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Judgment
Bakthavatsalam, J.—The prayer in the writ petition is to issue a writ of certiorarified mandamus and to call for the records of the first
respondent dated June 28, 1988, and further direct them to pay the balance amount of Rs. 4,59,325.
The petitioner was the owner of a house property at No. 10, Rogers Road, Richards Town, Bangalore, and it entered into a sale agreement
dated March 12, 1988, with a person in Bombay in respect of the property. The petitioner applied to the appropriate authority under the Income
Tax Act for obtaining a no objection certificate under Chapter XXC of the Act. But by order dated May 23, 1988, the Department acquired the
property for a sum of Rs. 23,00,000 u/s 269UD(1) of the Income Tax Act, 1961. By impugned letter dated June 28, 1988, the petitioner was
informed that the amount of consideration payable to him will be reduced by Rs. 4,59,325 being tax arrears payable to the Department.
I have adjourned this matter many times in order to facilitate the Department to file the counter-affidavit. Since no counter is forthcoming, the
main writ petition itself is taken up for hearing by consent. Further, I am of the view that since the facts are admitted, no counter is also necessary
and the question turns purely upon an interpretation of the section under the Act.
Section 269UG(1) of the Act reads as follows :
The amount of consideration payable in accordance with the provisions of section 269UF shall be tendered to the person or persons entitled
thereto, within a period of one month from the end of the month in which the immovable property concerned becomes vested in the Central
Government under sub-section (1), or, as the case may be, sub-section (6) of section 269UE :
Provided that if any liability for any tax or any other sum remaining payable under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Gift-tax
Act, 1958 (18 of 1958), the Estate Duty Act, 1953 (34 of 1953), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), by any person
entitled to the consideration payable u/s 269UF, the appropriate authority may, in lieu of the amount of consideration or any part thereof against
such liability or sum, after giving an intimation in this behalf to the person entitled to the consideration.
A reading of the proviso clearly shows that the Department can set off any amount of consideration towards tax arrears only after giving an
intimation in this behalf to the person entitled to the consideration. Admittedly, this has not been done in this case. Learned counsel appearing for
the Income Tax Department also is not disputing the fact that no opportunity was given to the petitioner as contemplated by the proviso to section
269UG(1) of the Income Tax Act.
In such circumstances, I am of he view the there is no justification for the Department to hold back the amount of Rs. 4,59,325 out of the total
consideration for which the property has been acquired by the Department. If there are arrears due to the Department, the Department should
given a notice and an opportunity to the petitioner. That has not been done. It seems that the petitioner has also been claiming refund of certain
amounts from the Department. I am of the view that it has got nothing to do with the issues raised before me. In view of this, I direct the first
respondent to pay the balance of Rs. 4,59,325 to the petitioner within four weeks from today. It is also open to the Department to give an
opportunity to the petitioner with regard to the arrears they are claiming. But on date, since the statute has not been complied with the Department,
I have no opinion except to allow this writ petition as prayed for.
In the result, this writ petition will stand allowed with costs of Rs. 500.