Section 269F Income Tax Act: Order for Acquisition of Property - Complete Guide FY 2026-27

Section 269F of the Income Tax Act is the central provision in Chapter XXA - Acquisition of Immovable Properties in Certain Cases of Transfer that empowers the Competent Authority to pass orders for acquisition of properties where transfers are made with undervalued consideration to evade taxes. This draconian provision allows the Income Tax Department to actually acquire (take ownership) of property where it is found that the transaction involves significant undervaluation aimed at tax evasion. Understanding Section 269F is crucial for property buyers and sellers as it provides the procedural safeguards, conditions for acquisition, right to be heard, and the complete mechanism through which property can be acquired by the government. This comprehensive guide covers all aspects of Section 269F for FY 2026-27, including the hearing process, mandatory conditions, Commissioner's approval, objection rights, order for acquisition or non-acquisition, appeals, compensation, and important judicial precedents.

What is Section 269F?

Section 269F, titled "Hearing of objections", is contained in Chapter XXA of the Income Tax Act, 1961. This chapter was introduced to deal with property transactions where parties deliberately undervalue property to facilitate tax evasion.

Legislative Intent: Chapter XXA (Sections 269A to 269N) was introduced to prevent and penalize gross undervaluation in property transactions that enable tax evasion. Section 269F is the culmination provision that, after following due process, allows the government to acquire such properties at undervalued prices, thereby removing the benefit of tax evasion and acting as a strong deterrent.

Chapter XXA - Complete Framework

To understand Section 269F, it's essential to know the complete Chapter XXA framework:

Section	Title	Purpose
269A	Definitions	Defines key terms - immovable property, apparent consideration, fair market value
269B	Competent Authority	Specifies who can initiate acquisition proceedings
269C	Circumstances in which acquisition may be made	Grounds for initiating acquisition proceedings
269D	Notice and inquiry	Initial notice and preliminary inquiry procedure
269E	Objections to proposed acquisition	Right of parties to file objections against acquisition
269F	Hearing of objections	Final order for acquisition or non-acquisition
269G	Appeal to Appellate Tribunal	Right to appeal against acquisition order
269H	Reference to High Court	Further appeal on questions of law
269I	Taking possession	Physical possession after final order
269J	Payment of amount to persons interested	Compensation payment to parties
269K to 269N	Miscellaneous provisions	Penalties, valuation, validation, etc.

Understanding Section 269F - Text of Law

Section 269F - Hearing of objections and Order for Acquisition

The Competent Authority shall:
✓ Fix hearing date and place for objections
✓ Hear all parties (transferor, transferee, objectors)
✓ Decide whether to acquire property or not
✓ Obtain Commissioner's approval if acquiring
✓ Pass written order with reasons

Section 269F(1) - Notice of Hearing

Text: "The competent authority shall fix a day and place for the hearing of the objections made under section 269E against the acquisition under this Chapter of any immovable property, and shall give notice of the same to every person who has made such objection:"

Proviso: "Provided that such notice shall also be given to the transferee of such property even if he has not made any such objection."

Key Requirements:

Competent Authority must fix specific date and place for hearing
Notice of hearing must be sent to all persons who filed objections under Section 269E
Mandatory notice to transferee: Even if transferee hasn't filed objection, notice must be given (as transferee has direct interest)
Reasonable notice period must be given (adequate time to prepare)

Section 269F(2) - Right to be Heard

Text: "Every person to whom a notice is given under sub-section (1) shall have the right to be heard at the hearing of the objections."

Natural Justice Principle:

Every person noticed has right to be heard (audi alteram partem)
Can appear personally or through authorized representative
Can present arguments and evidence
Can cross-examine or challenge evidence
Denial of this right makes acquisition order invalid

Section 269F(3) - Power to Adjourn

Text: "The competent authority shall have the power to adjourn the hearing of the objections from time to time."

Provides flexibility to competent authority to adjourn hearings for various reasons - need for more evidence, parties' request, administrative reasons, etc.

Section 269F(4) - Further Inquiry

Text: "The competent authority may, before disposing of the objections, make such further inquiry as he thinks fit."

Examples of Further Inquiry:

Call for additional documents or evidence
Verify facts stated by parties
Inspect property physically
Call market comparables or sale instances
Refer to valuation officer for fair market value determination
Call third parties for information

Section 269F(5) - Written Decision with Reasons

Text: "The decision of the competent authority in respect of the objections heard shall be in writing and shall state the reasons for the decision with respect to each objection."

Speaking Order Requirement:

Decision must be in writing (not oral)
Must state reasons for the decision
Must address each objection raised by parties
Cannot be a general or cryptic order
Reasoned order enables judicial review
Failure to give reasons makes order invalid

Section 269F(6) - Conditions for Order of Acquisition

This is the most critical sub-section that lays down the mandatory conditions that must be satisfied before property can be acquired.

