D. H. NASIR, M. B. SHAH, J. ( 1 ) ). On 21-4-1994, Petitioners No. 1 to 3 entered into an agreement to sell the property under consideration to petitioner No. 4. The petitioners submitted Form No. 37-1 to the Appropriate Authority as required under Chapter XX-C of the Income Tax Act, 1961 (for short hereinafter referred to as " the Act") on 27-6-1994. The petitioners were asked by the Valuation Officer of the Appropriate Authority, to furnish certain information and documents. On 7-7-1994, the petitioners furnished the requisite documents to the valuation Officer. ( 2 ) ). Thereafter on 14-9-1994, i. e. virtually after a period of two-and-a half months the Appropriate Authority issued Notice under Section 269ud (1a) of the Act to the petitioners calling upon them to show cause as to why an order of preemptive purchase should not be made of the property under consideration, and the appropriate Authority fixed the date 26-9-1994 for the hearing of the matter. ( 3 ) ). It is the say of the petitioners that they gave detailed reply to the above said show cause notice, alongwith the Municipal Corporation map showing the location of the property under consideration a dn other comparative sale instances. It is their further say that on 28-9-1994, two members of the Appropriate Authority inspected the property under consideration. Again on 30-9-1994, petitioner No. 1 gave one letter dated 29-9-1994, addressed to the Appropriate Authority, pointing out: (i) that the review of the ceiling law case of the petitioners, by the State Government was pending; and (ii) that availing of higher F. S. I. Increases the cost. ( 4 ) ). Thereafter the petitioners received from the Appropriate Authority, the order dated 30-9-1994 (Annexure-K to the petition), ordering purchase of the property under consideration, and determining Rs. 66,93,113. 00 as the amount payable to the vendors, and alongwith the said order the petitioners were directed to hand over the possession of the property on 12=10-1994. The petitioners have challenged the said order at Annexure-K in this petition by raising various contentions. ( 5 ) ). It is the contention of the petitioners that petitioners No. 1 to 3 who are the co-owners of the property under consideration, agreed to sell Final Plot No. 213 of T. P. Scheme No. 14, Ahmedabad admeasuring 2095 sq. Mtrs. Situated in Shahibaug Area to petitioner No. 4. ( 5 ) ). It is the contention of the petitioners that petitioners No. 1 to 3 who are the co-owners of the property under consideration, agreed to sell Final Plot No. 213 of T. P. Scheme No. 14, Ahmedabad admeasuring 2095 sq. Mtrs. Situated in Shahibaug Area to petitioner No. 4. They have agreed to sell the said plot to petitioner No. 4, which is a Co-operative Housing Society for a consideration of Rs. 69,00 lacs. Petitioner No. 4 purchased the said plot for the residential requirements of the members of the said Housing Society. ( 6 ) ). It is the further say of the petitioners that they received the Notice dated 14-9-1994 under Section 269ud (1a) of the Act (Annexure-G) issued by the Appropriate Authority. Wherein in paragraph 2, the said authority has relief upon one sale instance. The relevant part of the said paragraph 2 is as under: " Your attention is invited to the following sale instance: Property underconsideration Sale Instanceproperty 1. File No. 855 636 2. Date of agreement May, 1994 4-5-93 3. Description of property Land and Bldg. At Dariapur Kazipurnaroda, Div. No. 6 E. P. No. 213 of T. P. S 14. Ahmedabad Land at Dariapurkazipur, E. P. No. 229/2c+d/part of T. P. S. 14,abad. 4. Consideration Apparent Discounted Rs. 69,00,000/-Rs. 66,93,113/- Rs. 15,87,454. 00rs. 15,56,824/- 5. Area of land 2095 sq. Mtrs. 490. 92 6. F. S. I. Permissible 1. 5 1. 0 1. Rate per sq. mtr afterconsidering scrap value ofbldg. Consideration Rs. 3,216. 00 Rs. 3,103. 00 2. As per discountedconsideration Rs. 3,117. 00 Rs. 3,041. 00 ( 7 ) ). In the said notice, in paragraph 3 it is further stated that the apparent rate of Rs. 3,216. 00 per sq. metre and discounted rate of Rs. 3,117. 