M. B. SHAH, M. R. CALLA, J. ( 1 ) ). It is the contention of the petitioner that it is a registered non-trading corporation and that its President Shri Mahesh Kalubhai Bhatt entered into an agreement on June 10 1992 to purchase a land bearing Final Plot No. 287 admeasuring 1230 sq. mtr. (1028. 40 sq. mtr) owned by the third respondent (Budhabhai Trust) for a sum of Rs. 20 lakhs. The third respondent is a public charitable trust registered under the Bombay Public Trusts Act 1960 (the Act for short ). The Trust filed an application on February 25 1993 before the Charity Commissioner for seeking permission to sell the said land. Pursuant to the said application a public advertisement was given in the newspaper on June 4 1993 inviting objections if any to the said sale and inviting offers from the public at large for purchase of the said land. It is also contended that on June 30 1993 the Charity Commissioner found that the offer of one person to buy the said land was conditional one and therefore that offer was not accepted. Further considering the fact that the highest offer was for a sum of Rs. 22 lakhs the petitioner gave an offer to buy the said land for a consideration of Rs. 22 lakhs to the Charily Commissioner. The petitioners offer was accepted and thereafter an agreement to sell was executed between the petitioner and the said trust on October 19 1993 The said agreement to sell was executed subject to certain conditions inter alia that the sale would be subject to sanction by the Charity Commissioner under Section 36 of the Act as well as by the appropriate authority under the Income-tax Act. Thereafter Form No. 37 was submitted in the office of the appropriate authority on November 3 1993 On January 13 1994 the Charity Commissioner approved the said agreement to sell. Thereafter Form No. 37 was submitted in the office of the appropriate authority on November 3 1993 On January 13 1994 the Charity Commissioner approved the said agreement to sell. It is the contention of the petitioner that in spite of the aforesaid facts without giving an opportunity of hearing to the petitioner the appropriate authority has passed an order on February 23 1994 holding that the said land is fit for pre-emptive purchase under Section 269ud (1) of the Income-tax Act because the apparent consideration has been understated by more than 15% and in exercise of powers vested under Section 269ud (1) of the Income-tax Act ordered to purchase the said land. It is submitted that the petitioner has purchased the said land in the public auction held by the Charity Commissioner. The Charity Commissioner has found that the bid of the petitioner was the highest and therefore accorded sanction under Section 36 of the Act. Therefore in the present case there is no question of undervaluing the land for its purchase. It is further contended by the petitioner that the notice given by the department is absolutely vague and illegal and it does not disclose any reason or ground as to why the property was sought to be compulsorily purchased. ( 2 ) ). Mr. Shelat learned Advocate appearing on behalf of the respondents submitted that it cannot be held that merely because the land was sold in a public auction there cannot be any undervaluation. He further submitted that the notice was sent to the petitioner at the address mentioned in Form 37-I but it was returned unserved by the postal authorities with a remark not known. As the correct address was not known to the department the officer of the second respondent contacted the President of the Association on phone who was asked to collect the show-cause notice on 1st February 1994 but nobody has turned up to collect the show-cause notice on behalf of the petitioner. ( 3 ) ). In our view the contentions raised by the petitioner are required to be accepted. It is apparent that the petitioner has agreed to purchase the land as per Banakhat dated 10th June 1992 (Annexure B to the petition ). Subsequently an application was submitted by the Trust before the Charity Commissioner to grant sanction for sale. Of the said land. In our view the contentions raised by the petitioner are required to be accepted. It is apparent that the petitioner has agreed to purchase the land as per Banakhat dated 10th June 1992 (Annexure B to the petition ). Subsequently an application was submitted by the Trust before the Charity Commissioner to grant sanction for sale. Of the said land. Thereafter the Charity Commissioner issued a public notice and invited offers for purchase of the said land. Two offers were received by the Charity Commissioner one of them for Rs. 22 lakhs was not acceptable because it was conditional. The petitioner thereafter offered Rs. 22 lakhs and its offer was accepted by the Charity Commissioner. Thereafter an argeement to sell was executed between the Trust and the petitioner and it was subject to the sanction by the Charity Commissioner under Section 36 of the Act as well as by the appropriate authority under the Income-tax Act. So it is apparent that the petitioner entered into an agreement to purchase the property on the basis of advertisement issued by the Charity Commissioner for sale of the said land. Offers were invited from the public at large. Except where it is alleged that there was fraud for such other reasons in normal circumstances the amount offered by the petitioner is required to be considered as market value of the land that is to say the