JUDGMENT [ENTITY], J.
1. This order will dispose of [CASE NUMBER].
2. Plot No. 427, Industrial Area-A, Ludhiana, with the construction thereon was owned by M/s. Pearl Mechanical Engineering and Foundry Works (P) Ltd., Ludhiana. The owner sold the property to M/s. Oswal Woollen Mills Ltd. Ludhiana, for a consideration of Rs. 10,05,000 by registered sale deed No. 5015, dt. 5th February, 1980. The Government Valuer on receipt of a reference from the IAC, Ludhiana, estimated the fair market value of the property at Rs. 18,31,000 vide his report dt. 25th August, 1990. After the receipt of the valuation report, the competent authority recorded reasons on 10th January, 1998, reading as under :
"The property in question is a plot measuring 9229, 7/9 sq. yards with structure over it. A reference under [SECTION] of the [ACT], was made to the District Valuation Officer, IT Department, New Delhi, for determining the fair market value of the property as on the date of its transfer. The Valuation Officer has intimated the same at Rs. 18,31,000. I have carefully examined the report of the Valuation Officer and I am in agreement with it. Accordingly, I adopt the fair market value of the property at Rs. 18,31,000."
3. The competent authority thereafter proceeded in the matter and issued notices under [SECTION] of the [ACT] (for short the "Act") to the transferor and the transferee on 10th October, 1980. The date of publication of the notice under [SECTION] of the Act in the Official Gazette is 15th November, 1980. The competent authority after hearing the objections ordered the acquisition filed appeals. The Tribunal, Chandigarh Bench, allowed the appeals of the transferor and the transferee by a common order and set aside the order of the competent authority. Hence these appeals by the CIT under [SECTION] of the Act. [CASE NUMBER] is against the transferor, whereas [CASE NUMBER] is against the transferee.
4. The competent authority after the receipt of the valuation report recorded reasons on 10th October, 1980, as reproduced above. Notices under [SECTION] of the Act were issued to the transferor and the transferee on 10th October, 1980. Notice under [SECTION] of the Act was, however, published in the Central Government Gazette on 15th November, 1980. In other words, the proceedings for acquisition of the property were initiated by the issuance of notices to the transferor and the transferee before the publication of the notice in the Government Gazette. The Tribunal allowed the appeals. One of the findings recorded by the Tribunal is that mandatory provisions of [SECTION] of the Act had not been complied with.
5. Learned counsel for the respondent, Shri [ENTITY], Senior Advocate, submitted at the outset that having regard to the admitted facts, namely, that notices under [SECTION] of the Act were issued to the transferor and the transferee on 10th October, 1980, a date prior to the initiation of proceedings for acquisition by publication of the notice under [SECTION] of the Act in the Official Gazette dt. 15th November, 1980, the entire proceedings for acquisition are vitiated.
6. In [PRECEDENT]. [PRECEDENT], it was held by the High Court of Delhi that proceedings for the acquisition of immovable property under [SECTION] can be initiated only by notice that is published in the Official Gazette. It is the notice published in the Official Gazette which enables initiation of proceedings under [SECTION] and it is a copy of that notice which is to be served upon the transferor and the transferee of the immovable property. It is a well settled principle of law that when a statute requires a thing to be done in a particular manner, it must be done in that manner, or not at all. In that case since the notice under [SECTION] of the [ACT] served on the transferor and the transferees had not been published at any point of time prior to the communication thereof to the transferor and the transferee, it was held that the notice did not comply with the provisions of [SECTION] of the Act and was consequently quashed.
7. In a Division Bench judgment of this Court, CIT vs. [ENTITY] & Anr. (1996) 220 ITR 7 (P&H) : TC S3.158, a notice of acquisition was served on the transferor and the transferee on 30th July, 1973, whereas it was published in the Official Gazette on 11th August, 1973, though it was sent for publication on 26th July, 1973. The Division Bench after elaborately discussing the matter came to the following conclusion :
"In the result, it must be held that the notice served on the transferor and the transferee on 30th July, 1973, before it was published in the Official Gazette was illegal and all subsequent proceedings including the order acquiring the property under [SECTION] of the Act stood vitiated. We, therefore, uphold the impugned order of the Tribunal setting aside the order of the competent authority."
