JUDGMENT - T.D. SUGLA, J.:---By this petition under Articles 14, 19(e), 300-A and 226 of the Constitution of India, the petitioner, a Co-operative Hosing Society, has challenged the notice dated 19th September, 1977 under section 269-D(1) and notice dated 24th December, 1985 under section 269F (1) of the Income-Tax Act, 1961 (for short "the Act") issued by the competent authority and inspecting Assistant Commissioner, Range I, Bombay. 2. Relevant facts in brief are that M/s. Gautam Sarabhai Private Limited (for short "the owners") were the owners of the plot of land admeasuring 8077 square yards situate at Mount Pleasant Road, Bombay. In or about December 1951, January 1952, it was agreed between the parties that the plot of land would be leased out to the petitioner-assessee for a period of 21 years 7 months commencing from 1st January, 1952 upto 31st July, 1973 at a stipulated monthly rent, that the petitioner would construct 60 apartment thereon together with servant quarters, garages, swimming pool and other amenities according to the plans mainly for residential purposes and that on the expiry of the lease period the petitioner would hand over vacant possession of the said plot of land along with the structure thereon to the owners without claiming any compensation whatsoever. Formal lease agreement was executed on 4th August, 1953 and the rent payable from 1st April, 1954 was Rs 4,000/- per month. By an agreement dated 8th December, 1968 the owners agreed to sell to the petitioner their reversionary rights in the property for a consideration of Rs. 20,00,000/-. The deed of conveyance was executed on 10th March, 1971 and was lodged for registration on the same day. However, it was actually registered on 29th January, 1977. Notice dated 19th September, 1977 under section 269-D(1) of the Act was served on the petitioner on 4th July, 1978. The notice was published in the Official Gazette on 8th October, 1977. Before the issue of notice, the competent authority, it appears, heard Shri S.P. Mehta, a Counsel for the petitioner, and prepared a note in respect of initiation of acquisition proceedings. This note is dated 1st September, 1977 and is at pages 91 to 93 in the Paper-Book. The notice was published in the Official Gazette on 8th October, 1977. Before the issue of notice, the competent authority, it appears, heard Shri S.P. Mehta, a Counsel for the petitioner, and prepared a note in respect of initiation of acquisition proceedings. This note is dated 1st September, 1977 and is at pages 91 to 93 in the Paper-Book. It further appears that this note and the report of the District Valuation Officer prepared under section 55-A of the Act read with section 16-A(5) of the Wealth Tax Act, 1957, in the case of the owners, were served on the petitioner who submitted their detailed reply dated 4th August, 1978 in the Office of the competent authority, on which date their arguments were also heard. Nothing happened between the date and 17th January, 1986 when a successor competent authority served on the petitioner a notice dated 24th December, 1985 under section 269-F(1) of the Act. The present petition was filed before this Court on 18th February, 1986. 3. Inviting the Court's attention to the provisions of section 269-C of the Act, under which the competent authority assumes or can assume jurisdiction to initiate proceedings for acquisition of an immoveable property, Shri Chinoy, the learned Counsel for the petitioner, stated that the section laid down certain conditions which must be satisfied before a competent authority assumes jurisdiction under this section. Referring then to this Court's judgement in the case of (Unique Associates Co-operative Housing Society Ltd. v. Union of India)1, 152 I.T.R. 114, the learned Counsel stated that the said decision was squarely applicable to the facts of the case and, therefore, the impugned notices required to be quashed. He submitted that even though the owners had leased an open plot of land to the petitioner, the suit property was a tenanted property entitled to protection under section 12(1) of the Bombay Rents. Hotel and Lodging House Rates Control Act. 1947 (for short "the Bombay Rent Act"). In the case of tenanted property protected under section 12 of the Bombay Rent Act, he further submitted that the fair market value of the property could not be estimated except by applying a multiple to the annual rental income. The fair market value of the suit property so arrived at should, he stated, not be found higher than the sale consideration in this case. The fair market value of the suit property so arrived at should, he stated, not be found higher than the sale consideration in this case. Alternatively, he contended that assuming the fair market value of the suit property was more than the apparent consideration, there was no material whatsoever justifying the inference that the consideration was not truly stated in the sale deed and that too with a view to conceal its own or that of the owner's income or assets. In this context, the learned Counsel relied on the Gujarat High Court decision in the case of (C.I.T. v. Vimlaben Bhagwandas Patel)2, 118 I.T.R. 134, and Calcutta High Court decision in (Subhkaran Chowdhury v. I.A.C. of Income Tax)3, 118 I.T.R. 777, for the proposition that the presumption raised under section 269-C(2) is not available for the purpose of initiating proceedings under that section. The presumption may apply after the proceedings are otherwise validly initiated. The Counsel further pointed out that after the notice under section 269-D(1) was published and an individual notice was served on the petitioner, the petitioner had submitted a detailed explaination when the case was heard by the Competent Authority. No further action was, however, taken for more than 8 years. It was, thus, a case of dropping or abandoning of the proceedings. The proceedings re-started by the issue of second notice on 24th December, 1985 under section 269-F(1) were barred by limitation. Besides, such an action on the part of the departmental authorities is arbitrary and unreasonable and violative of Article 14 of the Constitution. The respondents having not cared to file an affidavit in reply, the averments made by the petitioner in the petition, according to the Counsel have to be accepted as correct. 