highest price realized at the time of public auction is required to be accepted as market value of the land. ( 4 ) ). Further in the present case the land is owned by a public trust and the public trust is required to obtain sanction of the Charity Commissioner under Section 36 (1) of the Act. ( 4 ) ). Further in the present case the land is owned by a public trust and the public trust is required to obtain sanction of the Charity Commissioner under Section 36 (1) of the Act. The decision of the Charity Commissioner under sub-Section (1) of Section 36 is required to be 39 published in a local newspaper having circulation in the area where the property concerned is situated as per Rule 24 (4) of the Bombay Public Trusts (Gujarat) Rules 1961 Rule 24 (4) further provides that the decision of the Charity Commissioner is required to be published in a manner sufficient to give information about the material particulars regarding the number of the application for sanction the name of the public trust the description of the property for the A alienation of which sanction is accorded and the price at which it is proposed to be sold or mortgaged or the rent at which and the period for which it is proposed to be leased and the substance of such decision. After the said decision is published if any person is aggrieved by such decision he is entitled to file an appeal to the Gujarat State Revenue Tribunal within 30 days from the date of its publication. Admittedly it is the say of the petitioner that at present none has filed any appeal against the decision of the Charity Commissioner. ( 5 ) ). In light of the aforesaid facts it is apparent that there was no reason for the appropriate authority to resort to the provisions of Chapter XXC of the Income-tax Act. It would be difficult to arrive at a conclusion that there is significant undervaluation of property to the extent of 15% or more in the agreement of sale as evidenced by apparent consideration being lower than the fair market value by 15% or more. Further the property was sold after inviting offers from the public at large by giving advertisement in the newspaper and that. too after proper verification by the statutory authority under the Bombay Public Trust Act. Even after executing the agreement to sell objections are invited as provided under Rule 24. Further the property was sold after inviting offers from the public at large by giving advertisement in the newspaper and that. too after proper verification by the statutory authority under the Bombay Public Trust Act. Even after executing the agreement to sell objections are invited as provided under Rule 24. Hence in such type of case even if some lower amount is received it would not mean that power to purchase the said property under Section 269ud of the Income-tax Act can be exercised by the authorities under Chapter XXC as it would be difficult to draw a presumption that there was an attempt to evade tax. This is made abundantly clear by the Supreme Court in the case of C. B. Gautam v. Union of India [1993] 199 ITR 530. The relevant observations of the Supreme Court are as under: as we have already pointed out the provisions of Chapter XXC can be resorted to only where there is a significant undervaluation of property to the extent of 15 per cent or more in the agreement of sale as evidenced by the apparent consideration being lower than the fair market value by 15 per cent or more. We have further pointed out that although a presumption of an attempt to evade tax may be raised by the appropriate authority concerned in case of the aforesaid circumstances being established such a presumption is rebuttable and this would necessarily imply that the concerned parties must have an opportunity to show cause as to why such a presumption should not be drawn. Moreover in a given transaction of an agreement to sell there might be several bona fide consideration which might induce a seller to sell his immovable property at less than what might be considered to be the fair market value. For example the might be in immediate need of money and unable to wait till a buyer is found who is willing to pay the fair market value for the property. There might be some dispute as to the title of the immovable property as a result of which it might have to be sold at a price lower than the fair market value or a subsisting lease in favour of the intending purchaser. There might be some dispute as to the title of the immovable property as a result of which it might have to be sold at a price lower than the fair market value or a subsisting lease in favour of the intending purchaser. There might similarly be other genuine reasons which might have led the seller to agree to sell the property to a particular purchaser at less than the market value even in cases where the purchaser might not be his relative. (Emphasis supplied.) ( 6 ) ). Applying the aforesaid ratio in the present case it cannot be said that there was an attempt to evade tax. The appropriate authority has not come to the conclusion that there was a fraud at the time of public auction or that the amount so offered by the petitioner was not genuine for some reasons. Apparently it was a bona fide sale of the property after inviting the offers from the public at large by giving an advertisement in the newspaper. The public trust is not required to wait till it finds a buyer who is willing to pay the price of the property which the