Income Tax - Acquisition of Immovable Property - Government appoints Competent Authority
As per Section 269C of the Income Tax Act, the Government can acquire property transferred at a price less than the fair market value.
The Section reads as:-
269C. (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).
Who is the competent authority?
As per Section 269A (b), "competent authority" means Joint Commissioner authorised by the Central Government under section 269B to perform the functions of a competent authority under this Chapter.
Section 269B, stipulates that The Central Government may, by general or special order published in the Official Gazette,-
(a) authorise as many Joint Commissioners, as it thinks fit, to perform the functions of a competent authority under this Chapter; and
(b) define the local limits within which the competent authorities shall perform their functions under this Chapter.
So now the Government has in supersession of all the earlier notifications on the subject, notified 15 Joint/Additional Commissioners to be the Competent Authorities and their jurisdiction.
A JC/ADC in the State Capital is made the CA for the whole state in case of large states and some JC/ADC will now have jurisdiction spreading over a few states.
CBDT Notification No. 110/2008, Dated: December 23, 2008