Sections 269 and 269A of Income Tax Act 1961

Section 269 defines the expression "High Court" for Chapter XX of the Income-tax Act, 1961. Section 269A is a separate definitions provision in historical Chapter XXA, which dealt with acquisition of immovable properties in certain transfer cases to counteract tax evasion.

Section 269 - Definition of High Court

For Chapter XX dealing with appeals and revision, "High Court" means the High Court having the territorial relationship specified by Section 269.

Section 269A - Definitions under historical Chapter XXA

Section 269A supplies specialised definitions used in Chapter XXA. The expressions below have to be understood in the context of that Chapter.

Apparent consideration

For immovable property consisting of land, a building or part of a building and specified associated items, apparent consideration depends on the form of transfer. In a sale it is the consideration specified in the instrument of transfer. For an exchange, it is based on the open-market price of the thing or things forming consideration, together with any money paid. For a lease, it includes the premium, rent and amounts for services or things forming part of the rent, according to the form of consideration.

Where all or part of the consideration is payable after the transfer date, Section 269A provides for the later amount to be treated at its discounted value on the transfer date by adopting an interest rate of eight per cent per annum.

For rights of the kind historically covered through Section 269AB, apparent consideration is the money consideration, open-market price of non-money consideration, or their aggregate, as applicable, again subject to the statutory discounted-value rule for deferred consideration.

Competent authority

The expression identifies the income-tax authority authorised by the Central Government under Section 269B to perform the functions of competent authority under Chapter XXA.

Court

"Court" means a principal civil court of original jurisdiction unless the Central Government appointed a special judicial officer within specified local limits to perform the functions assigned to the court under Chapter XXA.

Fair market value

For a sale or exchange of land or building-type immovable property, fair market value means the price the property would ordinarily fetch in the open market on the date of execution of the instrument of transfer. For a lease, the statutory test is the premium that the transfer would ordinarily fetch in the open market if the consideration had consisted only of premium. For the specified rights covered by clause (e)(ii), it refers to the money consideration the transfer would ordinarily fetch in the open market on the transfer date.

Immovable property

The definition includes land, a building or part of a building. Where transferred together with machinery, plant, furniture, fittings or other things, those items are also included. Rights in those assets are included as well. The definition also historically included rights of the nature referred to in Section 269AB(1)(b).

Instrument of transfer

This means an instrument of transfer registered under the Registration Act, 1908 or, as applicable under the historical Chapter XXA machinery, the statement registered with the competent authority under Section 269AB.

Person interested

In relation to immovable property, the expression includes persons claiming, or entitled to claim, an interest in compensation payable because of acquisition of that property under Chapter XXA.

Transfer

For land or building-type property, "transfer" includes sale, exchange or a lease for a term of not less than twelve years. It also includes allowing possession to be taken or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882. Where a lease can be extended, the original and further terms are aggregated for determining whether the twelve-year threshold is met.

For the rights referred to in Section 269A(e)(ii), transfer includes an act, agreement or arrangement, including through shares in a co-operative society or company, that has the effect of transferring or enabling enjoyment of the property.

Relationship between Sections 269 and 269A

The two provisions are adjacent in numbering but serve different statutory chapters. Section 269 closes the Chapter XX appeals and revision provisions by defining "High Court". Section 269A begins Chapter XXA and defines expressions used for the historical immovable-property acquisition regime.

Official references

Income Tax Department - Section 269
Income Tax Department - Section 269A
Income Tax Department - Income-tax Act