4. According to Shri Jetley, the learned Counsel for the Income Tax Department, Chapter XXA introduced in the Income-Tax Act, 1961, was a code in itself. The assessee has an alternative and effective remedy. This Court may not interfere at this stage in writ jurisdiction. Reliance in this behalf was placed on a Supreme Court decision in the case of (Special Land Acquisition Officer v. Veerabhadrappa)4, 154 I.T.R. 190. As regards presumptions under section 269-C(2), the Counsel stated that the presumptions were rebuttable and there was no good reason why those presumptions should not arise at the time of initiation of the proceedings. Reliance in this behalf was placed on a Supreme Court decision in the case of (Special Land Acquisition Officer v. Veerabhadrappa)4, 154 I.T.R. 190. As regards presumptions under section 269-C(2), the Counsel stated that the presumptions were rebuttable and there was no good reason why those presumptions should not arise at the time of initiation of the proceedings. But for the presumptions it would be impossible for the Department to initiate proceedings under section 269-C. It was stated there was time limit for initiating proceedings under section 269-C/269-D. But there was no time limit for the completion thereof. Mere fact that the proceedings remained dormant for some time does not lead to the conclusion that the proceedings were dropped or proceeded with in an arbitrary and unreasonable manner. The proceedings, it was reiterated, were started within 9 months of the registration of the sale-deed. The basis of the proceedings was the valuation of the property in the case of the owners, on the basis of which the Competent Authority could have and had formed 'reason to believe' required under section 269-C. 5. In order to appreciate the rival contentions, it is desirable to refer to the provisions of section 269-C of the Act which read as under :--- "269-C(1) Where the competent authority has reason to believe that any immovable property of a fair market value exceeding twenty five thousand rupees has been transferred by a person (hereinafter in this Chapter referred to as the transferor) to another person (hereinafter in this Chapter referred to as the transferee) for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of --- (a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer; or (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-Tax Act, 1922, or this Act or the Wealth-tax Act, 1957. The competent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter : Provided that before initiating such proceedings, the competent authority shall record his reasons for doing so : Provided further that no such proceedings shall be initiated unless the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefore by more than fifteen per cent of such apparent consideration. (2) In any proceedings under this Chapter in respect of any immovable property,--- (a) where the fair market value of such property exceeds the apparent consideration therefore by more than twenty-five per cent of such apparent consideration, it shall be conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer; (b) where the property has been transferred for an apparent consideration which is less than its fair market value, it shall be presumed, unless the contrary is proved, that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with such object as is referred to in clause (a) or Clause (b) of sub-section (1)," 6. Evidently, four conditions must be satisfied before power is exercised by the Competent Authority under this section, as rightly pointed out by the learned Counsel for the petitioner. The conditions are :--- Where the competent authority has reason to believe--- (i) any immovable property of a fair market value exceeding Rs. 25,000/- has been transferred by a person to another person; (ii) for an apparent consideration which is less than the fair market value of the property ; (iii) the consideration agreed to between the parties has not been truly stated ; and (iv) this has been done with the object of (a) facilitating the reduction or evasion of the liability of the transferor.........or (b) facilitating the concealment of any income or other moneys or other assets which have been or which ought to have been disclosed by the transferor ......... The first condition is evidently satisfied. For the second condition the only material before the Competent Authority was the valuation of the suit property by the District Valuation Officer in the case of the owners. The first condition is evidently satisfied. For the second condition the only material before the Competent Authority was the valuation of the suit property by the District Valuation Officer in the case of the owners. The District Valuation Officer has valued the property on land and building method and deducted about Rs. 3,00,000/- therefrom on account of estimated legal expenses likely to be incurred for getting the property vacated. First question is whether the valuation report is a good piece of material for formation of belief that, the apparent consideration is more than 15 per cent of the fair market value of the property. The answer to this question will, to a large extent, depend upon whether the suit property was a tenanted property. In case it was a tenanted property as claimed, then as held by the Calcutta High Court in the case of (C.I.T. v. Anup Kumar Kapoor)5, 125 I.T.R. 684, Mysore High Court in the case of (Commissioner of Wealth-tax v. V.C. Ramchandran)6, 60 I.T.R. 103, and Punjab and Haryana High Court in the case of (C.I.T. v. Prem Nath Anand)7, 108 I.T.R. 549, the valuation of the property had to be made by capitalising the rental income and not otherwise. In this connection, it is necessary to bear in mind that the owners had leased out to the petitioner only a plot of land and that all constructions thereon were made by the petitioner. Thus, the first question is whether the plot of land leased out to the petitioner was or could be a