Valuation evidence and distress sale findings defeated perversity challenge to acquisition under the Income-tax Act.

Appeals under Chapter XXA of the Income-tax Act were confined to questions of law, so the Tribunal's factual appreciation would not be disturbed unless perversity was shown. Where the competent authority failed to support the departmental valuation by producing the Valuation Officer, and the Tribunal relied on credible material indicating that the transfer was a distress sale, its preference for that evidence was not irrational or perverse. The acquisition scheme was treated as stringent and quasi-penal because it affected property rights, reinforcing careful scrutiny of the valuation basis. The Tribunal's order setting aside acquisition was therefore sustained.

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Issues: Whether the Tribunal committed any perversity or error of law in setting aside the order of acquisition under Chapter XXA of the Income-tax Act, 1961, on the facts found and the valuation material placed before it.

Analysis: The appeal lay under Section 269H of the Income-tax Act, 1961 only on a question of law. The acquisition power under Section 269C of the Income-tax Act, 1961 was based on a finding that the apparent consideration was below fair market value with the object of evading tax, and the resulting order under Section 269F(6) of the Income-tax Act, 1961 was appealable under Section 269G of the Income-tax Act, 1961. The Tribunal had found that the transfer was a distress sale and relied on the valuation made by the Sub-Registrar, while the competent authority did not produce the Valuation Officer contemplated by Section 269L(3) of the Income-tax Act, 1961 to support the departmental valuation. In these circumstances, the Tribunal's preference for the material before it could not be characterised as irrational or perverse, particularly when the acquisition scheme was a stringent and quasi-penal one affecting property rights.

Conclusion: No question of law or perversity was made out, and the Tribunal's order setting aside the acquisition was sustained.

Ratio Decidendi: In an appeal on a question of law against an acquisition order under Chapter XXA of the Income-tax Act, 1961, the Tribunal's factual appreciation will not be treated as perverse where the competent authority fails to substantiate the departmental valuation by producing the Valuation Officer and the Tribunal relies on other credible material showing the transaction to be a distress sale.

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