
Bela Dalmia & Anr. Vs. NDMC Page no. 1 of 9
JUDGMENT
1. By way of the present judgment, the Court proposes to decide the present appeal under Section 115 of New Delhi Municipal Council Act, 1994 (hereinafter, referred to as 'The Act'), by way of which, the appellant has sought modification of house tax assessment order dated 12.01.2016 qua property of appellants at 18 Golf Links, New Delhi (hereinafter referred to as "the Property") to be assessed at Rs.3,18,048/- less 10% w.e.f. 01.04.2001 to 31.03.2009 (which is the rateable value also fixed by the same order 01.04.1999 to 31.03.2001), instead of Rs.30,00,000/- less 10% i.e. Rs.27,00,000/- (which are fixed w.e.f. 01.04.2001 to 31.03.2009).
FACTUAL MATRIX
2. In brief, as per the title documents filed by the appellants, the property was owned by Sh. Purshottam Lal Sood, Pritam Lal Sood and Brij Bhushan Sood which was sold vide registered sale dated 01.04.1996 in the ratio of 2:3 to M/s. Shree Nirman Ltd. and M/s. Valley Agro Industries Ltd. As per the recitals of the aforesaid sale deed, at the time of execution of the same, the first floor of the property alongwith Barsati terrace, half of the servant quarters and garages were under the tenancy of Y.H. Dalmia (HUF) @ monthly rent of Rs.5000/-. Thereafter, vide four sale deed dateds 18.07.2001, Shree Nirman Ltd. sold its 2/5 undivided impartable share, interests and rights in four equal proportions HTA No. 202/16 Bela Dalmia & Anr. Vs. NDMC Page no. 2 of 9 for a consideration of Rs.11,00,000/- each to Sh. Y.H. Dalmia, Sh. Puneet Dalmia and the appellants who were part of the HUF. Thereafter, vide registered sale deeds dated 04.12.2009, the shares of M/s. Valley Agro Industries Ltd was equally sold to the appellants. Again, vide registered sale deeds dated 02.12.2010 Sh. Y.H. Dalmia and Sh. Puneet Dalmia sold their 10% undivided share in the property to appellants and thus, the appellants claim ownership over the suit property. A notice under Section 72 of The Act was issued to the then owners of the suit property 25.02.2002 and the same was replied on 21.03.2002. Thereafter, the matter was notified for hearing vide letter dated 15.09.2015 on 23.09.2015 and was eventually heard on 23.11.2015 after which, the impugned order was passed holding as under:
'.....Hearing for finalization of notice was fixed on 04.07.2014 Sh. S.C. Jindal Advocate and A/R of the purchaser of the property appeared. He has submitted a copy of authority letter dated 09.11.2015 and written submissions. He has no objection to the RV of Rs.318048/- less 10% proposed from 01.04.1999 vide notice dated 06.03.2000. Regarding proposed RV of Rs.30,00,000/- less 10% from 01.04.2001, he has submitted that proposal may be reviewed and RV may be fixed on prevalent market rent. The property has already been assessed under bye-law, 2009 from 01.04.2009.
The property has been purchased by M/s. Valley Agro Industries Ltd and the RV has been proposed for revision on market rent basis. There are two notices under Section 72 of NDMC Act which are producing. The 1 st one is on A/ rented basis which has to be decided as rented property whereas 2nd is at the time of purchase by the company M/s. Valley Agro Industries Ltd. The property owned by a company can not be treated as self-occupied and has to b e assessed on the basis of reasonable rent.
