Section 269AB — Registration of Certain Transactions

CHAPTER XX-A — ACQUISITION OF IMMOVABLE PROPERTIES IN CERTAIN CASES OF TRANSFER TO COUNTERACT EVASION OF TAX

Section 269AB — Registration of certain transactions

Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise

Status: Historic / spent. A later insertion (with effect from 1 July 1982) designed to bring possession-based and long-lease arrangements within the acquisition net before the Chapter's sunset on 30 September 1986 (section 269RR).

Finance Act, 2026: No amendment. The Finance Act, 2026 does not touch any provision of Chapter XX-A.

Mechanism: Requires the parties to certain non-registered transactions (transfer of possession in part performance, and leases/extensions taking the aggregate term to twelve years or more) to furnish a statement to the competent authority, which is then treated as the 'instrument of transfer'.

Litigation profile: Narrow anti-avoidance machinery; no reported merits litigation specific to it.

A. COMMENTARY

Purpose

Section 269AB plugged a gap. Section 269A's definition of 'transfer' reached possession in part-performance and long leases, but such arrangements often escaped registration under the Registration Act and therefore left no 'instrument of transfer' to anchor the nine-month limitation in section 269D. Section 269AB obliged the parties to file a statement of the transaction with the competent authority; that statement is then deemed the 'instrument of transfer' for the Chapter (see the definition in section 269A(f)).

Mechanism

The provision is purely procedural/registrational — it creates a filing obligation and a deeming, not an independent charge. Its operative life was short: inserted only a few years before the Chapter ceased to apply to post-30-September-1986 transfers.

Candour

No reported decision turns on section 269AB in isolation. It is best understood alongside the 'transfer' and 'instrument of transfer' definitions in section 269A and the limitation mechanism in section 269D. The authorities below are cited as cognate context, not as direct rulings on this section.

B. STATUTORY TEXT (verbatim)

Reproduced verbatim from the Income-tax Act, 1961, as amended up to the Finance Act, 2025 (the Finance Act, 2026 makes no change). Page-header/footer artefacts of the source PDF have been removed; wording, clause-lettering and punctuation are unaltered.

Registration of certain transactions.

269AB. (1) The following transactions, that is to say,—

(a) every transaction involving the allowing of the possession of any immovable property 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 (4 of 1882), and

(b) every transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement of whatever nature) whereby a person acquires any rights in or with respect to any building or part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed [not being a transaction by way of sale, exchange or lease of such building or part of a building which is required to be registered under the Registration Act, 1908 (16 of 1908)], shall be reduced to writing in the form of a statement by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties.

(2) Every statement in respect of a transaction referred to in sub-section (1) shall—

(a) be in the prescribed form ;

(b) set forth such particulars as may be prescribed ; and

(c) be verified in the prescribed manner, and registered with the competent authority, in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties.

C. AUTHORITIES

Candour rule: section 269AB is narrow registrational machinery with no direct reported authority. The cognate decisions explain the 'transfer'/'instrument of transfer' concepts it serves.

Cognate — 'transfer', limitation and procedural discipline

How the deemed 'instrument of transfer' fits the Chapter's machinery.

CIT v. Smt. Vimlaben Bhagwandas Patel and Smt. Kamlaben Kanjibhai Patel — [1979] 118 ITR 134 (Gujarat) (decided 25 January 1979)

Facts Notice under section 269D(1) initiating acquisition of two industrial sheds transferred below the competent authority's estimate of fair market value; the transferee challenged initiation.

Held The leading judgment on Chapter XX-A. The acquisition machinery is expropriatory and penal in character and must be construed strictly. Initiation under section 269C(1) requires the competent authority to entertain reason to believe BOTH limbs of the 'twin conditions' — (i) that the fair market value exceeds the apparent consideration (understatement), and (ii) that the consideration was not truly stated with the ulterior object in clause (a) or (b) (reduction/evasion of the transferor's tax or concealment by the transferee). The statutory presumptions in section 269C(2) belong to the post-initiation adjudicatory stage (section 269F) and cannot supply the reason to believe at the threshold.

Also Where the authority records more than one ground, the initiation is not vitiated merely because one ground is later found defective, so long as a valid ground survives. Reasons must have a rational nexus with the material.

Smt. Bani Roy Chowdhury v. Competent Authority, Inspecting Assistant Commissioner of Income-tax, Acquisition Range II — [1978] 112 ITR 111 (Calcutta); per Ramendra Mohan Datta J (decided 18 June 1976)

Held The presumptions in section 269C(2) operate only at the stage of adjudication of objections and cannot be pressed into service to form the 'reason to believe' for initiation under section 269C(1); at that threshold the authority must possess material independent of the statutory presumptions.

Also Simultaneously anchoring the belief to both clauses (a) and (b) of section 269C(1) betrayed non-application of mind; the authority had wrongly treated a confirming party (Hindusthan Building Society Ltd.) as a transferor, and had relied on irrelevant advertisements/comparables for fair market value.

Result The section 269D(1) notice was quashed — an early and influential statement of the procedural discipline governing Chapter XX-A.