Income Tax Appellate Tribunal - Jaipur
Naveen Grah Nirman Sahakari Samiti vs Competent Authority on 25 April, 2003
Equivalent citations: (2005)92TTJ(JP)119
ORDER
Satish Chandra, J.M.
1. This is an appeal filed by the assessee against the order dt. 16th Oct., 2002 passed by the Competent Authority under Section 269F for acquisition of the land.
2. First of all, the Department raised the preliminary objection regarding the jurisdiction of the Tribunal, Jaipur Bench. It was submitted by learned Departmental Representative that the jurisdiction lies at Jodhpur, where the land is located. But it was opposed by learned Authorised Representative.
3. By considering the totality of the facts and circumstances, it appears that in the instant case, the order under Section 269F(6) of the IT Act was passed at Jaipur. Both the parties have the addresses at Jaipur. The appellant Samittee is assessed at Jaipur. Cause of action has arisen at Jaipur as the approval was obtained from the CIT-I, Jaipur. In these circumstances, we are of the view that this Bench has the jurisdiction to decide the case. So we dismiss this preliminary objection raised by the Department as was announced on 21st March, 2003 in the open Court.
On merits:
4. In the instant case, the assessee has taken 10 main grounds with a number of sub-grounds, but the entire grievance is related to the validity of impugned order as well as the acquisition proceedings started by the Competent Authority pertaining to Khasra No. 421 located between Circuit House and Chhitar Palace (Umaid Bhawan Palace), Jodhpur.
5. From the bulky material and brief history pertaining to this piece of land appears that his highness late Shri Gaj Singhji transferred the land of Khasra No. 421 to M/s Jodhan Real Estate Development Co. (P) Ltd. On 5th Nov., 1971, M/s Jodhan Real Estate Development Co. (P) Ltd. sold this land to four parties and one of them was M/s Jai Marwar Co. (P) Ltd. who purchased a piece of land for a consideration of Rs. 9,60,000 only. Total area of this piece of land was consisting of 1,81,818 sq. yards. M/s Jai Marwar Co. (E) Ltd. (hereinafter known as M/s JMCPL) has again sold this piece of land to the appellant i.e., M/s Navin Grah Nirmam Sahakari Samiti, Jodhpur, in short "appellant Samiti/Society" vide sale deed submitted before the registration authority on 1st Feb., 1982 for a consideration of Rs. 24,45,452. It was alleged by the appellant that this sale deed was in pursuance of the unregistered sale agreement dt. 2nd Oct., 1974 where an advance of Rs. 10,100 was given in cash. Before coming to the issue, it may be mentioned that the said piece of land was always in the litigation.
6. Firstly, when His Higness Shri Gaj Singhji transferred the said piece of land to M/s Jodhan Real Estate Development Co. (P) Ltd., the then Collector of Jodhpur issued notice under Section 9A of Rajasthan Land Owners and Acquisition of Land Owners Estate Act, 1964, and started the proceedings for the acquisition of the land by stating that the said land belongs to the State and any subsequent transaction/transfer were null and void. So the Collector, Jodhpur, ordered that the possession of the said piece of land should be delivered to SDO, Jodhpur, before 29th Nov., 1975. However, a writ petition was filed in the Rajasthan High Court where the Single Judge Bench vide his order dt. 22nd Sept., 1977 held that the acquisition notice of the Collector was bad in law and the same was quashed. However, the Government of Rajasthan preferred an appeal in the Division Bench of the Rajasthan High Court who decided that the acquisition proceedings were validly initiated by the Collector. The Division Bench has overruled the order of the Single Judge Bench, but it was challenged in the Supreme Court. The Hon'ble Supreme Court vide its order dt. 28th Feb., 1989, upheld the decision of the Single Judge Bench by setting aside the order of the Division Bench. In other words, the Supreme Court upheld that the land belongs to His Highness Gaj Singh and its subsequent transfer is valid.
7. In the meanwhile, the Government of Rajasthan has started the proceedings under the Urban Land (Ceiling & Regulation) Act, 1976, for acquiring the said land. The appellant M/s Naveen Grah Nirman Sahakari Samiti Ltd. has challenged it in the Hon'ble High Court. Finally, the Hon'ble High Court dismissed the case vide its order dt. 19th Nov., 1999 on the ground that the Urban Land (Ceiling & Regulation) Act, 1976, has since been repealed , so the petition has become infructuous. In other words, the said land was declared exempted from the Ceiling Act.
8. From the record, it appears that pertaining to the said piece of land (Khasra No. 421) located at Jodhpur Municipality, matter also reached to the Supreme Court in the public interest litigation. The Supreme Court vide its order dt. 28th Oct., 2002, allowed the SLP in favour of Shri Paras Chand Khinvsara where it was declared the. said piece of land cannot be included in "no construction zone" in exercise of the powers under Section 171 of the Rajasthan Municipal Act. So the Supreme Court set aside the impugned notification of the State Government relating to K-421 as well as the order of the High Court. Finally, the said piece of land (K 421) has become free from all the litigation by the final order of the Supreme Court dt. 28th Oct., 2002.
9. With this background, we heard both the parties for a number of days and gone through the bulky material on record. Both the parties have filed written submissions and their counters along with the list of case laws. The appellant almost raised the similar objections which were already submitted before the acquisition authority.
10. Learned Authorised Representative, Sri N.M. Ranka, senior advocate starts the argument by mentioning the history of the case that M/s Jodhan Real Estate Development Co. (P) Ltd., who has purchased the land from H.H. Gaj Singh Ji, further sold the land to four parties, namely, (1) Prajapati Grah Nirman Sahakari Samiti Ltd.
(2) Adhunik Grah Nirman Sahakari Samiti Ltd.
(3) Adhunik Grah Nirman Sahakari Samiti Ltd.
(4) Jai Marwar Company (P) Ltd.
There was no dispute regarding the first three housing societies. However, the piece of land consisting of 1,81,818 sq. yards was transferred to M/s Jai Marwar Co. (P) Ltd., Jodhpur, for a full consideration of Rs. 9,60,000 on 5th Nov., 1971 who further transferred it to appellant Samiti for a consideration of Rs. 24,45,452 as per the original agreement dt. 2nd Oct., 1974 and registered deed which was presented before the registration authority on 1st Feb., 1982. The said sale deed was registered on 27th July, 1984.
11. But, on receiving the information from the Registrar, the IT Department referred its valuation to the DVO. The DVO, vide his report estimated the market value of this property at Rs. 1,20,91,000 as on 27th July, 1984 when the transfer was made by way of registration. The Department opined that the difference was more than 15 per cent between fair market value and the sale consideration shown by the parties in the registered sale deed as on 27th July, 1984. So, the acquisition proceedings were initiated by the IT Department under Chapter XX-A of the IT Act on 15th March, 1985, after recording the reasons and satisfaction. The appellant raised the various objections against the initiation of acquisition proceedings. But, finally the acquisition officer by his impugned order dt. 16th Oct., 2002, set aside all the objections raised by the appellant and acquired the property in question with the approval of the CIT-I, Jaipur, dt. 8th Oct., 2002. Being aggrieved, the appellant is before the Tribunal to seek justice.
12. In this context, learned Authorised Representative submitted that M/s Jodhan Real Estate Development Co. (P) Ltd. sold the land to four parties including three group housing societies, but there was no dispute regarding these group housing societies and the acquisition proceedings was started only against the appellant-society who purchased the land from the fourth party, namely, M/s Jai Marwar Co. (P) Ltd., Jodhpur. It amounts to discrimination under Art. 14 of the Constitution. He further submitted that the appellant is a co-operative group housing society duly registered under Rajasthan Cooperative Societies Act, 1965, vide Registration No. 1137/Q, dt. 7th April, 1971. It works under the control and supervision of Registrar of Co-operative Societies in Rajasthan. At the same time, M/s Jai Marwar Co. (P) Ltd. is a private limited company which was incorporated in the asst. yr. 1971-72 under the Indian Companies Act. It has been filing its income regularly. It filed return for the asst. yr. 1985-86. The recorded value was accepted after the appeal as the sale consideration.