The contention of the Revenue that even if the order of the competent authority stood vitiated on the ground that notice was served on the transferor and the transferee before the proceedings were validly initiated, the case should be remanded to the competent authority for proceeding afresh because the proceedings had been validly initiated on 11th August, 1973, and that thereafter the said authority can proceed to pass a fresh order in accordance with law, was also not accepted by the Bench in [ENTITY]'s case (supra) by observing that the property was sold 23 years back and the interest of third party may have intervened and it would be inequitable to permit the proceedings to start again.
8. In [PRECEDENT] another Division Bench of this Court again took the view that issuance of the notice to the transferor and the transferee before publication of the notice in the Official Gazette is not a mere irregularity; in fact it vitiates all subsequent proceedings including the order of acquisition.
In the above premises learned counsel for the respondents submitted that these appeals deserve to be dismissed.
9. Mr. [ENTITY], learned counsel appearing for the Revenue, submitted that the respondents acquiesced by joining the proceedings, and in any case, they waived the objection in that behalf. Learned counsel submitted that in that view of the matter, it is not open to the respondents to raise this objection at this stage.
10. The objection regarding acquiescence or waiver was considered by this Court in [PRECEDENT] and it was held that since it relates to the assumption of jurisdiction, the respondents were rightly allowed to raise the same in appeal even if it be assumed that it was not specifically raised before the competent authority. The Bench went on to record the conditions precedent for the exercise of jurisdiction to initiate acquisition proceedings. The conditions precedent as noticed by the Bench are as under :
"(i) transfer of immovable property worth more than Rs. 25,000 in value;
(ii) the fair market value of the property exceeds the apparent consideration by fifteen per cent;
(iii) ulterior motive of tax evasion or the concealment of income for such untrue statement of apparent consideration in the instrument or transfer of such property;
(iv) recording of the reasons by the competent authority; and
(v) the publication of the notice to that effect in the Official Gazette."
11. In [PRECEDENT], what had happened was that an order of assessment was passed on the assessee. In an appeal against the order before the AAC the assessee gave up the contention regarding the validity of the notice of reassessment. On merits, the AAC dismissed the appeal. On further appeal, the Tribunal remanded the case to the ITO with directions to cross-examine a witness. On appeal from the order passed on remand the assessee contended that reassessment proceedings were not validly initiated. The AAC examined the original order-sheet and found that no reason had been recorded by the ITO as required by [SECTION] of the Act. He further found that the ITO had not specified the clause of [SECTION] under which the assessment had been reopened. He, therefore, annulled the order of reassessment. The Tribunal, however, held that once the Tribunal passed an order the matter became final and that the order restoring the case to the file of the ITO with clear instructions only to cross-examine a witness meant that the only point that left open was in respect of the sum and not the legal or jurisdictional aspect, viz., whether the reassessment proceedings were correctly initiated.
On a reference, after restating the conditions precedent for initiating reassessment proceedings under [SECTION] of the Act, and after examining the matter in great detail both on principles and precedents including a number of judgments rendered by the Supreme Court, the Division Bench of the Gujarat High Court came to the conclusion that the order of reassessment was not valid, by holding that there could never be a waiver of a mandatory provision for the simple (sic-reason) that in such cases jurisdiction could not be conferred on the competent authority by mere consent, but only (sic-when) conditions precedent for the exercise of jurisdiction being fulfilled. If jurisdiction cannot be conferred by consent, there would be no question of waiver, acquiescence or estoppel or the bar of res judicata being attracted because the order in such cases would lack inherent jurisdiction and would be a void order or a nullity. If an original order is without jurisdiction, it would be nullity confirmed in further appeals. The appellate order of the Tribunal thereon would also be a nullity.
While dealing with this aspect of the matter it was observed :
"In fact, no question of any bar of res judicata even at the subsequent stage of the same proceedings could arise in the present case for the simple reason that the original order is said to be without jurisdiction. The first condition in invoking any bar of res judicata is the condition about the competence of the Court. Similarly, the provision of finality in this relevant provision in [SECTION] could also not be attracted in such a case, where the question admittedly, went to the root of the jurisdiction and if that contention was upheld, it would have made all the proceedings of reassessment totally void and without jurisdiction. As per the aforesaid settled legal position such a point could not be waived and there can be no question of the earlier remand order operating as a final order, because if such a jurisdictional point could not be waived, even the fact of passing of the remand order by the Tribunal could not confer jurisdiction on the ITO, if the conditions to found his jurisdiction were absent."
