Sections 269E and 269F of Income Tax Act 1961
Sections 269E and 269F formed the objection and hearing stage of Chapter XXA, the historical regime for acquisition of certain immovable properties where consideration was alleged to have been understated for specified tax-related purposes. Section 269E prescribed who could object and the applicable time limits. Section 269F governed hearing, inquiry and the final acquisition or non-acquisition order.
Section 269E - Objections against acquisition
Section 269E permitted objections after publication in the Official Gazette of the preliminary notice under Section 269D(1).
Who could object and within what time?
- The transferor, transferee, person in occupation where applicable, and other persons falling within Section 269D(2)(a) could object within forty-five days from publication of the Gazette notice or thirty days from service of notice on that person, whichever period expired later.
- Any other person interested in the immovable property could object within forty-five days from publication of the notice.
Objection had to be in writing
Every objection under Section 269E(1) was required to be made in writing to the competent authority.
Challenge to the twenty-five per cent valuation condition
Section 269E(3) expressly declared that an objector could contend that Section 269C(2)(a) did not apply because the fair market value of the property did not exceed the apparent consideration by more than twenty-five per cent of the apparent consideration.
Section 269F - Hearing of objections
Section 269F prescribed the adjudicatory procedure after objections were filed under Section 269E.
Notice of hearing
The competent authority had to fix a day and place for hearing the objections and give notice to every person who had objected. Notice also had to be given to the transferee even if the transferee had not filed an objection.
Right to be heard
Every person receiving notice under Section 269F(1) had a statutory right to be heard at the hearing of the objections.
Adjournment and further inquiry
The competent authority could adjourn the hearing from time to time and, before disposing of the objections, could make such further inquiry as considered fit.
Reasoned written decision
The decision on the objections had to be in writing and had to state the reasons for the decision with respect to each objection.
Conditions for an acquisition order
After hearing the objections, if any, and considering all relevant material on record, an acquisition order could be made only if the competent authority was satisfied that:
- the immovable property had a fair market value exceeding one hundred thousand rupees;
- its fair market value exceeded the apparent consideration by more than fifteen per cent of the apparent consideration; and
- the consideration agreed between the parties had not been truly stated in the instrument of transfer with an object referred to in Section 269C(1)(a) or (b).
The competent authority also had to obtain the approval of the Principal Commissioner or Commissioner before making an acquisition order.
Meaning of Principal Commissioner or Commissioner
For Section 269F(6), the expression meant the Principal Commissioner or Commissioner specified by the Board, by general or special written order, in relation to the competent authority.
Where acquisition conditions were not satisfied
If the competent authority was not satisfied as required by Section 269F(6), it had to declare by written order that the property would not be acquired under Chapter XXA.
Service of the final order
A copy of the order under Section 269F(6) or Section 269F(7) had to be served on the transferor, transferee and every person who had made objections under Section 269E.
Restriction under Section 269F(9)
The provision restricted an objection based on the argument that, although apparent consideration was below fair market value on the relevant statutory date, the stated consideration was nevertheless true because it reflected the open-market price on the earlier date of the agreement to transfer. The restriction did not apply where that agreement had been registered under the Registration Act, 1908.
Connected provisions
Section 269C: laid down the substantive valuation and tax-evasion conditions for initiating acquisition proceedings.
Section 269D: governed preliminary notice, Gazette publication, service and local publication.
Section 269G: provided the appellate route against an acquisition order made under Section 269F(6).
Registration Act, 1908: registration of an agreement was specifically relevant to the exception contained in Section 269F(9).
Official references
Income Tax Department - Income-tax Act
Income Tax Department e-Filing Portal