S.N. Bhattacharjee, J.
1. This appeal is directed against the judgment and order dated January 13, 1994, passed by a single judge of this court in Matter No. 2552 of 1986 (Chandravadan Desai v. Appropriate Authority : [1995]213ITR744(Cal) ).
2. The petitioners entered into an agreement dated June 24, 1985, with Ghanshyam Das Thirani, Lansdowne Properties Limited (respondent No. 4) and Onyx Estates Limited to the effect that the petitioners would pay to Thirani a sum of Rs. 13.03 lakhs, to Onyx Rs. 99,150 and to Lansdowne, a sum of Rs. 33,000 for transferring office space Nos. 3, 4, 7 and 8 measuring 4,428 square ft. on the fourth floor along with car parking space in favour of the petitioners in terms of the deed of agreement which is annexure B to the writ petition. The flats were under construction. The petitioners filed Form No. 37EE in terms of requirement under Section 269AB(2) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), read with Rule 48DD and the Competent Authority duly registered the said agreement under registration No. 30EE/Acq.R-III/231, dated July 22, 1985. On May 14, 1986, the petitioners received a notice dated March 14, 1986, under Section 269D(1) from the competent authority whereby proceeding for acquisition of the said premises under Chapter XX-A of the Act was sought to be initiated. The Income-tax Act was amended by introducing Chapter XX-C with effect from October 1, 1986, with a provision requiring the parties to the transaction to submit the statement in a statutory Form No. 37-I in accordance with Section 269UC(2) read with Rule 48L of the Act within October 15, 1986, along with a penal provision in case of non-compliance therewith. Although Chapter XX-C does not apply to the instant case, the petitioners by way of abundant caution submitted the statement in Form No. 37-I of the said Rules in due time. On December 18, 1986, the petitioners received a copy of the order dated December 12, 1986, under Section 269UD(1) of the Act whereby respondent No. 1 directed that the said premises under the agreement would be purchased by the Central Government for an amount of Rs. 14,34,040. Challenging this order of acquisition the petitioners filed a writ application under Article 226 of the Constitution of India before a learned judge of this court who by an order dated January 13, 1994 (see : [1995]213ITR744(Cal) ), quashed the impugned order of respondent No. 1, dated December 12, 1986, giving liberty to the respondents to proceed upon the Form No. 37EE filed by the petitioners earlier on a finding that Chapter XX-C has no application to the present case.
3. Aggrieved by the aforesaid order, the Revenue/Department has come up with this appeal.
4. In the instant case no sale deed was executed by the transferor nor delivery of possession was given to the transferee as the construction was not completed. The petitioners filed the statement in Form No. 37EE under Chapter XX-A and the appropriate authority issued notice of compulsory purchase under Section 269D of Chapter XX-A of the Act. Consequent upon the application of Chapter XX-C of the Act in Calcutta with effect from October 1, 1986, the petitioners also filed another statement in Form No. 37-I, under Rule 48L of Chapter XX-C. The appropriate authority again issued another notice of pre-emptive purchase under Chapter XX-C. There is no dispute that prior to September 30, 1986, all the transfers of immovable property effected by registered sale deed, or by agreements for sale coupled with the delivery of possession under Section 53A of the Transfer of Property Act or by mere agreement for sale came under the purview of Chapter XX-A in view of the Section 269A(e)(ii) read with Section 269AB(1)(b) and Section 269A(h)(ii) of the Act. After incorporation of Chapter XX-C all transactions effected by agreements for sale came within its purview and it became obligatory on the part of the transferor or transferee to enter into a written agreement for sale before execution of the sale deed and to inform the appropriate authority of such transaction within three months before the date of intended sale. It also cannot be disputed that where the transfer of property has been effected by a legal document before September 30, 1986, and the property has vested in the transferee. Chapter XX-C has no application but till the right, title and interest in the property under the agreement for sale does not vest in the transferee by virtue of a legal document or under any other section of any law for the time being in force, such agreement even executed prior to October 1, 1986, will continue to be governed by Chapter XX-A as also by Chapter XX-C. The reason is that if a mere agreement for sale would result in the transfer of title it is not all necessary under Section 269UC of the Act to provide that no transfer of immovable property of value exceeding Rs. 5 lakhs shall be effected, except after an agreement for transfer is entered into between the persons who intend to transfer the immovable property and the person who intends to purchase the same.
5. This view has been taken by the Division Bench of the Madras High Court in K. K. Anandam Ammal v. Union of India : [1995]212ITR9(Mad) and in another decision of the Gujarat High Court in Shantivan Corporation v. Sub-Registrar : [1991]189ITR583(Guj) relied upon by Mr. Agarwal, the learned counsel for the appellants. In the Gujarat case, the Chapter XX-C came into operation on June 1, 1989, and the deed of agreement was executed on May 30, 1989, stipulating that possession was to be delivered only after the receipt of the entire amount of consideration. The amount was paid by post-dated cheques which were dishonoured and in the meantime the new Chapter came into operation. Their Lordships held (headnote) :
'Since the ownership of the property was not transferred before June 1, 1989, there was no sale prior to June 1, 1989. Even if possession was transferred, it would not have affected the provisions of Chapter XX-C enabling the statutory purchase of the property by the Central Government free from all encumbrances in view of the provisions contained in Chapter XX-C. Hence, order of acquisition passed on August 26, 1989, was valid.'
