Section 269UD: Purchase of Immovable Property by the Central Government
Section 269UD formed part of Chapter XX-C of the Income-tax Act, 1961, which allowed the Central Government to purchase certain immovable properties proposed to be transferred, at their apparent consideration. The provision is now primarily of historical relevance, including for disputes arising from older transactions.
Purpose and scope of Section 269UD
The historic regime sought to address suspected understatement of consideration in specified immovable-property transactions. Under Section 269UC, qualifying proposed transfers were reported to an appropriate authority, a statutory body described in Section 269UB. Section 269UD governed the authority's decision whether the Central Government would purchase the property.
Apparent consideration is a defined expression in Section 269UA and, broadly, referred to the consideration determined according to the statutory rules for the particular kind of transfer. It should not automatically be equated with stamp duty value or open-market value.
Section 269UD explained subsection by subsection
Section 269UD(1): Purchase order and limitation
After receiving the statement required by Section 269UC(3), the appropriate authority could order purchase of the immovable property by the Central Government for an amount equal to its apparent consideration, subject to subsections (1A) and (1B).
The original limitation was two months from the end of the month in which the statement was received. For statements received on or after 1 June 1993, the amended proviso prescribed three months. The statutory provisos also addressed the computation of the period where a defective statement was rectified, where the statement reached an authority without jurisdiction, or where a court had stayed the passing of an order. These time limits describe the historic process and are not fresh deadlines for post-June 2002 transfers.
Section 269UD(1A): Reasonable opportunity of hearing
Before making a purchase order, the authority had to give a reasonable opportunity of being heard to the transferor, the proposed transferee, any occupant who was not the transferor, and every other person known to be interested in the property. This protected affected persons against an adverse decision without a hearing.
Section 269UD(1B): Grounds must be specified
Every purchase order under subsection (1) had to specify the grounds on which it was made. The statutory duty to state grounds supported transparency and meaningful legal scrutiny of the decision.
Section 269UD(2): Service of purchase order
A copy of the order had to be served on the transferor, the transferee, the non-transferor occupant where applicable, and every other person known to the authority to be interested in the property.
Historical procedure at a glance
- The parties proposed a qualifying transfer and furnished the prescribed statement under Section 269UC.
- The appropriate authority considered the statement and the statutory limitation period.
- Before ordering purchase, affected persons received a reasonable opportunity of hearing.
- If the authority ordered purchase, the order specified grounds and was served on the relevant persons.
- Related provisions dealt with vesting of property, payment of consideration and the consequences of non-payment.
Related provisions and legal consequences
Section 269UA defined expressions including immovable property, transfer and apparent consideration. Section 269UB addressed constitution and jurisdiction of the appropriate authority. Section 269UE dealt with vesting of property in the Central Government following a purchase order. Section 269UF concerned the amount payable by the Government. Sections 269UG and 269UH addressed payment or deposit and re-vesting in specified circumstances. Section 269UL addressed restrictions on registration and no-objection certification under the historic scheme.
These linked provisions must be read together when examining an older purchase order, title dispute or pending proceeding. Section 269UP is decisive for whether Chapter XX-C applies to the date of the transfer.
Important legislative changes
The Finance Act, 1993 introduced the express hearing and grounds requirements with retrospective effect from 17 November 1992, and changed the limitation rule for statements received from 1 June 1993. The Finance Act, 1995 made further changes affecting the calculation of the limitation period. The Finance Act, 2002 inserted Section 269UP with effect from 1 July 2002, ending the application of Chapter XX-C to transfers effected from that date.
Frequently asked questions
Does Section 269UD apply to property sales in 2026?
No. Section 269UP makes Chapter XX-C inapplicable to transfers effected on or after 1 July 2002. Other applicable property-registration and tax provisions must be considered separately.
Was a hearing required before compulsory purchase?
Yes. Section 269UD(1A) required a reasonable opportunity of hearing for the specified affected persons before an order under subsection (1).
What consideration was payable for a purchase under Section 269UD?
The order contemplated purchase at the apparent consideration, a defined statutory amount. Section 269UF addressed payment and specified adjustments.
Can Section 269UD still matter in an old dispute?
Yes. It may be relevant to historic transactions, orders and litigation, depending on the transfer date and the procedural history.
Official legal references
- Income Tax Department: Section 269UD
- Income Tax Department: Section 269UP
- Finance Act, 2002: insertion of Section 269UP
- Income-tax Act, 1961: official consolidated text (Finance Act, 2025)
This article explains the historical statutory framework for general information. For a dispute involving a pre-July 2002 transaction, review the relevant version of the Act, orders, dates and case law.