TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the order for pre-emptive purchase under section 269UD could stand without a prima facie satisfaction that the apparent consideration was significantly undervalued by 15 per cent. or more and that the understatement indicated an attempt to evade tax; (ii) Whether the impugned order was vitiated because it relied on undisclosed grounds and did not disclose the required satisfaction on the record.
Issue (i): Whether the order for pre-emptive purchase under section 269UD could stand without a prima facie satisfaction that the apparent consideration was significantly undervalued by 15 per cent. or more and that the understatement indicated an attempt to evade tax.
Analysis: The power of compulsory purchase under Chapter XX-C is aimed at curbing tax evasion arising from significant undervaluation of immovable property. Before action under section 269UD is taken, the appropriate authority must have material to reach a prima facie satisfaction that the apparent consideration is substantially below fair market value and that the understatement is linked to tax evasion. The order must itself disclose that satisfaction and cannot rest on conjecture or assumptions. On the facts, the alleged superior locality and the 20 per cent. enhancement were found to be unsupported by reliable material, especially when the properties were adjacent, purchased on the same day by the same purchaser, and one comparable transaction had not attracted any finding of understatement.
Conclusion: The condition precedent for invoking section 269UD was not established, and the order was unsustainable on merits.
Issue (ii): Whether the impugned order was vitiated because it relied on undisclosed grounds and did not disclose the required satisfaction on the record.
Analysis: The show-cause notice did not clearly disclose the factual basis for treating the property as superior or for adding the alleged construction-cost difference to the apparent consideration. The authority also proceeded on grounds not put to the petitioner, depriving it of an effective opportunity to respond. A valid order under section 269UD must be a speaking order and must reflect application of mind to all relevant materials, because the order itself is the foundation for judicial review. Since the order was founded on undisclosed and irrelevant considerations, it suffered from breach of natural justice and an apparent error on the face of the record.
Conclusion: The order was invalid for violation of natural justice and for failure to record the necessary satisfaction on disclosed grounds.
Final Conclusion: The pre-emptive purchase orders could not be sustained and were quashed, with consequential relief directed.
Ratio Decidendi: Pre-emptive purchase under Chapter XX-C can be exercised only where the authority, on disclosed material, records a speaking satisfaction that the property is significantly undervalued and that such undervaluation is intended to evade tax; an order based on undisclosed or irrelevant grounds is invalid.
TaxTMI 
TaxTMI 
