Section 269UG Income Tax Act - Payment or Deposit of Consideration

Overview of Section 269UG

Section 269UG formed part of Chapter XX-C of the Income-tax Act, 1961, which provided for the Central Government's pre-emptive purchase of certain immovable properties. The section prescribed when purchase consideration had to be paid or deposited, how outstanding statutory dues could be adjusted, and how disputed amounts could be safeguarded.

Meaning of important legal terms

Consideration

The amount payable for the Central Government's purchase of property under Section 269UF; ordinarily the apparent consideration defined in Section 269UA, subject to the statutory provisions.

Vesting

The statutory transfer of property to the Central Government under Section 269UE.

Appropriate authority

The authority constituted under Section 269UB to exercise functions under Chapter XX-C.

Apportionment

Allocation of the purchase consideration among two or more persons claiming entitlement.

Set-off

Adjustment of payable consideration against qualifying outstanding statutory liabilities, after the prescribed intimation.

Subsection-wise explanation

Section 269UG(1): Payment deadline and adjustment of dues

The consideration determined under Section 269UF was required to be tendered to the person or persons entitled to it within one month from the end of the month in which the property vested in the Central Government under Section 269UE(1) or 269UE(6). The proviso permitted the appropriate authority to set off specified outstanding tax or other sums under the listed enactments after informing the entitled person.

Section 269UG(2): Dispute over distribution

Where several claimants disputed the division of consideration, the Central Government was required to deposit the amount with the appropriate authority within the same statutory period rather than decide the claimants' shares by unilateral payment.

Section 269UG(3): Refusal to accept or dispute over title

If the entitled person did not consent to receive payment, or entitlement itself was disputed, the amount had to be deposited with the appropriate authority within the statutory period. A recipient remained liable to account to the person ultimately lawfully entitled to the money.

Section 269UG(4): Investment of deposited money

The appropriate authority could direct investment of deposited consideration in suitable Government or other securities, on its own initiative or upon application. Interest or other proceeds could be accumulated and distributed so that interested parties received benefits approximating those they might have enjoyed from the property.

Section 269UG - Statutory provisions

The following text is retained from the original webpage for historical reference, with its wording preserved.

(1) The amount of consideration payable in accordance with the provisions of section 269UF shall be tendered to the person or persons entitled thereto, within a period of one month from the end of the month in which the immovable property concerned becomes vested in the Central Government under sub-section (1), or, as the case may be, subsection (6), of section 269UE:

Provided that if any liability for any tax or any other sum remaining payable under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Gift-tax Act, 1958 (18 of 1958), the Estate Duty Act, 1953 (34 of 1953), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), by any person entitled to the consideration payable under section 269UF, the appropriate authority may, in lieu of the payment of the amount of consideration, set off the amount of consideration or any part thereof against such liability or sum, after giving an intimation in this behalf to the person entitled to the consideration.

(2) Notwithstanding anything contained in sub-section (1), if any dispute arises as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein.

(3) Notwithstanding anything contained in sub-section (1), if the person entitled to the amount of consideration does not consent to receive it, or if there is any dispute as to the title to receive the amount of consideration, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein:

Provided that nothing herein contained shall affect the liability of any person who may receive the whole or any part of the amount of consideration for any immovable property vested in the Central Government under this Chapter to pay the same to the person lawfully entitled thereto.

(4) Where any amount of consideration has been deposited with the appropriate authority under this section, the appropriate authority may, either of its own motion or on an application made by or on behalf of any person interested or claiming to be interested in such amount, order the same to be invested in such Government or other securities as it may think proper, and may direct the interest or other proceeds of any such investment to be accumulated and paid in such manner as will, in its opinion, give the parties interested therein the same benefits therefrom as they might have had from the immovable property in respect whereof such amount has been deposited or as near thereto as may be.

Related provisions and practical effect

Section 269UA defined relevant expressions including apparent consideration. Section 269UD dealt with the order for Central Government purchase. Section 269UE governed vesting. Section 269UF determined the consideration payable. Section 269UH dealt with re-vesting where payment or deposit was not made as required.

For a historical case, the vesting date, deadline for tender or deposit, details of any set-off, and records of competing claims should be examined together. The non-application rule in Section 269UP must be checked before relying on this Chapter.

Official legal sources

• Income Tax Department - Section 269UP
• Income-tax Act, 1961 - official consolidated text (Finance Act 2025)
• Income Tax Department - historical Section 269UP

This article is for legal information and historical reference. The facts and applicable law of an individual dispute require separate review.