13. The learned Authorised Representative objected by mentioning that the appellant submitted the application dt. 10th Nov., 2002, before the respondent for seeking the certified copies of the documents detailed therein. But the said copies/materials were never supplied to the appellant which is in violation of principle of natural justice.
14. The learned Authorised Representative submitted that the appellant has purchased a piece of land from M/s Jai Marwar Co. (P) Ltd. as per the agreement dt. 2nd Oct., 1974 for a sale consideration of Rs. 24,45,452. The sale deed was executed on 1st Feb., 1982. The seller company applied for the income-tax clearance certificate under Section 230A of the Act vide application filed on 14th Jan., 1982. The ITO after verification and complete satisfaction issued the said certificate. However, the Sub-registrar, Jodhpur, registered the sale deed on 27th July, 1984 by determining the market value at Rs. 24,45,452. Additional stamp duty was deposited by the appellant. Shri N.M. Ranka, the senior counsel for the appellant, further submitted that the acquisition proceedings, is penal in nature and quasi-criminal, which requires the strict compliance of the law. In the instant case, the notice was issued to the appellant, but notices were never issued to the plot allottees in whose possession the plots were there as per allotment. Presently, appellant is not in possession of the said plots. Thus, the members of the society to whom the plots were allotted became the interested persons as per Section 269A(g) which runs as under :
"'Person interested', in relation to any immovable property, includes all persons claiming, or entitled to claim, an interest in the compensation payable on account of the acquisition of that property under this Chapter."
So, he said that the whole acquisition proceedings is null and void. In this context, he submitted that one Shri Paras Chand Khinvsara was recognised as the owner of the plot by the Hon'ble Supreme Court in its order dt. 28th Oct., 2002. Thirty-seven members of the society who were in possession of the plots were made the parties before the High Court in the Writ No. 101/1986. So, in the absence of notices to the interested parties, the whole proceeding is ab initio null and void. He, further, submitted that it is wrong on the part of the Department to say that none of the members has filed appeal against the impugned order under Section 269F, taking the objection that notice under Section 269D(1) was served on him. Whereas the respondent served the impugned order on Shri Rajeev Balani s/o Shri J.K. Balani who has preferred an appeal. The said appeal is still pending before the Tribunal, Jodhpur Bench.
15. Taking another aspect, the learned Authorised Representative submitted that the valuation by the DVO was imaginary, unreal who failed to take the comparable "land cost" which were sold. The assessee was not granted an opportunity of cross-examination for rebutting the said report of the DVO. For the purpose, he relied on the ratio laid down in the following cases :
I. Krishna Kumar Rawat v. Union of India (1995) 214 ITR 610 (Rai) In this case, it was observed that in respect of land, comparable cases provide the better guidance. The comparable cases could be what are in respect of the land having similar character is in the proximity of the land under agreement having similar advantage and amenities. The proximity in time is also an important factor in such type of cases. The location, frontage, transport facilities and other amenities besides the size of the plot are relevant consideration.
II. In the case of Forbes Forbes Campbell v. Nishan Ahmed, IAC and Anr. (1996) 217 ITR 103 (Bom), Hon'ble, Bombay High Court observed that the initiation of the proceedings by the Competent Authority was without jurisdiction, because there was no material whatsoever to come to the conclusion that the consideration for transfer in the agreement was not truly stated and, therefore, with the object of facilitating the reduction or evasion of the liability of the transferor in respect of payment of tax.
III. In the case of Competent Authority v. Smt. Lalita Todi (1997) 225 ITR 665 (Pat), Hon'ble Patna High Court observed that the proceedings under Chapter XX-A of the IT Act cannot be initiated unless the fair market value exceeded the apparent consideration by more than 15 per cent. Before initiating the proceedings under Section 269C, the Competent Authority must record the valid reasons for its proposed action as the term "has reason to believe" in Section 269C would show. The estimate of the Competent Authority must not be arbitrary. The fair market value is the best price which a vendor can reasonably obtain in the circumstances of a particular case. What is required to be done for the ascertainment of such market value is to ascertain the price, which a willing, reasonable and prudent purchaser would pay for the property.
IV. In the case of CIT v. Duncans Agro Industries Ltd. (1991) 192 ITR 310 (Del), the Hon'ble Delhi High Court has observed that for the acquisition of immovable property, provisions are to be applied strictly. Failure to take into account important factors such as instances of sale of properties situate in same locality, applicability of land ceiling law if superstructure razed to ground for rebuilding, unearned increase payable to land and development office.
16. Thus, the learned Authorised Representative submitted that in the instant case, the DVO has not taken the true comparative cases. The DVO should have adopted belting method being vast tract of undeveloped land. He might have considered that the said land was in dispute under various litigation. Thus, he challenged the validity of the DVO's report.
17. The learned Authorised Representative further took a different aspect regarding unregistered original agreement dt. 2nd Oct., 1974. He submitted that for the transfer of the land, agreement was made in the year 1974. The same was, of course, unregistered. For this purpose, he submitted that the Rajasthan Urban Property (Restriction of Transfer) Act, 1973, was in operation where the agreement for sale being for more than Rs. 3 lakhs could not be registered. The ceiling authority found the said agreement as a valid agreement on 7th July, 1981. On query from the Bench, the learned Authorised Representative expressed his inability to produce the original agreement by submitting that the same was filed before jurisdictional High Court in the writ petition and the original agreement is not available.
18. He, further, submitted that the appellant allotted Pattas to its members and gave possession to allottees. A sum of Rs. 27 per sq. yard was collected being cost for the land, development and other expenditure to be incurred. The said allotment is as per the resolution passed by the appellant Samiti and it stands established that the said allottees received the possession prior to the execution of the sale deed.
19. The learned Authorised Representative took another aspect by submitting that the transferor company had a meeting of its board of directors on 1st Aug., 1974, wherein, powers were conferred on the specified directors to negotiate and to enter into sale transactions. The objector Samiti (appellant), was in need of land for its members to achieve its sacred objectives. After passing the resolution, agreement was entered into on 2nd Oct., 1974, which was, of course, a holiday being the birthday of Mahatma Gandhi. A sum of Rs. 10,100 was paid by cash towards sale consideration. The rate was settled on the said date at Rs. 8 per sq. yard. Thus, the increase in rate from 1971 to 1974 was at Re. 1 per sq. yard. The balance consideration was to be paid within 120 days. However, it was provided that Re. 1 per sq. yard will be additional cost over a year on account of delay on the part of the appellant Samiti. Possession was given, and authority was conferred on the Samiti i.e., appellant to do levelling, cleaning, demarcation as also to allot the plots by demarcation to its members. The said agreement was signed by the managing director, directors of the seller/transferor company and Shri Kundan Mal Jain, president of the housing society i.e., appellant. So he said that the agreement dt. 2nd Oct., 1974, was the real and genuine agreement. The sale deed was presented for the registration before the registering authority on 1st Feb., 1982 along with the registration charges. But the registering authority did not register on account of various litigation and on account of stay granted by the Division Bench of the Rajasthan High Court. After the permission of the Division Bench, the document was registered on 27th July, 1984. However, on account of Section 47 of the Indian Registration Act, it relates back to the date of agreement dt. 2nd Oct., 1974. To support his plea, he placed reliance on the following case laws:
Mahrani Yogeshwari Kumari (1995) 213 ITR 541 (Raj) CIT v. Moimasji Mancharji Vaid (2001) 250 ITR 542 (Guj), where it was held that the transfer is effective on the date of execution of the document of transfer and not either on the date of presentation or on the date on which registration is applied. He further relied on the ratio laid down by Supreme Court in the case of Gurbux Singh v. Kartar Singh (2002) 254 ITR 112 (SC), where it was observed that due to Section 47 of the Registration Act, a document on subsequent registration will take effect from the time when it was originally executed and not from the time of registration. The learned Authorised Representative also relied on the ratio laid down in the case of Rajasthan Patrika v. Union of India and Ors. (1995) 213 ITR 443 (Raj) and M. Shyam Lal Rao v. CIT (1998) 234 ITR 140 (AP).