appropriate authority thinks to be the market value. Hence on this ground the impugned order passed by the appropriate authority requires to be quashed and set aside. ( 7 ) ). Mr. Soparkar learned Advocate appearing on behalf of the petitioner vehemently submitted that the show-cause notice issued by the appropriate authority is absolutely vague and it has not mentioned the grounds or the sale instances on which it seeks to place reliance for exercising the power of pre-emptive purchase. He further submitted that except the appropriate authority in the State of Gujarat the appropriate authorities in other States are issuing exhaustive show-cause notices so that the affected persons can represent their cases properly. ( 8 ) ). In our view considering the findings given above it is not necessary to deal with the aforesaid contention exhaustively. However it should be noted that issuance of a show-cause notice is not an empty formality. Its purpose is to give a reasonable opportunity to the affected persons to contend that the apparent consideration as per the agreement to sell is the market price or a that there is no undervaluation because of peculier facts. However it should be noted that issuance of a show-cause notice is not an empty formality. Its purpose is to give a reasonable opportunity to the affected persons to contend that the apparent consideration as per the agreement to sell is the market price or a that there is no undervaluation because of peculier facts. Therefore before taking any action under Section 269ud (1) of the Income-tax Act the appropriate authority should give to the person likely to be affected by the order proposed to be made a notice of the action intended to be taken inform him about the material on the basis of which the appropriate authority proposes to take action of pre-emptive purchase and give a fair and reasonable opportunity to such persons to represent his case and to correct or controvert the material sought to be relied against him. Hence in the show-cause notice under Section 269 of the Income-tax Act provisional conclusions are required to be briefly specified. If a vague show-cause notice is given without specifying anything of the grounds for holding that the property is required to be purchased under Section 269ud of the Income-tax Act then it can be held that the reasonable opportunity of showing the cause against an order for pre-emptive purchase being made by the appropriate authority was not given because the transferor and the transferee would be totally unaware of the grounds which had prompted the appropriate authority to arrive at a prima facie conclusion that the power under Section 269ud (1) of the Income-tax Act was required to be exercised and the property should be compulsorily purchased. Issuance of a show cause notice is the preliminary step which is required to be undertaken before giving opportunity of hearing under Section 269 (UD) (1) of the Income-tax Act. ( 9 ) ). While considering the contents of a show-cause notice in the matter arising in connection with the disciplinary proceeding under the Punjab Civil Services (Punishment and Appeal) Rules 1952 the Supreme Court has in the case of B. D. Gupta v. State of Haryana AIR 1972 Supreme Court 2742 observed as under: there is nothing however in the Show-Cause Notice of 26th October 1966 to indicate clearly that the dissatisfaction of Government with the appellants reply of 18 December 1956 had nothing to do with Charge 1 (a ). The Show Cause Notice merely states in vague general terms that the appellants reply to the charges and allegations was unsatisfactory. Even if we were to assume though there is no reasonable ground for this assumption that Government did not have in mind the contents of Charge 1 (a) while serving this Show-Cause Notice there is nothing in the Show-Cause Notice to give any indication that the particular allegations regarding which the appellant had failed to furnish a satisfactory explanation were referable only to Charge 1 (b ). The notice is vague on other grounds as well. As one reads the first paragraph of the notice the questions that at once assail ones mind are many: In what way was the explanation of the appellant unsatisfactory ? Which part of the appellants explanation was so unsatisfactory ? On what materials did the Government think that the appellants explanation was unsatisfactory ? It is to our mind essential for a Show-Cause Notice to indicate the precise scope of the notice and also to indicate the points on which the officer concerned is expected to give a reply. (Emphasis supplied.) the same would be the position here. It would be difficult for the transferor and the transferee to show cause as to why the property should not be compulsorily purchased or to point out that there is no undervaluation of the property or even if there is undervaluation it is because of the peculiar facts regarding the property. ( 10 ) ). In the result the petition is allowed. The impugned order dated 23rd February 9 1993 (Annexure A) passed by the appropriate authority is quashed and set aside. The appropriate authority is directed to issue no objection certificate under sub-Section (1) of the Section 269 of the Income-tax Act to the petitioner. Rule made absolute to the aforesaid extent with no order as to costs. ( 11 ) ). At the request of the learned Advocate for the respondents operation of this order is stayed upto 1st August 1994. .