Chapter XXA acquisition needs recorded satisfaction of tax evasion or concealment; mere understatement of consideration is insufficient.

Chapter XXA acquisition proceedings can be initiated only if the recorded reasons under section 269C show that understatement of consideration was linked to an object of facilitating tax avoidance or concealment of income or assets. Mere understatement of consideration, without that statutory satisfaction, is insufficient to confer jurisdiction. On that basis, the initiation of acquisition proceedings was held contrary to the prescribed procedure, and the acquisition order could not stand.

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Issues: Whether the Competent Authority validly assumed jurisdiction to initiate acquisition proceedings under Chapter XXA on the basis of reasons recorded under section 269C of the Income-tax Act, 1961.

Analysis: The recorded reasons were held to be insufficient because they did not show that the alleged understatement of consideration was linked to any object of facilitating avoidance of tax or concealment of income or assets. Mere understatement of consideration, without the requisite statutory satisfaction as to tax evasion or concealment, was treated as inadequate for invoking the acquisition provisions. On that basis, the initiation itself was found to be contrary to the procedure prescribed by Chapter XXA.

Conclusion: The assumption of jurisdiction was invalid and the acquisition order could not stand.

Ratio Decidendi: Proceedings for acquisition under Chapter XXA can be initiated only where the recorded reasons disclose that the understatement of consideration was with the object of facilitating tax avoidance or concealment of income or assets; mere inadequacy of consideration is not enough.

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