20. The learned Authorised Representative continued to pointing out the technical defects by submitting that the appellant has given to the acquisition authority the full names and complete addresses, registration number and details of the members to whom the land was allotted. But no notice was given by the acquisition, authorities to the said allottees.
21. According to learned Authorised Representative, there was no reason to believe as required under Section 269C before issuance of the notice under Section 269D(1) of the IT Act, dt. 15th March, 1985. Thus, entire proceedings are illegal, without jurisdiction and null and void, non-existent in law and deserves to be quashed forthwith. The notice under Section 269D(1) of the Act dt. 15th March, 1985, claimed to have been published in the official gazette is illegal, void and deserves to be quashed for the reason that it was never supplied to the appellant. The notice does not contain complete description of the land in question though the complete details stand recorded in the sale deed. The notice contains the expression "and/or" in respect of the object and it is a serious illegality. For this purpose, he has drawn our attention to the copy of the notice. According to the learned Authorised Representative, in the notice full and complete addresses of the appellant Samiti was not given though the sale deed contains complete addresses. Such non-mention of the address caused substantial delay in service. The notice is purported to be dt. 15th March, 1985, but was served on Shri Bhanwar Lal, one of the members of the executive committee as late as on 13th June, 1986, i.e., after 15 months. On technical side, the learned Authorised Representative further submitted that the said notice was not published within 9 months. If it has been published within 9 months, such Gazette should have been made available to the public and specially the appellant Samiti within 9 months. Copy of the said Gazette was never provided to the appellant in spite of repeated requests. He also submitted that there is a violation of Section 269D(2)(i) for the reason that the service or notice is mandatory on the concerned (interested persons) as per the ratio laid down by Allahabad High Court in the case of CIT v. Phoolwati Devi (1983) 144 ITR 954 (All).
22. Lastly, he submitted that the appellant has furnished all the information sought by the Competent Authority time to time and fully co-operated, but there was long delay of more than 16 years in completion of the proceedings which is enough to vitiate the acquisition proceedings.
23. On the other hand, the learned special counsel appointed by the Department, Shri S.N.L. Agarwal along with learned Departmental Representative Sri D.S. Chopra, CIT, fully supported the order of acquisition authority passed under Section 269F. He submitted that the delay was due to various litigations. He has given the details of acquisition proceedings by submitting that the acquisition proceedings were immediately started on 13th March, 1985, soon after receiving the report from the Valuation Officer. He tried to explain every event pertaining to the acquisition proceedings under Section 269D(1) chronologically, which may be summed up as under:
Acquisition proceedings under Section 269D(1) in the case of Naveen Greh Nirman Sahakan Samiti Ltd. & Jai Marwar Co. (P) Ltd.
Date of hearing Appearance Subject-matter 13-3-1985 Report from Officer received Valuation P.R. No 136. July. 1984 report.
19-6-1985 Letter put up for signature for sending to ADI. Jodhpur.
25-10-1985 Displayed one copy of
(i) Notice under s. 269D(1) on notice board.
(ii) Notice under s. 269D(2) is put up for signature for sending to the transferor/transferee.
(iii) Notice under s. 269D(2) issued 9-12-1985 Letter put up for signature of ADI. Jodhpur 26-2-1986 Letter put up for signatures regarding service of notice under s. 269D(2).
26-2-1986 Reminder sent and also talked on telephone 26-2-1986 Intimated on telephone to Shri K.K. Shukla.
14-3-1986 Acknowledgement slip of service of notices under s. 269F(1) received and placed on file.
3-1986 Notices under s.
269D(2) are put up for signatures for sending the transferor/transferee.
Notice for hearing put up for signatures.
13-6-1986 Present Shri B.L. Goyal. Ex. member of Society.
Filed adjournment application. Also served with notice under s 269D(1) along with valuation report today 16-6-1986 Put up notice under s. 269F(1) for signatures.
3-7-1986 Intimation of case adjourned is put up for signatures 18-7-1986 Notices under s. 269F(1) dt 5-8-1986 are put up for signatures.
5-8-1986 Shii G.D. Rathi, CA attended Requested for adjournment and adjourned to 14-8-2003.
14-8-1986 Shri O.D. Rathi, CA attended Requested for adjournment. Case adjourned to 28-8-1986.
28-8-1986 Shn S.S. Bhandail, CA attended Case partly heard. Adjourned to 11-9-1986 11-9-1986
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Adjournment application received. Case adjourned to 23-9-1986 29-9-1986 Shri Sohanlal attended Case adjourned to 30-9-1986 on his request.
17-11-1986
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Notice under s. 269(F) for 28-11-1986 are put up for signatures.
12-12-1986
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Notice under s.
269F(1) are put up for signature.
2-1-1987
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Notice under s.
269F(1) issued for 13-11-1987.
13-11-1987 Attended Shri Kirorilal Mehta Site inspected. Explanation filed 13-11-1987 Attended Shri Mukan Singh, Secy.
Adjournment application filed. Case adjourned to 30-1-1987.
17-2-1987
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Notice under s.
269F are put up for signatures (for 27-2-1987) 27-2-1987
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Notice under s.
269F are put up for signatures (for 13-3-1987) 13-3-1987 Attended Shri Sohanlal Case partly heard. Case adjourned to 27-3-1987.
27-3-1987
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Case adjourned to 6-4-1987 6-4-1987
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Absent.
14-4-1987
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Notice under s.
269F are put up for signature ........87
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Notice under s.
269F are put up for signature (for 28-5- 1987) 27-7-1987
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Notice under s.
269F are put up for signature (for 10-8-1987) 10-8-1987 Attended Shri G.G. Mundra CA Case partly heard. Case adjourned to 21-8-1987 on his request.
21-8-1987 Do Requested for adjournment. Hearing adjourned to 28-8-1987 14-9-1987 Do Notice for hearing under s. 269F and summons under s. 131 for 24-9-1987 are put up for signature.
25-9-1987 Attended Shri G.G. Mundra, CA Requested [or adjournment. Hearing adjourned to 15-10-1987.
16-10-1987 Do Requested for adjournment. Hearing adjourned to 3-11-1987.
28-1-1988
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Notice issued for hearing under s. 269F for 15-2-1988.
15-2-1988
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Not present. Again issued notices under s. 269F for 16-2-1988.
1-3-1988 Attended Shri Bhanwar Lal Goyal. Ex. Member Applied for adjournment.
Case adjourned to 11-3-1988. Inquiry report of Registrar Co-op. Societies received and letter issued to party (show cause).
11-3-1988 Attended Shri B.L. Goyal. Ex. Member with Shri G.G. Mundra.
Letter dt. 11-3-1988 filed along with enclosures. Asked to file detailed history enumerating the sequence of events. Case adjourned to 17-3-1988.
-4-1992
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CIT. Jaipur's letter vide No. CIT/JPR/8/1992-93/64 dt. 23-3-1992 regarding pendency of acq. cases received. Put up for sending Information to CIT.