00 per metre appear to the understated by more than 15% particularly when the E. S. I. permissible for the two properties and the time lag between two transactions are considered. (Emphasis Supplied.) ( 8 ) ). To the said notice, the petitioners, gave detailed reply dated 26-9-1994, which is at Annexure-H to the petition, wherein, it has been pointed out as under: (a) That the sale instance relied upon is not the correct comparison because (i) The plot of the comparable sale instance is very small to the property under consideration. To the said notice, the petitioners, gave detailed reply dated 26-9-1994, which is at Annexure-H to the petition, wherein, it has been pointed out as under: (a) That the sale instance relied upon is not the correct comparison because (i) The plot of the comparable sale instance is very small to the property under consideration. (ii) The sale instance property is better located as it is situated in the heart of Shahibaug area, while the property under consideration is situated at a distance of more than 1 km. From that plot, and is situated at the border of Cantonment area. (iii) The property under consideration is a low lying plot and during monsoon, rain water would enter into it. (iv) There is a slum area near about the property under consideration, which rules out getting of good sale price. (b) That there is no question of transacting any unaccounted money in the deal. (c) That the total stamp duty is to be borne by the buyer, which would be an additional cost to the buyer. (d) Other comparable sale instances were also pointed out by the petitioners in the said reply. ( 9 ) ). On behalf of the petitioners, it is contended that without considering the aforesaid contentions raised in the reply to the notice, and the arguments advanced on their behalf, the Appropriate Authority has passed the impugned order on 30-9-1994, ordering to purchase the property under consideration and determining Rs. 66,93,113. 00 as payable to the petitioners. ( 10 ) ). It is contended that the impugned order is illegal for the following reasons: (i) The petitioners have filed in Form 37-I on 27-6-1994. The period prescribed for deciding the matter is 3 months. The Appropriate Authority waited for a period of two-and-a half months and on 14-9-1994, gave the notice fixing the hearing on 26-9-1994, i. e. prior to the last date for passing the order. On 28-9-1994, two members of the respondent inspected in hot haste the lands referred to and relied upon by the petitioners in their reply. It is alleged that the members of the respondent authority saw entirely different property than the one relied upon by the petitioners, but stated in the impugned order that the said property is not comparable without stating as to which is the property they saw, and why it is not comparable. It is alleged that the members of the respondent authority saw entirely different property than the one relied upon by the petitioners, but stated in the impugned order that the said property is not comparable without stating as to which is the property they saw, and why it is not comparable. (iii) Submission made by the petitioners by their letter dated 29-9-1994 are not considered by the Authority. (iv) Reliance placed by the Appropriate Authority on the Sale instance is totally without application of mind because - (a) the property under consideration is four times bigger plot than the alleged comparative case, and therefore, its market price is always lower. (b) the property involved in the sale instance is situated in the heart of Shahibaug Area; (c) the property under consideration is a low lying plot and there is water logging in monsoon; (d) the property under consideration is situated at the end of the civil area; (e) there is slum area near the property under consideration; (f) Stamp duty, registration charges and other expenses were payable by the purchaser, which would make the effect price of the property under consideration even more; and (g) The sale instances cited by the petitioners were taken into consideration without application of mind. ( 11 ) ). Further it has been pointed out that the impugned order also had because - (a) In the impugned order, there is no finding of fair market price of the property under consideration, for arriving at the conclusion that the property under consideration is undervalued by more than 15%. (b) There is no finding that there was any attempt on the part of the petitioners to deal in unaccounted money, to evade tax or to undervalue the property under consideration. (c) The appropriate Authority has not considered the fact that the property under consideration is owned by three co-owners because of the will executed in their favour, and that the Valuers give a discount of 10% for the undivided share in the property. ( 12 ) ). Here it may be stated that no affidavit-in-reply has been filed on behalf of the Respondent-Appropriate authority refuting the contentions raised in the petition. ( 12 ) ). Here it may be stated that no affidavit-in-reply has been filed on behalf of the Respondent-Appropriate authority refuting the contentions raised in the petition. ( 13 ) HOWEVER, for deciding this petition, it is not necessary to deal with the various contentions raised by the petitioners, except the one contention with regard to non-application of mind by the Respondent-Appropriate Authority with regard to the fair market value of the property under consideration. ( 14 ) ). In the present case, admittedly, while passing the impugned order the Appropriate-Authority has not arrived at a conclusion about what, according to it, would be the fair market value of the property under consideration, except stating that there is understatement of apparent consideration by more than 15%. ( 15 ) ). The relevant part of the order is in paragraph 4 thereof, which reads as under. " The permissible F. S. I. Of the property under consideration is of 1. 