Section 269L — Assistance by Valuation Officers

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

Section 269L — Assistance by Valuation Officers

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

Status: Historic / spent. Chapter XX-A was inserted by the Taxation Laws (Amendment) Act, 1972, with effect from 15 November 1972, and does not apply to transfers of immovable property made after 30 September 1986 (section 269RR). It stands superseded by Chapter XX-C and, for current transactions, by section 50C / section 56(2)(x).

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

Mechanism: Enables the competent authority to obtain the assistance of a Valuation Officer to estimate fair market value, and regulates that reference.

Litigation profile: Valuation-machinery provision; the substance is the valuation jurisprudence it feeds.

A. COMMENTARY

Role of the Valuation Officer

Section 269L brings expert valuation into the Chapter: the competent authority may refer the estimation of fair market value to a Valuation Officer. Because the entire Chapter turns on the gap between fair market value and apparent consideration, the integrity of this valuation is central — a flawed or unsupported valuation (as in Bani Roy Chowdhury) is fatal.

Acceptable methods

The valuation produced must withstand scrutiny on accepted principles — the belting method for urban land (Madho Properties, following Mathura Prosad Rajgharia) and the objective fair-market-value standard (Tribeni Devi). A valuation built on irrelevant comparables or advertisements will not support acquisition (Bani Roy Chowdhury).

Candour

Section 269L itself is machinery; its jurisprudence is the valuation case-law set out below.

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.

Assistance by Valuation Officers.

269L. (1) The competent authority may,—

(a) for the purpose of initiating proceedings for the acquisition of any immovable property under section 269C or for the purpose of making an order under section 269F in respect of any immovable property, require a Valuation Officer to determine the fair market value of such property and report the same to him ;

(b) for the purpose of estimating the amount by which the compensation payable under sub-section (1) of section 269J in respect of any immovable property may be reduced or, as the case may be, increased under clause (a) or clause (b) of sub-section (2) of that section, require the Valuation Officer to make such estimate and report the same to him.

(2) The Valuation Officer to whom a reference is made under clause (a) or clause (b) of sub-section (1) shall, for the purpose of dealing with such reference, have all the powers that he has under section 38A of the Wealth-tax Act, 1957 (27 of 1957).

(3) If in an appeal under section 269G against the order for acquisition of any immovable property, the fair market value of such property is in dispute, the Appellate Tribunal shall, on a request being made in this behalf by the competent authority, give an opportunity of being heard to any Valuation Officer nominated for the purpose by the competent authority.

Explanation.—In this section, "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).

C. AUTHORITIES

The Valuation Officer's estimate must rest on accepted valuation principles; the authorities below supply the standard.

Valuation principles and methods

CIT, West Bengal-II v. Madho Properties Ltd. — Calcutta High Court, per Dipak Kumar Sen & C.K. Banerji JJ (decided 12 September 1980)

Held The 'belting method' of valuing urban land (the front belt valued highest and successive rear belts at a discount by distance from the road) is a scientific and acceptable mode of arriving at fair market value when supported by data; it was approved following Mathura Prosad Rajgharia v. State of West Bengal (SC) and Smt. Tribeni Devi v. Collector, Ranchi (SC).

Also Reaffirmed that the section 269C(2) presumptions cannot be invoked at the initiation stage; the Tribunal's adoption of the belting method was upheld and the Revenue's appeal dismissed.

Mathura Prosad Rajgharia v. State of West Bengal — Supreme Court

Cognate (valuation) Approved the belting method for valuing urban land acquired compulsorily; the method is scientific where the diminution of value with distance from the road is borne out by data. Applied in Madho Properties to fair market value under Chapter XX-A.

Smt. Tribeni Devi v. Collector, Ranchi — Supreme Court

Cognate (valuation) Fair market value must be assessed on an objective standard, taking account of the property's present condition and its reasonable potential; guidance relied upon for the 'fair market value' enquiry under sections 269A/269C/269J.

Flawed valuation vitiates proceedings

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.