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Note sheet put up for fixing the case for hearing.
28-4-1992
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Note sheet put up
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Directed to inform the earlier position 29-4-1992
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Letter put up for signatures for sending toCIT.
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Letter put up for signatures for sending to Shri G.G. Mundra CA, 4-8-1992 Attended Shri G.G. Mundra CA Case adjourned to 10-8-1992 at 12.00 a.m. 4-8-1992
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Letter for sending to CIT is put up for signature.
12-11-1992
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Letter put up for instructions.
16-11-1992
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Note sheet put up.
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A. Letter issued to
(i) Registrar, H.C. Jodhpur.
(ii) ITO (HQrs.), Jodhpur.
B. Notices under s. 269 issued for hearing on 9-12-1992.
9-12-1992
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On request of the president of the society, hearing adjourned to 21-12-1992.
21-12-1992 Present Shri K.M. Jain. President of the society and Shri G.G. Mundra. CA Case adjourned to 18-1-1993 21-12-1992 Present Shri G.G. Mundra, CA. Shri K.M Jain. President along with Shri Navin Dangi. Representative.
Submitted photostat copies as per details on older sheet dt.
21-12-1992 Case fixed for 18-1-1993.
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Note sheet put up.
5-1-1993
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Letter received from Dy. CIT, Jodhpur is put up (2 paras) 18-1-1993 Present Shri G.G. Mundra Filed adjournment application. Case adjourned to 15-2-1993.
5-2-1993
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Copy of order D.B. Spl Appeal No. 6/78 has already been filed by the assessee 15-2-1993 Presented Shri Kundan Lal Jain Sought adjournment application. Case adjourned to 16-2-1993.
16-2-1993 Do Sought adjournment application. Case adjourned to 15-3-1993.
18-3-1993
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Letter to the Chairman of society is put up for signature.
Hearing fixed for 30 3-1993 23-3-1993 Present Shri Kundan Lal. Chairman of the society Asked for adjournment 8-4-1993
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Adjournment application received and put up for consideration
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Letter put up for signature on hearing letter.
16-4-1993 Present Shri K.L. Jain and Shri G.G. Mundra. CA Requirements vide entry of order sheet dt 21-12-1992 in paras 3(1). (2) & (3) does not meet.
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Case fixed for 10-5-1993.
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Letter of Shri B.S. Agarwal AC (Tech ) is put up for consideration and sending report
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Adjournment application received and placed on file
-1-1998 Present Shri Nagraj Jain. Member of the Society.
Filed details which were called for vide letter dt. 26-12-1997. Case fixed for hearing on 29-1-1998.
31-8-1998
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Direction given to issue letter to the Chairman of the Society and Distt.
Collector 14-9-1998 Present Shri S.R. Sharma, CA/AR Submitted written submission. Case adjourned to 25-9-1998
-11-1999
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Letter received from Sh. K.M. Mehta. freedom fighter ol Jodhpur through the CIT. Jodhpur addressed to the CCIT, Raj Jaipur.
30-11-1999
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Letter received from Addl. CIT R 2. Jaipur in regard to notice in news papers about warning of any encroachment or construction on the land for which acquisition proceedings under s. 269D is pending.
2-11-2000
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Notice of hearing under s 269F(1) issued and served on Shri N.C. Jain, advocate. Date of hearing fixed on 6-11-2000 6-11-2000 Shri N.C. Jain, advocate attended along with Shri Kundan Mal Jain, president of the transferee co-operative society.
Filed written submission on 6-11-2000 Matter discussed.
29-4-2002 Present Shri Dinesh Goyal and Shri Chandra Sekhar, CAs Filed a POA. Written submission considered and asked to file further information.
29-4-2002
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Asked to file further details as per order sheet dt. 29-4-2002 at S. No. 1 to 5. Case adjourned to 14-5-2002 14-5-2002 Attended Shri C.S. Garg and Shri Dinesh Goyal. CAs Filed written reply. Case adjourned to 28-5-2002.
28-5-2002 Attended Shri C.S. Garg and Shri Filed written submission. Requested for Dinesh Goyal, CAs.
adjournment. Case adjourned to 17-6-2002.
17-6-2002 Attended Shri C.S. Garg and Shri Dinesh Goyal, CAs.
Informed that copy of Gazette showing publication of notice is not readily available but the notice was published in Gazette part-3, s. 1 dt. 6-4-1985 at page no. 11360 (Hindi) and 2116 (English). Case adjourned to 24-6-2002. Also given copies of papers at Sl. No. 1 to 4 as per order sheet entry dt. 17-6-2002. Case adjourned to 24-6-2002.
24-6-2002 Shri Dinesh Goyal and Shri C.S. Garg CAs attended Case discussed.
11-9-2002 Draft order under s.
269F(6) sent to the CIT-I, Jaipur for his approval vide letter No. 476 11-10-2002 Approval of the CIT, Jaipur received vide letter No. 862 dt. 8-10-2002.
21-10-2002 One copy of order under s. 269F(6) served on Shri Dinesh Goyal, CA & AR today at Jaipur 22-10-2002 Filed order & proof of service to Shri Dinesh Goyal CA & AR
24. After it, learned special counsel (hereinafter may be referred as learned Departmental Representative) tried to answer the submissions which were made on behalf of the appellant. First, he submitted that it is not fair on the part of the appellant to ask for the opportunity for cross-examination of the DVO's report. For this purpose, he relied on the ratio laid down by Supreme Court in the case of State of Jammu & Kashmir v. Bakshi Gulam Mohammed AIR 1967 SC 122 wherein it was observed that--
"Rules of natural justice requires that a party against whom an allegation is being enquired into should be given a hearing. The right of hearing does not include a right to cross-examination. The right to cross examination depends upon circumstances of each case and also on the statute under which allegations are being enquired into."
25. The learned Departmental Representative further submitted photocopies of the "notings", portion of the file pertaining to the acquisition proceedings under Section 269D(1). On 24th April, 2002, it was mentioned that--
"From 1982 and that the amount of Rs. 10,100 allegedly received in cash by M/s Jai Marwar Co. (P) Ltd. from NGNSS in 1974 does not appear in the balance sheet of Jai Marwar Co. (P) Ltd. in the relevant years. Asked to file whatever written submission and/or evidence that the assessee wants, on the next date of hearing".
26. From the noting dt. 14th May, 2002, it appears that the following documents were supplied to the appellant:
(1) Copy of reasons recorded for intention of the acquisition proceedings.
(2) Copy of the discussion in the case of.......
(3) Copy of DVO's valuation report for final reply on 28th May, 2002.
27. After drawing the attention to the "noting" and its explanation, the learned Departmental Representative mentioned that it is for the Department to start the proceedings against the appellant group housing society alone. It is for the Department not to take the proceedings against the other three societies who had purchased the land directly from M/s Jodhan Real Estate Dev. Co. (P) Ltd. in the year of 1971. But in the instant case, piece of land was purchased from M/s Jai Marwar Co. (P) Ltd. at a very late stage. So doctrine of equality is not applicable in the present case. Moreover, each case and each year will have to be decided separately. No estoppel is applicable as per the ratio laid down by Kerala High Court in the case of M.K. Mohammed Kunhi v. CIT (1973) 92 ITR 341 (Ker) as well as by the ratio laid down by Allahabad High Court in the case of J.K. Oil Mills v. CIT (1975) 105 ITR 53 (All).
