Express Towers P. Ltd. and Others vs Deputy Commissioner of Income Tax and Others

In this writ petition the petitioner has, inter alia, prayed for issuance of appropriate writ or writ of certiorari for quashing the letter No. AA/JTCIT/ SLP/2001-2002/259, dated July 10, 2001, whereby the petitioner herein was directed to deposit a sum of Rs. 22,50,000 plus interest at 18 per cent, from the date of receipt of the money till its deposit in the Government of India account.

The brief facts of this case are as follows :

On May 21, 1987, respondents Nos. 5 and 6 entered into an agreement to sell for the sale of the property No. B-7/118, Safdarjung Enclave Extension, New Delhi, for a total consideration of Rs. 23,50,000. As per the requirement under Chapter XX-C of the Income Tax Act, the petitioners and the previous owners filed for "no objection certificate" in Form No. 37-I to the appropriate authority passed on May 27, 1987. The appropriate authority passed order dated July 10, 1987, for pre-emptive purchase. The petitioners challenged this order by filing a Civil Writ Petition No. 2275 of 1987 in this court. This writ petition was ultimately allowed by order dated March 1, 1993, on the ground that before passing such an order it was necessary for the appropriate authority to issue show-cause notice. Thereafter, the appropriate authority issued a show-cause notice and after hearing the petitioners, passed an order of preemptive purchase vide order dated May 28, 1993. The petitioners filed Civil Writ Petition No. 4357 of 1993 challenging this order. This writ petition was allowed by order dated December 17, 1997 1. Mrs. Kailash Suneja (C.W. NO. 5220 of 1993 AND C.M. No. 1988 of 1994) 2. Shatabdi Trading and Investments Pvt. Ltd. and others. (C.W. NO. 4153 of 1993 and C.M. No. 3199 of 1994) 3. Chauhan Builders and Constructions Pvt. Ltd. (C.W. NO. 4589 of 1994) 4. Shashi Sehgal (C.W. No. 3726 of 1994) 5. R. C. Chawla and Another (C.W. No. 3884 of 1994) Vs. Appropriate Authority and Others. DR. A. K. Garg and Another (C.W. No. 3139 of 1993) v. Kailash Nath and Associates and Others. Chiranji Estates Pvt. Ltd. (C.W. No. 5613 of 1993) v. Union of India and Others. Express Towers Pvt. Ltd. and Another (C.W. No. 4357 and C.M.S. Nos. 7857 of 1993, 2043 of 1994 and 1811 of 1995) v. Deputy Commissioner of Income Tax and Others. Mahesh Chandra Agarwal and Another (C.W. No. 3594 of 1990 and C.M. No. 6632 of 1993) v. Union of India and Others., . An appeal filed by the Revenue was dismissed by the Supreme Court by order dated May 10, 2001 ( Dy. Commissioner of Income Tax and Others Vs. Express Towers (P) Ltd. and Others, After the dismissal of the appeal, the petitioners made representations for returning the possession of the property in question and asking them to accept the amount of sale consideration paid by the respondents without any interest. However, vide communication dated July 24, 2001, the respondents demanded interest on the amount of sale consideration paid by them to the petitioner under Chapter XX-C of the Income Tax Act. The petitioner challenged the demand of interest and it is for this reason the present petition is filed.

The point at issue is squarely covered by decision of the Division Bench of this court in the case of Jaspal Kaur Ors. Vs. Union of India, The relevant portion of this case reads as follows (page 498) :

"The amount of balance consideration paid by the appropriate authority to the vendor was in accordance with their statutory liability on account of having passed an order of pre-emptive purchase of the property. At best it can be said that the purchasers did not have to part with the amount of Rs. 13.5 lakhs which was the balance sale consideration and this money remained with them. In our view deprivation of the use and fruits of the property to the purchasers, i.e., the petitioners herein was a greater loss to them as compared to the meagre amount of interest which presumably they could have earned on that amount. The purchasers had to keep the amount always ready and available and they could not have utilised the amount for other investments. We feel it would be inequitable to ask the purchasers to pay any interest whatsoever on this amount. As already noted the amount of Rs. 13.5 lakhs has already been deposited by the petitioners with respondent No. 2 on April 23, 1999. The prayer of respondent No. 2 for award of interest on the amount of Rs. 13,50,000 is accordingly rejected. Respondent No. 2 is directed to issue the ''no objection certificate'' in terms of Section 269UL(3) of of the Income Tax Act forthwith, not later than four weeks from the date of this order and simultaneously deliver the possession of the property to the vendee."

The aforesaid decision is binding on this Bench. In that view of the matter, we allow this writ petition and direct and dispose of the same and direct the petitioner to deposit a sum of Rs. 22,50,0,000 within a period of three weeks from today with the appropriate authority whereupon "no objection certificate" in terms of Section 269UL(3) and possession of the property along with title deeds as well as other papers, if any shall be handed over within two weeks thereafter.

dusty.