The Chief commissioner of income tax(II) KVM Pai told The Financial Express: "The department plans to float tenders for all the properties. For this auction, we had commitments from three public-sector units (PSUs) who did not make it owing to a sudden change in their plans. We will either hold another auction at an appropriate time for them, or float tenders."

The department postponed the auction of a Peddar Road property to 4 pm. This was to have been bought by a Delhi-based PSU. The company, however, backed out at the last minute owing to some urgent internal development.

"Today's auction was kept only because this PSU wanted to buy the property," Pai said. As nine of the 10 properties featured in the auctions for the third time, the department will have the option to sell them through tenders, he added.

Of the 10 auctioned, the department managed to sell just one property atGrant Road, measuring 605 square feet, for about Rs 17.85 lakh. Located in Pakeeza Market, it raked in Rs 1,000 higher than the reserve price.

"It was the only property reasonably priced at the auction," said a Mumbai-based broker on condition of anonymity. According to him, the remaining were priced at least 30-50 per cent higher than the market prices.

Realty experts say the auctions fail to draw bidders as buyers have to pay the maintenance charges doled out by the department from the time they take the property's possession.

For example, the buyer of the two-room flat auctioned on Wednesday has to refund maintenance charges worth Rs 49,977 to the chief commissioner of income tax(II). This was the sum the department had paid to the society from 1996, when it took possession of the property.

Department officials said that barring the one at Sewri this was the third time these properties were being brought to the auctions. The Sewri property, recently acquired by the authorities, went at a reserveprice of Rs 3.1 crore.

The auction was delayed for around 45 minutes as only four bidders turned up at the hall, which otherwise had department officials jostling for space.

Gold Star Property Services' M Balachandran said that the poor response was expected as prices were on the higher side.

For instance, the reserve price for a 1,187 square feet office at the posh Mittal Court, Nariman Point, was Rs 2.18 crore, translating into Rs 18,400 per square feet. This is far higher than the market rate of Rs 12,000-14,000 per square feet.

The department bought these properties when the real-estate market was at an all-time high. It had no option but to sell them at 15 per cent more than the acquisition cost, as the expenditure incurred by it to maintain and organise the sale was factored into the price.

"It is only in Mumbai that the IT auctions are a non-event, with the recession adversely affecting property prices. In Delhi and Pune, the department has been getting a good response to such auctions," Paisaid.

The other properties which remained unsold included a 3,092 square feet plot at Andheri (Rs 1.04 crore), office premises of 4,164 square feet at Annie Besant Road, Worli (Rs 4.96 crore), a 548 square feet built-up flat at Santacruz (Rs 30.48 lakh), a 528 square feet flat at Santacruz (Rs 32.78 lakh), a plot of 2,040 square feet built-up area at the Bandra-Kurla complex (Rs 1.58 crore), and a 1,288 square feet built-up area at Raheja Centre (Rs 2.58 crore).