28. About the validity of the notice under Section 269D, it was submitted by learned Departmental Representative that it was neither illegal nor invalid as there were sufficient reasons to believe. Soon after receiving the information of the transfer of the immovable property from the registering authority under Section 269P (Form No. 37G/H), the Competent Authority under Section 269L(1)(a) (before initiating the proceedings under Section 269C) requested the DVO to determine the fair market value of the property on the date of registration. The DVO by his report dt. 12th March, 1985 determined the fair market value at Rs. 1,20,91,000 as against the declared consideration of Rs. 24,45,452. The report of the DVO is statutory evidence under Section 269L and the difference was more than 15 per cent. Proceedings for the acquisition under Section 269C were started by issuing the notice dt. 15th March, 1985 under Section 269D(1) of the IT Act. The said notice can be read with its schedule, which runs as under:
"Land near Ratanada Circuit House, Jodhpur, and more fully described in the sale deed registered by the S.R., Jodhpur vide registration dt. 27th July, 1984."
Thus, the notice under Section 269D(1) can be read with the sale deed which provides the complete address of the transferee and transferor of the property. So it is not fair on the part of the learned Authorised Representative to raise the technical defects in the notice by mentioning that it contains neither full description of the property nor the transferee and transferor, specially when it was available in the sale deed. The learned Departmental Representative continued to argue that the notice was published in the official Gazette. It was published in the locality and it was affixed in the office. Public drum was also beaten as evident from the note sheet. Competent Authority has discussed about it in para 11 and 11.1 of the impugned order.
29. According to the learned Departmental Representative, in the instant case, only the transferee appellant is entitled to claim the compensation from the Central Government and not its members. So only the appellant-society is the "interested person" as per Section 269A(g). The members of the appellant-society are not interested persons. Therefore, it was not necessary to issue the summons notices to them in their individual capacity.
30. About the time-limit under Section 269D(1) for initiating the proceedings, it was submitted by learned Departmental Representative that the time-limit is 9 months from the end of the month in which the instrument of transfer was registered i.e., 27th July, 1984. In the instant case notice under Section 269D(1) was issued on 15th March, 1985 and it was published in the official Gazette well in time on 6th April, 1985. After publishing the notice in the Gazette, it is expected that having the nature "in rem" no individual ("in personam") service is required.
31. About the existence of Chapter XX-A/XX-C, the learned Departmental Representative submitted that these chapters are withdrawn later but at the time of proceedings, these provisions were very much in the book of statute. Section 269RR makes it inapplicable to transfers made after 30th Sept., 1987. Order under Section 269F(6) made in respect of transfer by the sale deed dt. 1st Feb., 1982 registered on 27th July, 1984 is legally valid. Further, it was submitted that the appellant was well aware that proceedings under Chapter XX-A were pending for the acquisition under Section 269F(6). So, it cannot be said that the order under Section 269F(6) is passed with bias or that is illegal or invalid. There is no statutory or deemed time-limit for making of order under Section 269F(6). So, proceedings for acquisition cannot be deemed to be barred by limitation. For this purpose, the learned Departmental Representative relied on the ratio laid down by Supreme Court in the case of State Bank of Patiala and Ors. v. S.K. Sharma. (1996) 3 SCC 364 where it was mentioned:
"Justice means justice between the parties. The interest of justice equally demand that the guilty should be punished and that technicalities and irregularities which do not occasion failure of justice are not allowed to defeat the ends of justice. Principles of natural justice are but the means to achieve the ends of justice. They cannot be perverted to achieve the very opposite end."
32. The learned Departmental Representative switched over to another aspect which relates to the genuineness of sale agreement dt. 2nd Oct., 1974. In this regard, it was submitted that the said agreement is not a genuine document. The acquisition authority has given the reasons in detail in the impugned order. Accordingly, the said agreement is on non-judicial stamp paper purchased by one Shri Navin Dangi and that the amount of Rs. 10,100 was not received from the transferee in 1974 and that the transferee had not received the possession of the land in 1974. The Co-operative Department of Rajasthan expressed the doubt about the account of the transferee (appellant) for the reason that the transferee opened the bank account only in 1980 and the first payment was made by cheque on 29th Nov., 1980. The agreement to sell was ratified by the shareholders of transferor-company only on 18th Dec., 1981. In the instant case, stamp paper used for the said agreement to sell is not purchased in the name of the transferor or transferee but is in the name of one Shri Navin Dangi at Jaipur while the agreement was claimed to be made at Jodhpur.
33. The learned Departmental Representative made a reference to FIR dt. 22nd Sept., 1980 for some theft from the said land. On enquiry from the Bench, it was later clarified that it was not related with the property in question. However, the learned Departmental Representative continued to argue that the reply to question given in Rajasthan Vidhan Sabha on 28th Oct., 1986, it was stated that there was no purchase or sale of the land by the transferee till 1980-82. Learned Departmental Representative further submitted that the conduct of the parties is not commensurate with the alleged agreement dt. 2nd Oct., 1974. The said agreement of course, was not registered and it cannot be relied upon. He made a request that the Bench may kindly ignore the said agreement.
34. About the fair market value of the property, the learned Departmental Representative submitted that the issue has already been dealt by the Competent Authority in para 4.3 of the impugned order. The fair market value means the price that the immovable property would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer of such property. In the instant case, instrument of transfer, under Section 269A(f) means the instrument of transfer registered under the Registration Act, i.e., sale deed dt. 1st Feb., 1982 which was registered on 2nd July, 1984. So, the fair market value has to be determined with reference to above date of execution of instrument of transfer and not on so-called fictitious agreement dt. 2nd Oct., 1974. Valuation Officer under Section 269L is a statutory authority. He is not a witness. So he is not liable for cross-examination. For the purpose, the learned Departmental Representative again relied on the ratio laid down in the case of State of Jammu & Kashmir v. Bakshi Gulam Mohammed (supra) where it was observed that cross-examination is not required. The Competent Authority had already provided the DVO's report along with the other relevant documents to the appellant-society. The Competent Authority visited the subject property and also took into consideration the comparable cases cited by the DVO. So the Competent Authority has exhaustively considered and dealt with the objections of the transferee to the report of the DVO. Moreover, by reading the order of the Competent Authority at paras 14 and 15,2, the learned Departmental Representative tried to prove that the Competent Authority has given valid and convincing reasons for the valuation of fair market value where it was observed that the difference in consideration was more than 15 per cent and it was a fit case for acquisition. Of course, the learned Departmental Representative accepted that the registered valuer has not considered the commercial potentiality of the property for future.
35. About the recorded transaction, the learned Departmental Representative submitted that the recorded transactions cannot be said to be bona fide as it is for Rs. 24,45,452 (the price of the subject property as on 2nd Oct., 1974), on the basis of an unregistered and bogus agreement. The said agreement cannot be taken into consideration. Legally, the date of execution of sale deed is 1st Feb., 1982, which is more than seven years later. It is reasonable to believe that during this period, the fair market value of the property, had more than doubled. The non-disclosure of the true consideration is an attempt to avoid the tax by both the transferor and transferee. Finally, the learned Departmental Representative discussed the scheme of Chapter XX-A which can be summarised as under:
Scheme of Chapter XX-A Execution of transfer deed Transferee files it with registering officer along with Section 269P(1) statement in Form No. 37G Registering officer forwards it to Competent Authority Section 269P(2) Competent Authority requires valuation report for Section 269L(1)(a) initiating proceedings Competent Authority records reasons to initiate Section 269C proceedings by issue of notice under Section 269D Competent Authority calls for objections Section 269D Transferor/transferee and persons interested in the Section 269E objections before Competent Authority Competent Authority hears objections and makes Section 269F(1), (2), (3), (4) inquiries Section 269M Competent Authority makes order of acquisition or Section 269F(6), (7) declaration of non-acquisition Service of order of acquisition/non-acquisition Section 269F(8)
36. Learned Departmental Representative submitted that abovementioned scheme was truly followed in the instant case. To sum up, the learned Departmental Representative relied on the following case laws:
Devrajan v. Tamil Nadu Farmers Service Co-operative Federation (1981) 131 ITR 506 (Mad) Where the omission to score out inapplicable portion in the warrant of authorisation does not result in misleading the person concerned, the search in pursuance thereof, cannot be characterised as an illegal exercise of the power. At the most, that may amount to irregularity and does not in any way affect the exercise of the power by the authorities concerned. Further, Section 292B provides that no proceeding taken in pursuance of any of the provisions of the Act shall be invalid merely by reason of any mistake or defect in the proceedings if it is in effect in conformity with or according to the intent and purposes of the Act. Thus, any defect in such a warrant can be said to be cured by that provision, as the proceeding has been taken according to the intent or purpose of the Act.