12. The decision in [PRECEDENT], pressed into service by Mr. [ENTITY], appearing for the Revenue, has no application to the facts of this case. In that case it was contended that the assessee had waived his right consciously and intentionally to object to the defect in the notice omitting the status in which return had to be filed. It was further pointed out that even if there was a defect, the same stood cured by the applicability of [SECTION] of the Act.
The Bench after noticing the said contention of the counsel for Revenue in the petition under [SECTION] of the Act only directed the Tribunal to refer the following question of law along with the statement of the case for the opinion of this Court :
"Whether, on the facts and in the circumstances of the case and also in the light of the provisions of [SECTION] of the [ACT], notice issued under [SECTION] of the Act was not invalid specially when the assessee had consciously and intentionally waived his right to object to the defect in the notice ?"
13. Mr. [ENTITY], learned counsel appearing for the Revenue then submitted that even if it be assumed that the notice was issued to the transferor and the transferee before its publication in the Official Gazette, even then the proceedings for acquisition are not vitiated. Learned counsel in that behalf placed reliance on Smt. [ENTITY] vs. IAC (1984) 145 ITR 19 (All) : TC 3R.578, [ENTITY] & Ors. vs. IAC & Ors. (1985) 153 ITR 774 (Kar) : TC 3R.549, Smt. [ENTITY] & Ors. vs. CIT (1980) 123 ITR 40 (Pat) : TC 3R.410 and CIT vs. [ENTITY] (1980) 124 ITR 420 (Guj) : TC 3R.521.
14. In Smt. [ENTITY]'s case (supra) notice was published in the Official Gazette on 19th January, 1974, whereas the copies of the same were served on the transferor and the transferee on 3rd January, 1974, and 17th December, 1973, respectively. In this background, it was contended that the proceedings for acquisition were void ab initio as competent authority had served notice on the transferor as well as the transferee before the publication of the notice in the Official Gazette. While rejecting this contention straightaway without examining the matter in any detail whatsoever, it was observed as follows :
"The submission made is devoid of substance. There is nothing in [SECTION] which laid down the requirement of service of the notice personally on the transferor and the transferee and its publication in the Official Gazette. [SECTION] requiring the notice to be published in the Official Gazette is no doubt mandatory, but it would not be correct to say that the notice to be served under [SECTION] had to precede the publication in the Gazette. This submission has no merit and is, therefore, rejected."
Apart from the fact that no reasons are found given in support of the aforequoted observations made by the Bench of the High Court of Allahabad, a bare reading of the provisions contained in [SECTION] of the Act shows that it does require the publication of the notice in the Official Gazette for initiation of proceedings for acquisition under [SECTION] of the Act and as such the publication had to precede the service of the notice upon the transferor and transferee under [SECTION] The Bench although held in the very next sentence that [SECTION] requiring the notice to be published in the Official Gazette was mandatory in character, it did not examine the effect of its non-compliance by the competent authority. This judgment, therefore, cannot be taken to buttress the case of the Revenue.
15. So far as the judgment of the High Court of Karnataka in [ENTITY]'s case (supra) relied upon by the learned counsel for the Revenue is concerned, it was based on an incorrect reading of the Full Bench judgment of this Court in [PRECEDENT] and was specifically dissented from by a Division Bench of this Court in [ENTITY]'s case (supra) by observing as follows :
"In our opinion, the Full Bench in [PRECEDENT] did not hold that even where the notice is served under [SECTION] prior to its publication under [SECTION], the error committed by the competent authority is only procedural and not jurisdictional. Such a defect is one of jurisdiction and the competent authority cannot proceed to make an order acquiring the property. We do not, therefore, in all respect agree with the view taken by the Karnataka High Court in [ENTITY] vs. IAC (1983) 153 ITR 774 (Kar) and [ENTITY] vs. IAC (1986) 160 ITR 642 (Kar). In [ENTITY]'s case (supra), the Karnataka High Court reiterated its earlier view while placing reliance on [ENTITY]'s case (supra)."
