INCOME TAX
INSTRUCTION NO. 1908/1993
Dated: July 19, 1993
Section(s) Referred: 269U ,269UA ,269UB ,269UC ,269UD ,269UE ,269UF ,269UG ,269UH ,269UI ,269UJ ,269UK ,269UL ,269UM ,269UN ,269UO
Statute: Income - Tax Act, 1961
The 7th Conference of Appropriate Authorities held at Madras on 11th and 12th February 1993 recommended a review of the present scheme for disposal of immovable properties purchased under Chapter XXC of the Income tax Act. It recommended for adopting the procedure of sealed tenders and direct negotiations in respect of properties remaining unsold public auctions. The conference also recommended liberalisation of the payment schedule by the successful bidders particularly in respect of properties having higher bid amount.
2. The public Accounts Committee of the Parliament in its report on the system review has also recommended for a review of entire system of disposal of properties by the Government. Considering these recommendations, the Board has taken the following decisions:
(i) The properties purchased under Chapter XXC shall be put to open public auction within a period of 3 months of date of purchase order or as soon as possible so as to minimise the period for which the Government money remains locked in such properties.
(ii) For bid amounts up to Rs. 50 lakhs the successful bidder will have to make entire payment within 30 days but if the bid amount exceeds Rs. 50 lakhs this period of 30 days shall stand extended to 90 days from the date of confirmation of the sale.
(iii) Standard terms and conditions for auction sale have been prepared in consultation with the Ministry of Law (Ann.A) may be adopted by the Chief Commissioners for conducting open public auctions. Suitable modifications/additions can however be made by the Chief Commissioner depending on his requirement and rules and regulations of State Government of the local development authorities.
[iv] For properties which are not sold in at least 3 public auctions attempt should be made to dispose of the properties by inviting sealed tenders. Sample application forms for participation through sealed tender has also been prepared in consultation with the Ministry of Law and is enclosed as Annexure 'B'.
[v] It is necessary that the tenderor should be made aware of the terms and conditions of disposal of the property before he submits the tender form. Standard terms and conditions to be enclosed with the tender applications form receivable from the CCIT have also been prepared in consultation with the Ministry of Law and are enclosed as Annexure C.
[vi] If the property remains unsold even after inviting sealed tenders the CCIT may enter into direct negotiations for disposal of the property but such negotiations should be entered only with public sector undertakings and the State/Central Govt. Departments. The negotiations should start with the market value estimated by the appropriate authority and should not go below the reserve price fixed for the sale of the property.
2. The existing instructions for fixation of the reserve price shall continue to be operative.
3. Considering the liberalised modes of disposal of properties as above it is expected that the entire pendency of unsold properties shall be shortly liquidated and no property in future will remain unsold for a period of more than 3 months unless its sale has been prohibited by any competent court. The appropriate authorities should be actively associated with the process of disposal of properties purchased by them and they should always bear in mind the salability of the properties being considered by them for purchase under Chapter XXC.
ANNEXURE-A
NOTES/TERMS & CONDITIONS OF SALE
1. The properties are being sold by the auctioner under the instructions from the Chief Commissioner of Income-tax,...........and the auction is subjected to confirmation by him.
2. The properties can be inspected by the intending buyers on the dates mentioned in the schedule front page of the circular catelogue.
3. The documents relating to the properties can be inspected during the office hours at the Office of the Deputy Commissioner of Income-tax.
4. All the bidders should, prior to the auction, satisfy themselves about the correctness of the description, measurements, boundaries etc., of the properties. No enquiries in this regard will be entertained at the time of auction. On the property being knocked down in favour of a bidder in the Auction, he shall be held to have waived all the objections to the title, description, etc., of the property.
5. The Department has made its best efforts to ascertain the quantum of outstanding amount in respect of properties offered for auction sale here at . The prospective bidders shall have to bear any further outstanding amount that may come to light hereafter.
6. Any person, except a minor, any participate and bid in the auction.
7. All the bidders are required to declare beforehand whether they are bidding on their own behalf or on behalf of their principals. When a bidder is acting only as an agent he has to submit with the officer supervising the auction the authority from his principal for bidding in the auction.
