Section 269C of the Income-tax Act, 1961: Immovable Property Subject to Acquisition
An explanation of the historical power to initiate acquisition proceedings where immovable property was transferred for an understated consideration, together with the statutory thresholds, presumptions and limitations.
What did Section 269C provide?
Section 269C permitted the competent authority to initiate acquisition proceedings where there was reason to believe that the fair market value of transferred immovable property exceeded the stated consideration and that the actual agreed consideration had been concealed for the tax-related purposes specified in the section. The authority had to record reasons before initiating proceedings.
Key terms and statutory thresholds
Competent authority
An authority empowered under Section 269B to exercise functions under Chapter XXA.
Fair market value and apparent consideration
Fair market value generally refers to the price the property would ordinarily fetch in the open market under the applicable definition. Apparent consideration refers to consideration determined under the detailed rules in Section 269A; it is not necessarily identical to a modern stamp-duty value.
Thresholds under Section 269C
The provision referred to property with fair market value exceeding Rs. 1,00,000 (following the 1984 amendment). The competent authority also needed reason to believe that fair market value exceeded apparent consideration by more than 15%. Under subsection (2)(a), a difference of more than 25% operated as conclusive proof of understatement of agreed consideration for proceedings under the Chapter. Subsection (2)(b) established a rebuttable presumption about the specified tax-evasion or concealment purpose.
Section 269C: Statutory text retained from the source page
(1) Where the competent authority has reason to believe that any immovable property of a fair market value exceeding one hundred thousand rupees has been transferred by a person (hereafter in this Chapter referred to as the transferor) to another person (hereafter in this Chapter referred to as the transferee) for an apparent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object of
(a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer ; or
(b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act or the Wealth-tax Act, 1957 (27 of 1957), the competent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter:
Provided that before initiating such proceedings, the competent authority shall record his reasons for doing so:
Provided further that no such proceedings shall be initiated unless the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more than fifteen per cent of such apparent consideration.
(2) In any proceedings under this Chapter in respect of any immovable property,
(a) where the fair market value of such property exceeds the apparent consideration therefor by more than twenty-five per cent of such apparent consideration, it shall be conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer ;
(b) where the property has been transferred for an apparent consideration which is less than its fair market value, it shall be presumed, unless the contrary is proved, that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with such object as is referred to in clause (a) or clause (b) of sub-section (1).
1 Subs. by Act 21 of 1984, s. 25, for twenty-five thousand rupees (w.e.f. 1-6-1984).
How the acquisition mechanism operated
The authority first formed and recorded its reasons under Section 269C. The next procedural stage involved preliminary notice under Section 269D, followed by the opportunity to object under Section 269E and the hearing provisions of Section 269F. Appeal provisions appeared in Sections 269G and 269H. These are descriptions of the historical Chapter XXA process, not instructions for commencing a new proceeding over a present-day transfer.
Position under later income-tax legislation
Chapter XXA was superseded in practical application to later property transfers by the statutory cut-off in Section 269RR. Property transactions may instead engage other income-tax, stamp-duty, registration and anti-evasion provisions, depending on the transaction date and facts. The Income-tax Act, 2025 came into force on 1 April 2026; the governing legislation and any savings or transitional rules must be checked for the relevant tax year and proceeding. No direct present-day equivalent to this historical acquisition trigger should be assumed.
Official legal references
Consult the Income Tax Department, India Code, and the Income Tax e-Filing portal for current legislation and guidance. For a historical dispute, consult the text and amendments applicable to the transfer date.
Editorial note: The statutory wording above is reproduced from the supplied historical webpage with layout and footnote-marker cleanup; the explanatory sections are editorial commentary. This page is general legal information, not advice for a particular transaction.