Pre-emptive purchase powers under Chapter XX-C are limited to apparent consideration, not title disputes or expired limitation periods.

Under Chapter XX-C of the Income-tax Act, the appropriate authority's role was confined to deciding whether the Central Government should pre-emptively purchase the property on the basis of apparent consideration; it could not examine the transferors' title, ownership, inheritance, or authority to execute the transfer. An order travelling into title issues was therefore beyond jurisdiction and liable to be set aside. The statutory period for making a purchase order under section 269UD was mandatory, and once it expired the authority lost power to act further. No fresh opportunity for pre-emption could be directed after limitation had run out, and the no objection certificate had to be issued.

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Issues: (i) Whether the appropriate authority acting under Chapter XX-C of the Income-tax Act, 1961 could examine the transferors' title and validity of their right to transfer the immovable property while dealing with Form No. 37-I under section 269UD. (ii) Whether, after expiry of the statutory period prescribed in section 269UD, the authority could be directed to reconsider the matter of pre-emption and purchase of the property.

Issue (i): Whether the appropriate authority acting under Chapter XX-C of the Income-tax Act, 1961 could examine the transferors' title and validity of their right to transfer the immovable property while dealing with Form No. 37-I under section 269UD.

Analysis: The scheme of Chapter XX-C was held to be limited to the consideration of whether the property should be purchased by the Central Government at the apparent consideration in order to counter tax evasion. The power under section 269UD was confined to the statutory pre-emption decision and did not extend to adjudicating questions of title, ownership, inheritance, or the validity of the transferors' authority to execute the agreement. Findings going beyond the adequacy of consideration and entering into title were therefore outside jurisdiction.

Conclusion: The impugned order was vitiated by jurisdictional error insofar as it examined title and right to transfer, and was liable to be set aside.

Issue (ii): Whether, after expiry of the statutory period prescribed in section 269UD, the authority could be directed to reconsider the matter of pre-emption and purchase of the property.

Analysis: The first and second provisos to section 269UD were treated as mandatory. The Court held that the statutory time limit for passing an order of purchase could not be extended by judicial direction, and once that period expired the authority lost the power to pass a purchase order. The fourth proviso was held inapplicable because no purchase order had been passed and no stay order had been granted. Accordingly, the authority could not be given a fresh opportunity to exercise the purchase power after limitation had run out.

Conclusion: No fresh opportunity for pre-emption could be granted after expiry of the statutory period, and the respondents were required to issue the no objection certificate.

Final Conclusion: The writ petition succeeded, the impugned order was quashed, and the transfer was to proceed on the basis of the no objection certificate under section 269UL.

Ratio Decidendi: Under Chapter XX-C of the Income-tax Act, 1961, the appropriate authority's function is confined to the statutory purchase decision on apparent consideration within the prescribed limitation period, and it cannot adjudicate title or extend the time for pre-emption once the statutory period has expired.

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