6. In the Madras case, the agreement for transfer was dated February 24, 1986. The new Chapter XX-C came into operation on October 1, 1986. Form No. 37-I was filed. An order of pre-emptive purchase was issued in December, 1986, under the new Chapter but the parties herein did not object to the order of pre-emptive purchase. Pursuant to the order, possession was delivered. After obtaining possession, the appropriate authority put up the property for auction and the auction purchaser was put in possession on September 14. 1987. To set aside the order of pre-emptive purchase, their Lordships held (headnote) :
'The provisions contained in Section 269UC of the Income-tax Act, 1961, could be applied and enforced in the present case even though the agreement for transfer of property was entered into prior to the coming into force of Chapter XX-C of the Act.'
7. Mr. Moorarka, learned counsel appearing for the respondents herein, cited decisions of the Delhi High Court in Sunshine Travels and Tours Pvt. Ltd. v. Union of India : [1995]213ITR749(Delhi) , where the Division Bench of the Delhi High Court held (headnote) :
'Thus a transaction effected prior to October 1, 1986, which involves the transfer of a right enabling the transferee to enjoy the building to be constructed becomes a statutory transfer for purposes of Chapter XX-A and such a 'transfer' is exposed to the statutory steps contemplated by Section 269C.
The creation of any right enabling the taking of possession for enjoyment of a building to be put up, under a transaction effected prior to October 1, 1986, would, therefore, attract the application of Chapter XX-A, just like any other 'transfer', including, a transfer involved in an agreement referred to in Section 55A of the Transfer of Property Act.'
8. Rambai Manjanath Nayak v. Union of India : [1993]201ITR422(SC) applied :
'If by the time Chapter XX-C came into force, there has been already a transaction resulting in a 'transfer' as defined, the court cannot read Chapter XX-C so as to make it retrospective to operate on that transaction of 'transfer'. The term 'transfer' has to be considered in the light of the provisions operating at the time of the 'transfer'.'
9. The Division Bench of the Madras High Court, however, differed from the views expressed by the Division Bench of the Delhi High Court in Captain Sanjeev Sethi v. Union of India : [1992]195ITR338(Delhi) . In Sanjeev Sethi's case : [1992]195ITR338(Delhi) it was held that Rule 48L has no retrospective operation and would not apply to an agreement entered into prior to October 1, 1986, specially to such cases where the provisions of Chapter XX-A were applicable.
10. Coming to the instant case before us, it would be noticed that the facts of this case stand distinguished from those cited above. In none of the aforesaid cases a statement in Form No. 37EE under Rule 48DD of Chapter XX-A was filed or the appropriate authority issued preliminary notice under Section 269D which was issued in this case by the statutory authority before the application of Chapter XX-C in the city of Calcutta. As soon as the proceedings for purchase by the Central Government were initiated in accordance with Chapter XX-A all the procedural safeguards and remedies thereunder would be available to the petitioners. The provisions of pre-emptive purchase under Chapter XX-C being more onerous the petitioners cannot be deprived of the procedural benefits available under Chapter XX-A, despite the fact that the provision of Chapter XX-C were also applicable to the agreements for sale prior to October 1, 1986. The appellants cannot abandon the procedure of acquisition of property by the Central Government under Chapter XX-A and switch over to the more onerous procedure prescribed for pre-emptive purchase under Chapter XX-C, despite amendments in partial compliance with the decision of the apex court in C. B. Gaulam v. Union of India : [1993]199ITR530(SC) , causing procedural prejudice to the respondent. In the course of hearing, Mr. Moorarka showed us a letter written by the Addl. Commissioner of Income-tax, dated May 29, 2000, addressed to the respondent and the said letter is reproduced below to show that the proceedings under Chapter XX-A have not been abandoned by the appropriate authority even today.
'No. 37EE/231/2000-2001/Acq R.
Addl. ommissioner of Income-tax, Acquisition Range-1.
Dated : May 29, 2000.
To :
Shri Chandravadan Desai (Karta),
P-39/40, Ezra Street,
Calcutta-1.
Sub : Notice under Section 269D(1) of the Income-tax Act, 1961.
Ref : Property at 2/6, Sarat Bose Road.
Please refer to the above subject and reference.
Matters relating to Form No. 37EE filed by you and Mr. G. D. Thirani will be heard by the undersigned on June 9, 2000, at 11 a.m. You are requested to attend the said hearing and submit all your objections, if any, for concluding this long pending case.
Kindly note that further opportunities will not be given.
(H. Raikhan),
Addl. Commissioner of Income-tax,
Acquisition, Range-1, Calcutta.'
11. Although the letter does not form part of the paper book and was not filed in compliance with formalities, the Revenue did not disown such a letter.
12. We, therefore, hold that for the reasons stated above the impugned notice dated December 12, 1986, has been rightly quashed by the learned single judge by his order under appeal and we do not find any cogent reason to interfere with the same. The appeal is dismissed. There will be no order as to costs.
Tarun Chatterjee, J.
13. I agree.