The Madhya Pradesh High Court, in a recent ruling, held that an order of compulsory purchase under Section 269-ud (1) of Income Tax Act cannot be challenged before the High Court directly without approaching the appropriate authorities under the Act.
In the instant case, the petitioner challenged the order of the Assistant Commissioner of Income Tax (Benami Prohibition), Bhopal prohibiting and restraining the M/s. Kailesh Associates from transferring or changing the instant property in any manner under the Prohibition of Benami Property Transaction Act, 1988.
The show cause notice for the above purpose was served on the petitioner on the basis of certain information received by the Initiating Officer. However, the Officer has not placed reliance on any documentary evidence. Though the petitioner sought for the documents relied on by the department, the request remained unanswered.
Before the High Court, the petitioner contended that the order was passed without complying the principles of natural justice and therefore, is liable to be quashed.
Relying on the Apex Court ruling in the case of C.B. Gautam, Justice Sujoy Paul observed that the order impugned is provisional/ tentative in nature. “It is subject to judicial review by adjudicating authority. If order of adjudicating authority goes against the petitioner, the further forums of judicial review of said order is available to the petitioner before the appellate tribunal and then before this Court. Hence,against the tentative/provisional order, no interference is warranted by this court at this stage. As per the scheme of the Act, the petitioner can raise all possible grounds before the adjudicating authority. The adjudicating authority is best suited and statutorily obliged to consider all relevant aspects. Thus, at this stage no case is made out for interference.”
Read the full text of the Order below.