The prevalent market rent/ average rent in the year 2001- 2002 was Rs.33.80 and the total covered area of the property as per available record is under:
HTA No. 202/16Bela Dalmia & Anr. Vs. NDMC Page no. 3 of 9 Basement= 2708.24 Sq. Ft. GF = 4863.55 Sq. Ft. FF = 4834.69 Sq. Ft. Barasati = 1980.00 Sq. Ft. Mezz Fl. = 493.97 Sq. Ft. Extra Conopy= 73.1 Sq. Ft
'....By applying average rent Rs.33.80 and for basement i.e. Rs.16.90 the RV works out as under:
Basement = 2708.24 x 16.90 x 12 = 5493231/-
Total area of GF, FF, Barasati, Mezz & Conopy = 12245.31 Sq. Ft. 12245.31 x 33.80 x 12 = 4966697/-
Annual rent = 549231 + 4966697 = 5515928/-
RV Rs.5515928x0.9= Rs.49,64,335/- say Rs.49,64,300/-
Notice dated 25.02.2002 was proposed at a RV of Rs.30,00,000/- less 10% w.e.f. 01.04.2001 and after applying the average rent RV comes to Rs.49,64,300/- which is higher than the proposed RV. As Provision in the NDMC Act, 1994 the RV cannot exceed beyond the proposed RV. Accordingly, the Rs.30,00,000/- less 10% i.e. Rs.2,86,200/- w.e.f. 01.04.1999 and Rs.30,00,000/- less 10% i.e. Rs.27,00,000/- are fixed 01.04.2001 to 31.03.2009.
This shall dispose off the notices dated 06.03.2000 and 25.02.2002.' GROUNDS OF APPEAL
3. Being aggrieved by the assessment order, the present appeal has been filed on the following broad grounds.
a) The order has been passed without appreciating that the building is HTA No. 202/16 Bela Dalmia & Anr. Vs. NDMC Page no. 4 of 9 self-occupied from the beginning, there has been no change/ addition/ alteration in the building and the user has not been changed. Therefore, to assess the rateable value at approximately 10 times more than the rateable value fixed from 01.04.1999 to 31.03.2001 with no justification is totally arbitrary, discriminatory and unjustified.
b) The notice under Section 72 of The Act was dated 25.02.2002 and should have been settled in the same assessment year and any demand/ assessment order on its basis is time barred.
c) The basis for amendment is on market rent fetched by 28, Golf Links, Delhi but 28 Golf Link is better located and comparison with it is unjustified.
d) The respondent has also already assessed premises no.20, Golf Link, Delhi for the year 2003 @Rs.15 per sq. ft. amounting to annual rent of Rs.61,31,200/- and as such, bias has been alleged.
4. By way of reply, the appeal is assailed to be time barred. On merits, it is stated that when notice under Section 72 of The Act was issued, the property was under the co-ownership of the appellants and M/s. Valley Agro Industries Ltd and it is only in December 2010 that the appellants became absolute owners. Referring to proceedings dated 23.11.2015, it is stated that the counsel for the appellants had no objection to the rateable value fixed by the assessment order from 01.04.1999 to 31.03.2001 and requested for a review of rateable value from 01.04.2001 to be calculated at prevalent market rent. It is stated that even though on the prevalent market rent @Rs.33.80 per sq. ft., the HTA No. 202/16 Bela Dalmia & Anr. Vs. NDMC Page no. 5 of 9 rateable value would have been Rs.49,64,300/- yet, the same was fixed only Rs.30,00,000/- (less 10%).
FINAL ARGUMENTS
5. The Court has heard the final arguments by Sh. S.C. Jindal on behalf of the appellant and by Sh. Sanjay Sharma, on behalf of the respondent/ NDMC.
REASONING AND APPRECIATION OF MATERIAL ON RECORD
6. In order to appreciate the contentions of appellants, it would be appropriate to refer to the provisions of The Act. Chapter 8 of The Act provides for the manner in which tax has to be levied. The first Section (Section 60) of this chapter lists the various kinds of taxes which NDMC is entitled to levy. The property tax is one of the taxes for which further procedure is laid down in Section 61 to 81 of the Act. The detailed provisions are contained in this part of the Act but the charging Sections are 61 and 62 which lays down the foundation of the charge of property tax. It is Section 63 of the Act which is relevant for the present proceedings which is re-produced as under :
"......63. (1) The rateable value of any lands or building assessable to any property taxes shall be the annual rent at which such land or building might reasonably be expected to let from year to year less a sum equal to ten per cent of the said annual rent HTA No. 202/16 Bela Dalmia & Anr. Vs. NDMC Page no. 6 of 9 which shall be in lieu of all allowances for cost of repairs and insurance, and other expenses, if any necessary to maintain the land or building in a state to command that rent :
Provided that in respect of any land or building the standard rent of which has been fixed under the Delhi Rent Control Act, 1958 (59 of 1958) the ratable value thereof shall not exceed the annual amount of the standard rent so fixed.