case of letting out of 'premise' under the Bombay Rant Act. However, this question is settled, as rightly pointed out by Shri Chinoy, by the Supreme Court decision in the case of (Mrs. Dossibai v. Khemchand)8, A.I.R. 1966 Supreme Court 1939. The contention that where a mere plot of land was leased out for construction of a building for residence it was leased out for construction of a building rather than for residence in that case, was rejected. In paragraph 14 (at page 1942) the Supreme Court held:- "Turning now to the facts of the present case we find that in each of these cases the lease was taken with a view to construct buildings thereon for residential, business, industrial or office purposes. In paragraph 14 (at page 1942) the Supreme Court held:- "Turning now to the facts of the present case we find that in each of these cases the lease was taken with a view to construct buildings thereon for residential, business, industrial or office purposes. The premises let are therefore 'premises' to which under section 6(1) of the Rent Act the provisions of Part II of the Act, apply." Accordingly; the suit property is 'premises' let out to which section 6(1) of the Rent Act applies. 7. Next question is whether the fact that under the lease agreement the petitioner had bound itself to hand over vacant possession of the land and the structure thereon to the owners without any rights to claim compensation on the expiry of period of lease takes the case out of protection available to the petitioner as tenant under section 12(1) of the Bombay Rent Act. This question is also settled in view of the Supreme Court decision in the case of (Abbasbhai v. Gulamnabi)9, A.I.R. 1964 Supreme Court 1341. The provisions of section 12 (1) of the Bombay Rent Act were explained by the Court as under :--- "The clause applies to a tenant who continues to remain in occupation after the contractual tenancy is determined; it does not grant a right to evict a contractual tenant without determination of the contractual tenancy. Protection from eviction is claimable by the tenant even after determination of the conrtractual tenancy so long as he pays or is ready and willing to pay the amount of the standard rent and permitted increases and observes and performs the other conditions of the tenancy consistent with the provisions of the Act." 8. The result is that the suit property is a tenanted property in which the rights of the tenant, i.e. the petitioner, were protected under section 12(1) of the Bombay Rent Act. The valuation of the reversionary interest of the owners which the petitioner purchased was, therefore, required to be done in this background. 9. In Unique Associates Co-operative Housing Society Ltd. v. Union of India, 152 I.T.R. 114, a similar question had arisen before this Court. The valuation of the reversionary interest of the owners which the petitioner purchased was, therefore, required to be done in this background. 9. In Unique Associates Co-operative Housing Society Ltd. v. Union of India, 152 I.T.R. 114, a similar question had arisen before this Court. Perusal of the valuer's report in that case showed that the valuer had valued the fair market of the property on the basis that a part of the property was vacant and was at the disposal of the Society and that the other part was a tenanted property. While the tenanted portion was valued by applying a multiplier to the yield, the vacant portion was valued on land and building method. Finding that the valuer had wrongly assumed that a part of the property was vacant, it was held that the valuation was evidently wrong and could not form a sound basis for the formation of belief of conditions necessary for initiation of the proceedings under section 269-C of the Act. The facts in the present case are much worse for the Department for more than one reason. In the first place, the valuation report-the sole basis for initiation of proceedings herein was withdrawn by the Department in the case of owners themselves. The owners had withdrawn their petition before the Gujarat High Court for that reason. In the second place, the valuer who estimated the fair market value of the suit property in the case of owners was aware of the fact that the suit property was a tenanted property. But he wrongly assumed that on the expiry of the period of lease the owners were entitled to the vacant possession and the petitioner was bound to hand over the vacant possession of the land and building to the owners. It is because of this fallacy that he valued the reversionary interest on land and building method and merely reduced the value by about Rs, 3,00,000/- which he thought the owners might have to spend on litigation to get the suit property vacated. In view of the legal position indicated above, the owners could not evict the petitioner, its right as tenant being protected under section 12(1) of the Bombay Rent Act. In the circumstances, the suit property was required to be valued by applying a multiplier to annual yield. In view of the legal position indicated above, the owners could not evict the petitioner, its right as tenant being protected under section 12(1) of the Bombay Rent Act. In the circumstances, the suit property was required to be valued by applying a multiplier to annual yield. Considering the valuation estimated by the petitioner's valuer in this background, his valuation seems to be correct. The petitioner, of course, paid Rs. 20,00,000/- which is almost three times of the market value determined by its valuer. This the petitioner did perhaps because it was in the possession of the property. It is difficult to imagine whether any person other than the petitioner would have purchased the suit property even for Rs. 20,00,000/-. The question of taking action under section 269-C of the Act, therefore, does not arise. 10. In the view taken on the question of second condition requisite for the initiation of proceedings under section 296-C(1) of the Act, it is not necessary to deal with other contentions raised in the petition. 11. In the result, Rule is made absolute in terms of prayer clauses (a) and (b). No order as to costs. Rule made absolute. -----