CIT v. Premanand Industrial Co-operative Services Society Ltd. (1980) 124 ITR 772 (Guj).
CIT v. Amrit Sports Industries (1983) 144 ITR 113 (P&H)(FB) CIT v. Des Raj (1996) 220 ITR 7 (P&H) In these cases, it was observed that on an objection as to non-service of notice can properly be taken only by the person on whom the notice was to be served but has not been served and not by any third party.
CIT v. Smt. Vimlaben Bhagwandas Patel (1979) 118 ITR 134 (Guj) Service of individual notice within 9 months is not mandatory. Default in this respect does not vitiate acquisition proceedings.
It is not mandatory for the CIT to give hearing before granting his approval to the order under Section 269F(6).
CIT v. Export India Corporation (P) Ltd. (1996) 219 ITR 461 (P&H) Sutlej Chit Fund & Financiers (P) Ltd. v. CIT (1986) 161 ITR 174 (P&H) The method of valuation should be fair and is to be decided by the Competent Authority. It is not necessary that the method of valuation which is favourable to the assessee should be adopted.
The presumptions prescribed in Clauses (a) and (b) of Section 269C(2) are available to the Competent Authority even at the initial stage of formation of the requisite belief for initiation of acquisition proceedings.
CIT v. Indiraben Jaisukhlal Desai (1980) 125 ITR 81 (Guj) The non-assessment of the difference between the market price and the transfer consideration of the immovable property to the capital gains tax in the hands of the transferor is not sufficient proof for rebutting presumption under Section 269C(2)(b).
IAC v. Laxmichand (1986) 159 ITR 730 (Kar) Failure to initiate acquisition proceedings in respect of other properties in the same area cannot be the basis for determining the fair market value of the property in dispute.
Smt. Sabita Mohan Nagpal v. CWT (1986) 160 ITR 751 (Raj) The actual cost of construction of a property is not conclusive in the matter of determination of the fair market value of that property.
CIT v. Jumramal Son (1985) 154 ITR 689 (All) Also Abdur Samat Haji Adam Kantharia and Ors. v. Union of India and Ors. (1982) 135 ITR 177 (Bom) The auction sale of property should be taken into consideration while fixing the fair market value of the property sold in the same locality.
CIT v. Export India Corporation (P) Ltd. (supra) Under Section 269C, the Competent Authority has to form a prima facie opinion only, which is subject to the objections filed by interested persons as the final opinion is to be formed by the Competent Authority under Section 269F, after hearing the objections.
Sutlej Chit Fund & Financiers (P) Ltd. v. CIT (supra) The communication of the reasons leading to the formation of the requisite belief by the Competent Authority is not required to be made to the person concerned. Nor such non-communication is fatal.
CIT v. Haripal Singh (1997) 224 ITR 147 (P&H) There is nothing in the language of Section 269D suggesting that the date of initiation of the proceedings would be the date on which the official gazette is made available for sale to the public.
Divi Suryanarayana Murthy v. Competent Authority (Asstt. CIT) (1979) 117 ITR 278 (AP) Amarchand Jainarain v. Union of India (1983) 142 ITR 410 (Bom) The relevant date is the date of execution of the sale deed (1st Feb., 1982) and not the date of registration (27th July, 1984) nor the date of unregistered agreement to sell (2nd Oct., 1974).
CIT v. Jumramal Son (1985) 154 ITR 689 (All) The unregistered agreement to sell cannot be taken into account.
37. After hearing rival submissions, on a number of days and also on the perusal of bulky material, it appears that M/s Jai Marwar Co. (P) Ltd. and appellant-society/Samittee had entered into an agreement for the transfer of the land. This agreement came into light only on 1st Feb., 1982 when it was placed for the registration before the registering authority. Prior to it, no agreement came into light though it was claimed by the appellant that it was a modified agreement and original agreement was executed on 2nd Oct., 1974 which was superseded by the fresh agreement arrived on 18th Aug., 1980 as mentioned in the sale deed dt. 1st Feb., 1982 at its pp. 16 and 17.
38. The piece of land in question was always subjected to litigation as mentioned above. The jurisdictional High Court vide its order dt. 10th Jan., 1986 has granted the stay pertaining to the said piece of land. Thus, any proceedings before the Competent Authority-cum-Additional Collector was stayed. In other words, the status quo was maintained. When status quo was maintained, naturally no further proceedings can take place under any Act, may be IT Act. All the proceedings whatsoever came to a halt including the acquisition proceeding which the Department has already started. The then standing counsel of the Department, Shri Ashok Gaur, has advised the Department vide his letter dt. 23rd Feb., 1999 that the Department cannot proceed under Chapter XX-A for the acquisition proceedings because of the stay so granted by the Hon'ble Rajasthan High Court. The litigation came to an end only in 2002 when the Supreme Court has granted the SLP as already mentioned. Further, by looking to the chronology from the note-sheets of the Department, it appears that the proceedings were moving for the acquisition of the said piece of land, of course, with the tortoise speed, as usually happens in the Government Departments. Nonetheless, we are satisfied that the long delay of so-called 16 years in completing the proceedings was bona fide specially when the Supreme Court decision dt. 28th Aug., 2001 in the case of Kundan Mal as well as another decision dt. 28th Oct., 2002 in the case of Paras Chand Khinvsara brought the litigation to an end.
39. About the technical defect in the notice, i.e., it does not contain the full addresses of the transferor and transferee and the details of description of the property, we are of the view that the notice under Section 269D(1) clearly mentioned that "the land near Ratanada Circuit House, Jodhpur, and more fully described in the sale deed registered by the sub-registrar, Jodhpur, vide registration dt. 27th July, 1984". When it is so, then the notice will have to be read along with the sale deed which was already in the possession of the appellant-society. So it is not fair on the part of the appellant-society to read the notice in isolation and to condemn that notice by saying that it does not give the full addresses of the transferor and transferee and the description of the property. It will have to be read along with the sale deed in a composite manner.
40. Moreover, the said notice was published in the official gazette. This was published in the locality and was affixed in the office. Public drum was also beaten as appears from the notings in the file maintained by the Competent Authority as well as the discussion made in para 11 of the impugned order.
41. It was claimed by learned Authorised Representative that the notice under Section 269D(1) was served on the appellant-Samittee on 13th June, 1986, while it had to be served within 9 months from the end of the month in which the sale deed was registered. In other words, the computation of 9 months will start from 31st July, 1984. We agree to that for the reason that in the instant case, the initiation should have been taken by 30th April, 1985. The reasons for initiation of the proceedings was recorded on 15th March, 1985 and the Competent Authority decided to issue the notice under Section 269D on 15th March, 1985 itself. The said notice was published in official Gazette on 6th April, 1985 in Part HI Vol. I at p. 11316 (Hindi edition) and p. 2116 (English edition). Thus, we are of the view that initiating the proceedings and issue of the notice are within the prescribed time. Moreover, the appellant-samittee had already participated in the proceedings by giving response to the said notice. If there was any defect in the notice, that stood automatically cured when the appellant has reacted to the notice as per ratio laid down by MP High court in the case of Smt. Kaushalya Bai v. CIT (1999) 238 ITR 1008 (MP).