16. In the case of [ENTITY] (supra) relied upon by the learned counsel for the Revenue, notices were issued under [SECTION] of the Act on 31st January, 1969, upon the appellants to show-cause as to why the immovable property be not acquired and thereafter the notice was published in the Gazette on 2nd March, 1969 and 1st June, 1969. It was contended before the Bench of the Patna High Court that initiation of the proceedings by the competent authority for the acquisition must be by a notice published in the Official Gazette under [SECTION] and so long as the notice was not published in the Official Gazette under [SECTION], there could be no such notice which could be served upon the transferor and the transferee. The learned counsel in support of this contention primarily relied upon a decision rendered by the Supreme Court in [PRECEDENT] which was decided under the [ACT], as amended in 1959. This decision was distinguished and it was held that if an objection regarding strict compliance with [SECTION] had not been raised before the competent authority or the Tribunal, such an objection must be taken to have been waived. While so holding it was observed as under :
"In the instant cases, it is true that the notices under [SECTION] were duly published in the Gazette of India dt. 2nd March, 1974, and 1st June, 1974. But it is admitted case of the parties that the notices which were so published in the Gazette were issued to the appellants under [SECTION] on 31st January, 1974, in substantially the same terms. The purpose of the publication of the notice in the Official Gazette and the service thereof on the parties to be effected either by affixing at the places mentioned in [SECTION] or serving on the appellants was merely to apprise the persons concerned that such proceedings were going to be initiated against them. That had admittedly been done by the individual notices sent to the appellants under [SECTION] on 31st January, 1974, before the proceedings were initiated. The appellants, therefore, cannot claim to have any grievance on this score. To that extent, the term used in [SECTION] namely, notice under [SECTION] "or on such notice" must be deemed to be merely directory. Furthermore, the appellants did not make any grievance or agitate this question either before the Competent Authority or before the Tribunal. They must, therefore, be said to have waived the benefit conferred on them by the aforesaid statutory provisions. I thus find no substance in this point of the learned counsel for the appellants."
17. We do not agree with the aforesaid view taken by the Patna High Court because a Full Bench of this Court in [PRECEDENT] has held that the publication of the notice in the Official Gazette under [SECTION] has to precede the service thereof on the transferor, the transferee and all other persons concerned under [SECTION]. Until and unless proceedings for acquisition come into existence by initiation thereof on the publication of the notice in the Official Gazette, service of the notice, inter alia, on the transferor and the transferee under [SECTION] will be meaningless and an exercise in futility. Moreover, the view taken by the Patna High Court runs counter to the view taken by this Court in two Division Bench cases relied upon by the learned counsel for the respondents and already noticed in the earlier part of this judgment. We are not only bound by these two Division Bench decisions of this Court but we also feel that they have been correctly decided. Insofar as the observations made by the Bench in the case of Smt. [ENTITY] (supra) regarding waiver are concerned, it may be noticed that neither any argument relating to waiver was raised nor considered in any depth.
18. The question in the case of [ENTITY] (supra) was, however, slightly different. In that case the Tribunal set aside the order of acquisition as the public notice in the Government Gazette was not made available to the interested parties within time and the notice in the locality was published beyond the period of 45 days of the public notice during which the transferor and the transferee could file their objections. This view was not accepted by the High Court of Gujarat and it was held that this act did not vitiate the proceedings.
19. In [PRECEDENT] none of the petitioners raised any objection to their cases being transferred and in fact they submitted to the jurisdiction of the ITO, to whom their cases had been transferred. They challenged the order of transfer only after the decision of the Supreme Court in [PRECEDENT]. [PRECEDENT]. It was in this situation held that the assessee acquiesced in the jurisdiction of the ITO, they were not entitled to invoke the jurisdiction of the Supreme Court under [SECTION] of the [ACT]. Thus, the contention that the order of transfer made by the Commissioner is unconstitutional and void, was repelled. This, however, is not the situation in the present case, and, therefore, counsel for the Revenue cannot seek any assistance from this decision of the Supreme Court.
20. For the reasons recorded above, the present appeals of the Revenue are dismissed with no order as to costs.