Chapter XX-A acquisition requires pre-existing material at initiation; later valuation cannot cure missing statutory foundation.

Acquisition proceedings under Chapter XX-A can be initiated only when, at the time of commencement, the competent authority has pre-existing material reasonably supporting the belief required by section 269C(1) that the property was transferred for apparent consideration below fair market value with understatement linked to tax evasion or concealment. Presumptions under section 269C(2) cannot replace that foundational material. Here, initiation rested mainly on an estimate of land value, without proper regard to the premises being fully tenanted or the rental basis relevant to fair market value, and a later valuation report could not cure the defect. The proceedings were therefore without jurisdiction.

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Issues: Whether the initiation of acquisition proceedings under Chapter XX-A was without jurisdiction for want of material satisfying the statutory conditions precedent under section 269C(1) of the Income-tax Act, 1961.

Analysis: The statutory scheme required the competent authority to record reasons and to have material forming a belief that the property had been transferred for apparent consideration less than fair market value, with understatement of consideration to facilitate tax evasion or concealment of income or assets. At the stage of initiation, the authority had to rely on pre-existing material capable of supporting that belief; the presumptions in section 269C(2) were not meant to substitute for such foundational material. On the facts, the authority proceeded mainly on an estimate of land value, without giving effect to the material fact that the premises were fully tenanted and without applying the rental basis that was relevant to fair market value under section 269A(d). The later valuation report could not justify the initiation, as it was not before the authority when proceedings were commenced.

Conclusion: The conditions precedent for valid initiation were not satisfied, and the proceedings under section 269D(1) were without jurisdiction.

Ratio Decidendi: Acquisition proceedings under Chapter XX-A can be initiated only on the basis of material existing at the time of initiation which reasonably supports the statutory belief under section 269C(1); presumptions under section 269C(2) cannot replace that foundational material.

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