42. "About the reasons of believe", we are of the view that the DVO's report dt. 12th March, 1985 was obtained who estimated the fair market value at Rs. 1,20,91,000 which was much higher than the consideration shown by the assessee. It was sufficient cause for initiating the proceedings.
43. It is after the service of notice, the appellant-society/Samittee becomes a party to the proceedings. It may be mentioned that the appellant was not entitled to get a copy of the same at the stage of issuance of notice as per the ratio laid down by the Orissa High Court in the case of Visnu Borewell v. ITO (2002) 257 ITR 512 (Ori).
44. About confrontation of the DVO's report, it may be mentioned that there was no violation of the principles of natural justice as per ratio laid down by Supreme Court in the case of State of JK v. Bakshi Gulam Mohammed (supra) where it was observed that the right of hearing does not include right to cross-examination. In the instant case, the DVO under the Act was a fact-finding authority to determine the fair market value. Acceptance of this report has no impropriety.
45. About the "interested persons", it was claimed that no notice was served on the allottees of the plot. In this context, it appears that the reasons of acquisition were recorded on 15th March, 1985 and on the same day notice was issued. The earliest date of allotment of the plots to the members was 5th Sept., 1985. In other words, at the time of initiation of the proceedings, the allottees were not entitled to get compensation from the Government. As per Section 269A(g), interested persons include all persons claiming or entitled to claim, an interest in the compensation payable on account of acquisition of that property from the Government. Only appellant-society was entitled to receive the compensation as on 15th March, 1985 and certainly not so-called allottees. Therefore, we are of the view that the members of the society who got the allotment as late as on 5th Sept., 1985 were not covered under the words "interested person" mentioned in Section 269A(g). Moreover, generally in the group housing society, members are substituted by accepting the resignation of the previous member and fresh application from new members with the approval of the Registrar of Co-operative Societies. So it is not possible to serve the notices under Section 269D(1) of the Act to each and every person or to have their latest addresses which are changeable time to time. In the instant case, the addresses, of course, were submitted by the appellant-Samittee but fact remains that the members of the society got the allotment much after the initiation of the acquisition proceedings and issuing of the notice. So on this reason, we find no defect in the acquisition proceedings.
46. About the clearance certificate issued under Section 230A to M/s Jai Marwar Co. (P) Ltd., it was submitted that the rate declared in the sale deed was accepted by the ITO, Jodhpur, who has issued clearance certificate on the application filed on 14th Jan., 1982. In this context, we are of the view that the object for issuing the certificate under Section 230A has a limited purpose. The ITO will have to examine whether any demand of tax is pending against the said assessee or not and if it is so whether satisfactory arrangements have been made for its payment or not, If the concerned officer is satisfied, then a certificate can be issued under Section 230A. The said officer has nothing to question about the rate or value mentioned in the transfer instrument. Moreover, the sub-registrar has no power to examine the value shown in the registered sale deed. Of course, he can raise the value for the purpose of higher stamp fee only. Thus, the objection raised by the appellant-Samittee that the value was accepted by the ITO under Section 230A has noting to do for determination with the fair market value. In this context the appropriate authority has already discussed a number of case laws in its impugned order at para 12.
47. Let us come to the crucial fact, i.e., agreement dt. 2nd Oct., 1974. About its validity, authenticity, veracity, etc., we heard rival submissions at length. On specific query from the Bench, the learned Authorised Representative, Shri N.M. Ranka, the senior counsel, has admitted that in the litigation before the High Court or the Supreme Court the authenticity of the said agreement was not expressly admitted by any Court. He has not mentioned any observation made by any Court about the genuineness of this agreement which was never a subject-matter before any Court. The litigation was pertaining to the Ceiling Act, ownership of the land for the ex-ruler, construction zone, etc. But now, the said agreement dt. 2nd Oct., 1974 has become a launching pad for the assessee in the instant case for the reason that if the agreement was genuine, then, the claim of the assessee will have to succeed. If the agreement was not genuine and its authenticity is doubtful, then the claim of the assessee is not sustainable. It was claimed that this agreement was signed between M/s Jai Marwar Co. (P) Ltd. and the appellant M/s Navin Gran Nirman Sahakari Samittee on 2nd Oct., 1974. It was unregistered document. According to this agreement, a sum of Rs. 10,100 was given by the appellant to the seller in cash. In this case, the following factors are important to decide this issue :
48. The impugned agreement was made on the stamp paper which was purchased in the name of one Shri Navin Dange on 21st Jan., 1974 in his individual capacity. Nowhere it was mentioned that Shri Navin Dange has purchased the stamp paper on behalf of the parties concerned. The stamp paper was purchased at Jaipur and not at Jodhpur where both the parties entered into agreement. No specific explanation was given why the stamp paper could not be purchased in the seller or buyer's name at Jodhpur as appears from the Appropriate Authority's order para 12.4.
49. The parties entered into agreement on the date of national holiday i.e., Mahatma Gandhi's birthday on 2nd Oct., 1974 when generally no official work or dealing is to be performed, though legally there is no bar to enter into agreement on the national holiday but no explanation was given about the urgency of the said transaction.
50. Incidentally, we find the reference pertaining to FIR which was filed by Shri Mohat Singh, director of M/s Jai Marwar Co. (P) Ltd. on 22nd Sept., 1980 that certain building material was stolen from the impugned land. This FIR was lodged on 22nd Sept., 1980. Unfortunately there was no reference of M/s Navin Gran Nirman Sahakari Samittee, the appellant in the said FIR. Prima facie, it shows that M/s Jai Marwar Co. (P) Ltd. was in the possession of land in question though as per agreement it ought to be in the possession of the appellant-Samittee by virtue of the said sale deed dt. 2nd Oct., 1974.
51. The appellant-Samittee has filed writ petition pertaining to the Land Ceiling Act. In the writ petition, it was mentioned that the members of the Samittee were 1,200 landless persons (in para 7) as on 7th July, 1981. However, the said mistake was rectified by referring the agreement dt. 2nd Oct., 1974. The Appropriate Authority and the learned Departmental Representative were of the view that the actual agreement was made between the parties on 7th July, 1981 and not on 2nd Oct., 1974.
52. It may also be mentioned that in the case of State of Rajasthan v. Kundan Mal (in Criminal Misc. Petition No. 592/96) it was stated that Shri Kundan Mal was the president of the appellant-society at the relevant time who had signed the impugned agreement dt. 2nd Oct., 1974. But in the said order, the Hon'ble High Court dt. 22nd Dec., 2000 has mentioned that secretary of the appellant society was Shri Ram Dass who in his statement recorded under Section 161 CrPC stated that no such deal was ever authorised by the appellant-Samittee or undertaken by it during his tenure as the secretary which lasted till 1979. The chairman of the appellant-society Shri Madan Singh, who held the office till 1979 deposed similar facts before the lower Court. In other words, the chairman and the secretary of the appellant-society who were holding the office till 1979 have expressly mentioned that no such deal of the purchase of land between M/s Jai Marwar Co. (P) Ltd. and the appellant-society was made till 1979. Against the said statement, if it was false, the appellant-society has not taken any remedial measure by filing the criminal complaint for making wrong statement/false evidence or any suit for damages. Impliedly, the statement of the then chairman and secretary was presumed to be correct.