(2) The rateable value of any land which is not built upon but is capable of being built upon and of any land on which a building is in process or erection shall be fixed at five per cent of estimated capital value of such land.'
7. The rateable value of the property is the most important feature which needs to be ascertained / determined before property tax is to be levied. If this value is assessed, rest is a mere calculation of tax liability in accordance with the prescribed rates. The rateable value is determined or say assessed every year, therefore for that year it is annual rateable value which is the root of assessment. The Act has provided ARV would be "annual rent at which such land or building might reasonably be expected to let from year to year less or sum equal to ten per cent of the said annual rent.
8. Section 70 of the Act provides that NDMC will publically notify its intention to change the ARV of the properties and provide an opportunity of being heard and thereafter, final assessment of ARV would be notified/ made. Considering all eventualities, Delhi Municipal Corporation (Determination of Annual Rent Bye-Laws 2009 were notified which provided for filing of self assessment of property tax by the tax payer. These Bye Laws contains detailed provisions to arrive at HTA No. 202/16 Bela Dalmia & Anr. Vs. NDMC Page no. 7 of 9 annual rateable value based on number of factors such as user type of structure, location as well as its age. It is relevant to refer article / item no. 2 of notification dated 24.02.2009 which is extracted as under :
'.....2. Determination of Annual Rent : For the purposes of sub- section (1) of section 63 of the New Delhi Municipal Council Act, 1993, the annual rent for which lands and Buildings are expected to let from year to year basis shall be determined as under :-'
9. As regards the ground that the demand of house tax is barred by limitation, since the issue is seized of by the Apex Court as appeal against order dated 23.03.2018 in Ved Marwah (Supra) is pending, this Court shall refrain from commenting on the same.
10. Apropos, the ground that the assessment has been done on market rent whereas the property was self-occupied, placing reliance upon State Trading Corporation India Ltd. vs. NDMC Civil Appeal No.2772 of 2009, this Court is of the view that the same is not sustainable. It can be observed that in paragraph no.11 of the aforementioned judgment, the Apex Court has held as under:
'.....As far as the category, where the building is self-occupied and where there is no sub-lease, the annual rent will have to be fixed as held by this Court in the case of Dewan Daulat Rai Kapoor (supra) and in the case of Indian Automobiles ltd. vs. Calcutta Municipal Corporation and another reported in (2002) 3 SCC 388 on the basis what the landlord might reasonably expect to get from a hypothetical tenant. Such fixation has to be made only as per the NDMC Act. It is for the assessing officer to make the fixation in accordance with law. The assessment for the disputed period shall be completed within three months from today.'
11. As regards, the choice of property no. 28 Golf Links, Delhi to HTA No. 202/16 Bela Dalmia & Anr. Vs. NDMC Page no. 8 of 9 assess comparative rent, it can be observed from the assessment order that the average rent/ prevalent market rent in the 2001-2002 @ Rs.33.80 per sq. ft. and Rs.16.9 per sq. ft. for the basement should have been the basis for assessment, yet the assessing officer only fixed the rateable value @Rs.30,00,000/- less 10% w.e.f. 01.04.2001. It has not been shown that property no.28, Golf Links, New Delhi would have fetched a lower annual rent. Even though the order mentions that the assessing officer was relying upon some provision in the Act that rateable value could not exceed proposed rateable value, Ld. Counsel for the respondent conceded that there was no such provision. Further, even though, Ld. Counsel for the appellant sought to rely upon order Section 70(6) dated 04.12.2003 for the year 2003-2004 qua property no.20, Golf Links, Delhi, it is also to be borne in mind that the specifications of the properties are materially different.
12. In the considered view of this Court, none of the grounds of appeal are sufficient to modify the assessment order dated 12.01.2016.
13. Hence, the appeal is dismissed.
14. The appeal is accordingly disposed off.
Pronounced in open Court (Vijeta Singh Rawat) on 27.09.2022 Additional District Judge-01, New Delhi District, Patiala House Courts, New Delhi HTA No. 202/16 Bela Dalmia & Anr. Vs. NDMC Page no. 9 of 9