Section 269R — Properties Liable for Acquisition Under This Chapter Not to be Acquired Under Other Laws

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

Section 269R — Properties liable for acquisition under this Chapter not to be acquired under other laws

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 It stands superseded by Chapter XX-C and, for current transactions, by section 50C / section 56(2)(x).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: Gives Chapter XX-A primacy: property liable to acquisition under it is not to be acquired for a Union purpose under the Land Acquisition Act, 1894 (or corresponding law) unless the Chapter's time for initiation has expired without initiation, or the competent authority has declared it will not be acquired under the Chapter.

Litigation profile: Overlap/priority provision resolving the interface with general land-acquisition law; no independent merits litigation.

A. COMMENTARY

Resolving overlap

Section 269R prevents a clash between the tax-acquisition code and the general Land Acquisition Act, 1894. While the Chapter's window is open, the property is reserved to it; only after the window closes without initiation, or after the competent authority declares it will not acquire, can the property be taken for the Union under the general law. The provision is one of priority and sequencing, not of substantive valuation.

Candour

No reported decision turns on section 269R; it is an interface rule. The cognate authorities are relevant only to the antecedent question whether the Chapter applied at all.

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.

Properties liable for acquisition under this Chapter not to be acquired under other laws.

269R. Notwithstanding anything contained in the Land Acquisition Act, 1894 (1 of 1894), or any corresponding law for the time being in force, no immovable property referred to in section 269C shall be acquired for any purpose of the Union under that Act or such law unless the time for initiation of proceedings for the acquisition of such property under this Chapter has expired without such proceedings having been initiated or unless the competent authority has declared that such property will not be acquired under this Chapter.

C. AUTHORITIES

Candour rule: a priority/interface provision; no direct authority.

Cognate — whether the Chapter applied (the antecedent question)

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.

Mahavir Metal Works (P.) Ltd. v. Union of India — [1974] 95 ITR 197 (Delhi)

Held Constitutional validity of Chapter XX-A upheld. Compulsory acquisition of undervalued property, on payment of compensation equal to the apparent consideration plus the statutory solatium, is a reasonable restriction in the interest of countering tax evasion and does not offend Articles 14, 19(1)(f) or 31 of the Constitution.

Why The in-built safeguards — recorded reason to believe, Gazette notice, individual notice, objections, hearing and appeals — rescue the scheme from arbitrariness.