8. Intending bidders are required to deposit for participating in the Auction, a caution deposit of Rs. 25,000/-(Rupees Twenty Five thousand only) with the Auctioner, by a crossed Barkers Pay Order drawn on any Scheduled Bank in..... This will be refunded subject to the terms hereof to all the bidders except the successful bidder who will be entitled to refund of the caution deposit on payment of earnest money. However, if the successful bidder so wants, this amount will be adjusted against the earnest money payable by him. The caution deposit is liable to be forfeited if the bidder concerned causes or attempts to cause disturbance or hurdles in the conduct of the auction or fails to pay earnest money on the fall of the hammer. The intending bidder, paying Rs. 25,000/- in the manner indicated above, may be allowed to take on extra person to the auction hall, with the condition that the intending bidder will be responsible for his proper conduct, decorum and observance of rules of auction sale, failing which the above sum of Rs. 25,000/- is liable to be forfeited.
9. The successful bidder will immediately have to pay by way of earnest money the amount indicated in the last column of the Schedule of properties to the Department's representative, present at the place of auction, by a crossed Banker's Pay Order drawn on any Scheduled Bank in..........on the property being knocked down in his favour in the auction. He should confirm in writing and under his signature that he has purchased the property in the auction on the terms and conditions of sale mentioned herein.
10. Subject to the terms hereof, 25% of the bid amount will have to be paid within 7 days of the auction and the balance amount will have to be paid within 30 days from the date of confirmation of the sale by the CCIT....
Provided however, in case the bid amount exceeds Rs. 50 lakhs(Rupees fifty lakhs only) the successful bidder will immediately pay by way of earnest amount indicated against particular property to the Departments representative present at the place of auction by a crossed bank draft or pay order drawn on any Schedule Bank in favour of Zonal Accounts Officer. He will also be required to confirm in writing and under his signature that he has purchased the property in the auction on the terms and conditions of sale mentioned herein 25% of the did amount will have to be paid within 30 days and the balance amount of did amount will have to be paid within 90 days from the date of confirmation of the sale by the Chief Commissioner of Income-tax.
11. Failure on the part of the successful didder to pay the earnest money first instalment of 25% of the did amount and the remaining part of the did within the periods mentioned in paras 9 & 10, shall results in forfeiture of the amounts already paid. No request for extension of time shall be entertained on any grounds.
12. All payments must be made by Banker's Pay Order drawn in favour of Zonal Accounts Officer. Central Board of Direct Taxes..............on any scheduled bank and payable at..............
13. All expenses of conveyance, including legal charges, stamp duty and registration fees, as applicable, will have to be borne by the purchaser and paid to the concerned authority within a month of the receipt of a Notice from the Department in this regard. The purchaser will also have to pay outstandings pertaining to the property. Details of outstandings known to the Income-tax Department will be announced at the time of the auction. Such details can also be obtained from the Office of the Appropriate Authority.
14. If the purchaser neglects or refuses to comply with any of the above conditions, the money already paid shall be forfeited and shall not be refunded. The Department will be at liberty to re-sell the property either by public auction or private agreement and the deficiency, if any, arising from such resale, together with all expenses pertaining to the re-sale, shall have to be made good by the defaulting purchaser. The defaulting purchaser shall not, however, be entitled to any advantage arising on re-sale of the property.
15. The Chief Commissioner of Income-tax..........reserves the right to cancel or postpone the auction at any time. He also reserves the right to reject any did, including the highest did, without assigning any reason. In such an event, the money already paid will be refunded to the intending purchaser without any interest, unless the same is forfeited as above.
16. Only Courts in..........shall have exclusive jurisdiction to adjudicate upon any matter arising under/or relating to the auction sale.
17. The successful didder should mention in the did sheet the correct name of the purchaser in whose name/names the property intended to be transferred. No subsequent change/alteration of the name/names will be allowed.
18. The purchaser shall abide by any other conditions. Which may be announced by the auctioneer or any other authorised officer on behalf of the Chief Commissioner of Income-tax at the time of auction sale.
19. All diders/purchasers shall be deemed to have read and acquainted themselves with the conditions of sale and given their ids subject to these conditions.
ANNEXURE-B
APPLICATION TO PARTICIPATE IN THE SALE OF IMMOVABLE PROPERTIES THROUGH SEALED TENDERS
To,
The President of India
Acting through The Chief Commissioner of Income-tax.
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Dear Sir,
I intend to purchase the immovable property offered by you for sale through the sealed tender at Sr. No._________________of the list of properties contained in your catalogue dated__________. I am submitting the following details and may offer for your consideration:
(i) Full name and address of the tenderor.
(ii) Father's name/husband's name.
(iii) Name of the person on whose behalf this tender form is being
submitted.
(iv) Names and addresses (with share) of persons in whose name
the property shall be registered.
(v) Description of the immovable property.
(vi) The amount offered for the purpose.
2. I have gone through the various terms and conditions enclosed with the tender documents and I agree to abide by them.