53. In the said order of the High Court, it was mentioned that the audit report of the Registrar of Co-operative Societies in the case of the appellant-society for the year 1978-79 and 1979-80 does not show any land purchase by the appellant-Samittee in the last 10 years. It also gave the presumption that there was no agreement between the parties in 1974 as claimed. These facts also were discussed by the Appropriate Authority in its order at para 12.7. According to the impugned agreement, M/s Jai Marwar Co. (P) Ltd. (the seller) has received the consideration of Rs. 10,100 and delivered the possession immediately to the appellant-society while the deal was for Rs. 24,45,452.
54. Before us, the learned Departmental Representative raised the point that why the seller has awaited for the balance heavy amount till 1981. A prudent businessman cannot leave the amount without any interest for a long period specially when the deal was finalised. But we don't agree with the views of learned Departmental Representative for the reason that there might be litigation, commercial hardship if the transaction was genuine.
55. However, from the record, it appears that from the proceedings of Rajasthan Vidhan Sabha dt. 28th Oct., 1986 pp. 770 to 782, a question was asked about the affairs of the appellant-society. In reply, it was submitted that in the year 1980-82, this society originally formed for members of SC/ST but later it was taken over by non SC/ST members in an unconstitutional manner. It was also submitted that the activities pertaining to the transaction of the land was commenced sometime between 1980-82 when Shri K.M. Jain became the office-bearer. Till 1979, Shri K.M. Jain was not holding any effective official position in the appellant-society but in the impugned agreement dt. 2nd Oct., 1974 he has signed on behalf of the appellant-society, so it indicates that the agreement was a backdated agreement. In this context, we would like to refer the assessment order dt. 12th March, 1996 of M/s Jai Marwar Co. (P) Ltd. (seller). In para 4 of the assessment order (p. 146 paper book), it was mentioned that "the assessee-company had executed an agreement to sell the land on 2nd Oct., 1974 and this sale agreement is duly signed by Shri Manvender Singh, managing director, and two other directors of the company. On 2nd Oct., 1974, Shri M. Singh was not the managing director of the company.
From para 5 p. 147 of the paper book it appears that by showing the sale of the said land a receipt of Rs. 10,100 was made out. On the said receipt a revenue stamp was affixed which was signed by the managing director. The said stamp was sent to the Indian security press, Nasik, who have confirmed that the said stamp receipt was not made on 2nd Oct., 1974. It was made sometime later. According to the assessee, the receipt was issued after the gap of sometime but it does not change the character of the agreement to sell, which was duly reduced in writing on stamp paper. This version of the assessee has on the one hand accepted the falsity of receipt because in case the receipt was issued somewhere in April, 1975, the signatory could have mentioned that a sum of Rs. 10,100 was received on 2nd Oct., 1974 and could have put the date on the receipt on which it was actually signed and given to the person. On the other hand, Shri Kundan Mal Jain s/o Shri Rikhabchand Jain, who was working as president of Naveen Grah Nirman Sahakari Samiti Ltd., Jodhpur, with whom the agreement to sell was made by the assessee-company, had given the statement on oath before the then Asstt. CIT, Circle, Jodhpur on 2nd Dec., 1992. In that statement he has totally maintained that receipt dt. 2nd Oct., 1974 was obtained by him on the same date when the money was given and that the receipt produced by him and impounded by the Department was the same. When the fact of the authentication report received from India Security Press, Nasik, was disclosed to him, he did not give any explanation."
56. In the said assessment order [M/s Jai Marwar Co. (P) Ltd.], the AO clearly observed in his order that there was a collusiveness between the assessee-company and the office-bearers of Naveen Grah Nirman Sahakari Samiti. It is, therefore, amply proved that the sale consideration as disclosed in the agreement of sale and the sale documents was understated.
57. From the above, it is clear that the authenticity of the receipt and stamp fixed thereupon is doubtful and there are different versions of the office-bearers of the seller and the appellant society in this regard which amounted to play, blow hot and blow cold. By keeping in mind the maxim allegans contrana non est audiendus, it appears that there were contradictory statements and material which was produced regarding the authenticity of the said receipt and the agreement, but the same cannot be relied for the reasons mentioned above. Therefore, we are of the view that an unambiguous answer is to be taken against him who offered it as per the maxim ambigua responsio contra proferentem est accipienda.
58. Moreover, as mentioned earlier, the appellant-Samittee has failed to produce the original agreement before us for the reason that it was submitted in the High Court and the same is not available. In the absence of the said agreement, we are unable to give any further comments.
59. That accounts of the appellant-Samittee were audited by the Co-operative Department only on 30th June, 1984. Prior to it, either the accounts were not maintained or were poorly maintained by the appellant-society. The bank account was opened only in late 1980 and the first-payment of sale consideration was made to M/s Jai Marwar Co. (P) Ltd. by cheque dt. 29th Nov., 1980, i.e., 6 years after the alleged agreement to sell. For awaiting six years, no explanation was submitted. The said sale agreement was ratified by the shareholders of M/s Jai Marwar Co. (P) Ltd. only on 18th Dec., 1981. It was not ratified earlier though it was related to the valuable asset of the company.
60. The accounts of M/s Jai Marwar Co. (P) Ltd. were presented belatedly to the statutory authority, like the Registrar of Companies for the relevant year 1974 and onwards but the receipt of amount of Rs. 10,100 was never reflected in the said accounts. However, the learned Authorised Representative submitted that as far as appellant-society is concerned, the said amount stands reflected in their account but the learned Departmental Representative countered it by submitting that prior to 1980, the accounts of the appellant-Samittee were not properly maintained or poorly maintained and certainly were not audited. So the authenticity of the stand taken by the appellant-society is not proved and submission made by learned Authorised Representative is not sustainable.
61. In the facts and circumstances of the case, as discussed above, it appears that the said impugned agreement dt.:2nd Oct., 1974 was not genuine and is a backdated document.
62. To our mind, what might have happened in this case can honestly be presumed that, soon after knowing that land is likely to be acquired under the Ceiling Act sometime in 1980, the: seller might have been advised that the only safest way to save the land from the clutches of the Urban Land (Ceiling & Regulations) Act, 1976, is to show that the land was already sold to some registered group housing society. To escape the applicability of the Land Ceiling Act, both the parties entered into backdated agreement dt. 2nd Oct., 1974, and they had chosen the date of the public holiday. The said agreement was signed by Shri K.M. Jain who was holding the office at the relevant time in the year of 1980. But he has forgotten that prior to 1979 he was not holding any effective official position in the appellant-society. He committed this mistake by showing himself in the office on 2nd Oct., 1974. In fact, he was not authorised to do so ex post facto activity. By making this impugned agreement as launching pad, a subsequent agreement was made on 7th July, 1981 which is known as the substituted agreement of the original agreement dt. 2nd Oct., 1974. Later on, various litigations were started in different Courts pertaining to the Ceiling Act and ultimately the land was escaped from the clutches of Ceiling Act. One or two interested persons have also entered into litigation in their individual capacity as somewhere mentioned above.
63. In these circumstances, we are of the firm view that the impugned agreement dt. 2nd Oct., 1974 is a backdated document which was concocted by both the parties and the said agreement cannot be used as a launching pad. When this agreement was not genuine, obviously the subsequent agreement entered into dt. 7th July, 1981, has become irrelevant. The said agreement was presented for registration on 1st Feb., 1982 in the form of sale deed but the same was not registered due to the proceedings of Ceiling Act. Ultimately, the said agreement was registered on 26th July, 1984 and soon after, acquisition proceedings were started by the Department.
64. Finally, without saying much and by considering the totality of facts and circumstances of the case as discussed above, we agree with the order of the acquisition authority along with the detailed and good reasons mentioned therein. We approve the order passed under Section 269F(6). We decline to interfere with its order and same is hereby upheld by dismissing the appeal filed by the appellant-assessee.
65. In the result, the appeal filed by the appellant-society is hereby dismissed.