5 as per the redevelopment plan of Ahmedabad Municipal Corporation. Since the F. S. I. Available is 1. 5, it is obvious that the built up area of property under consideration will be more than sale instance property. Moreover, property under consideration is situated on 100 Main Road whereas the sale instance property is situated on 20 wide Private Road abutting 60 wide road. Hence the contention that permissible F. S. I. Is 1. 0 is not tenable. Considering the above facts, the time lag of above one year between two transactions and also considering the minus points of property under consideration, i. e. large plot and situation and location of the property, there is an understatement of apparent consideration by more than 15%. " (Emphasis supplied.) ( 16 ) ). Even in the notice at Annexure-G also, it is not stated as to what would be the market rate of the property under consideration. As stated earlier, what is stated in the notice is that the apparent rate of rs. 3,216/- per sq. mtr. appears to be understated by more than 15% particularly when the F. S. I. Permissible for the two properties, and the time lag between the two transactions are considered. ( 17 ) ). As stated earlier, what is stated in the notice is that the apparent rate of rs. 3,216/- per sq. mtr. appears to be understated by more than 15% particularly when the F. S. I. Permissible for the two properties, and the time lag between the two transactions are considered. ( 17 ) ). From the aforesaid order and also the notice, it is apparent that with regard to the fair market value of the property under consideration, there is total non-application of mind by the respondent Authority. On this count, the Notice as well as the Order are totally vague. While comparing the sale instance, what is the increase in the price because of the time lag is not mentioned. Whether it is exactly more than 15% or more than 20% or more is not mentioned. Further, the Appropriate Authority has not at all arrived at the finding as to what would be the fair market price of the property under consideration, on the basis of the comparable sale instance relied upon by it. In any case, what is the increase in the price is absolutely a matter of conjecture. ( 18 ) ). In support of the aforesaid contention, Mr. J. P. Shah, the learned Counsel appearing for the petitioners rightly relied upon the decision of the Bombay High Court in the case of Vimal Agarwal v. Appropriate authority and Ors. , (1994) 121 CTR (Bom) 99, wherein the court has observed that in order to draw inference of undervaluation, it is necessary to determine first the fair market value of the property in question in light of all attending circumstances. Without doing so, it is not only difficult but impossible to say that the apparent consideration is lower than the fair market value by 15% or more. The figure of fair market value cannot be left to conjectures and surmises, and to justify the order under Section 269ud (1) the Appropriate authority must come to a definite conclusion that undervaluation is more than 15% of the fair market value. ( 19 ) ). In the present case, admittedly, the Appropriate Authority has not determined the fair market value of the property under consideration, and the order is based on surmise that the property under consideration would fetch the price which would be more by 15% of the apparent consideration. ( 19 ) ). In the present case, admittedly, the Appropriate Authority has not determined the fair market value of the property under consideration, and the order is based on surmise that the property under consideration would fetch the price which would be more by 15% of the apparent consideration. In this view of the matter the impugned order under Section 269ud (1) of the Act passed by the Appropriate Authority is illegal and without application of mind to the relevant facts, and therefore, is required to be quashed and set aside. ( 20 ) ). In the result, this petition is allowed. The impugned order dated 30-9-1994 (Annexure-K to the petition) passed by the Appropriate Authority, under Section 269ud (1) of the Income Tax Act, 1961 is quashed and set aside. The respondent Authority is directed to issue the requisite no Objection Certificate to the petitioners within a period of 30 days. Rule made absolute accordingly with no order as to costs. .