Three Mandatory Conditions for Acquisition

Section 269F(6): "If after hearing the objections, if any, and after taking into account all the relevant material on record, the competent authority is satisfied that,—"

Condition 1: Property Value Exceeds ₹1,00,000

Section 269F(6)(a): "the immovable property to which the proceedings relate is of a fair market value exceeding one hundred thousand rupees;"

Threshold Limit: Fair market value must exceed ₹1,00,000
If FMV ≤ ₹1,00,000, Chapter XXA cannot be invoked
This limit has remained unchanged since introduction (quite low by today's standards)
Practically, almost all urban properties exceed this threshold

Condition 2: Undervaluation More Than 15%

Section 269F(6)(b): "the fair market value of such property exceeds the apparent consideration therefor by more than fifteen per cent of such apparent consideration;"

Fair Market Value must exceed Apparent Consideration by more than 15%
Formula: (FMV - Apparent Consideration) > 15% of Apparent Consideration
OR: FMV > 115% of Apparent Consideration
15% tolerance: If FMV is within 115% of consideration, acquisition cannot be made

Condition 3: Tax Evasion Intent Established

Section 269F(6)(c): "the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with such object as is referred to in clause (a) or clause (b) of sub-section (1) of section 269C,"

Must prove either of two objects mentioned in Section 269C(1):

Section 269C(1)(a) - Seller's Tax Evasion:
- Facilitating reduction or evasion of liability of transferor to pay tax
- Tax on any income (including capital gains) arising from transfer
- By showing lower consideration, seller evades capital gains tax
Section 269C(1)(b) - Buyer's Concealment:
- Facilitating concealment of any income or moneys or other assets
- Which have not been disclosed or ought to be disclosed by transferee
- For income-tax or wealth-tax purposes
- Buyer shows lower price to explain source of investment

Key Point: Mere undervaluation NOT sufficient - must prove intent to evade tax

Illustration - When All Three Conditions Met

Facts:

Property transferred on 15th January 2026
Apparent Consideration (shown in deed): ₹50,00,000
Fair Market Value (determined by CA): ₹80,00,000
Seller is retiring government official with known income sources
Buyer has no explanation for source of payment beyond ₹50 lakhs
Evidence shows actual payment of ₹80 lakhs in cash found during investigation

Analysis:

Condition 1 - Value > ₹1 Lakh:

FMV = ₹80,00,000 (clearly exceeds ₹1,00,000)
✓ Condition 1 satisfied

Condition 2 - Undervaluation > 15%:

FMV = ₹80,00,000, Apparent Consideration = ₹50,00,000
Difference = ₹30,00,000
Percentage = (30,00,000 / 50,00,000) × 100 = 60%
60% > 15% (significantly exceeds threshold)
✓ Condition 2 satisfied

Condition 3 - Tax Evasion Intent:

Seller's side: By showing ₹50 lakhs instead of ₹80 lakhs, reduces capital gains tax on ₹30 lakhs
Buyer's side: No disclosed source for additional ₹30 lakhs - facilitates concealment of unaccounted income
Evidence of cash payment substantiates intent
✓ Condition 3 satisfied

Result: All three conditions satisfied - Property can be acquired under Section 269F(6)

Section 269F(6) - Commissioner's Approval

Even after all three conditions are satisfied, acquisition order cannot be passed unilaterally:

Mandatory Approval Requirement:

"he may, after obtaining the approval of the Commissioner, make an order for the acquisition of the property under this Chapter."

Commissioner's approval is mandatory
Competent Authority cannot pass acquisition order on his own
Must forward case to Commissioner with all materials
Commissioner to be specified by CBDT through general or special order
Provides additional safeguard against arbitrary acquisition
Commissioner must apply independent mind
Approval cannot be mechanical or rubber-stamp

Explanation in Section 269F(6): "In this sub-section, 'Commissioner', in relation to a competent authority, means such Commissioner as the Board may, by general or special order in writing, specify in this behalf."

Section 269F(7) - Order for Non-Acquisition

Text: "If the competent authority is not satisfied as provided in sub-section (6), he shall, by order in writing, declare that the property will not be acquired under this Chapter."

When Non-Acquisition Order Passed:

If any of the three conditions in Section 269F(6) NOT satisfied
If Commissioner refuses to grant approval
If objections filed are found to be valid
If evidence insufficient to prove tax evasion intent
If parties provide satisfactory explanation

Effect of Non-Acquisition Order:

Proceedings under Chapter XXA dropped
Property transfer stands as executed
Parties retain their respective rights
Regular assessment proceedings continue (capital gains tax still applicable as per normal provisions)

Section 269F(8) - Service of Order

Text: "The competent authority shall serve a copy of his order under sub-section (6) or sub-section (7), as the case may be, on the transferor, the transferee and on every person who has made objections against such acquisition under section 269E."

Service Requirements:

Mandatory service on three categories:
- Transferor (seller)
- Transferee (buyer)
- All persons who filed objections under Section 269E
Service must be of the complete order (not just operative part)
Starts limitation period for filing appeal under Section 269G
Proper service is jurisdictional - appeal period calculated from service date

Section 269F(9) - Bar on Certain Objections

This sub-section bars a specific type of defense commonly raised by parties:

Section 269F(9) - Text:

"In any proceedings under this Chapter in respect of any immovable property, no objection shall be entertained on the ground that although the apparent consideration for the property is less than the fair market value of the property on the date of the execution of the instrument of transfer or where such property is of the nature referred to in sub-clause (ii) of clause (e) of section 269A on the date of the transfer, the consideration as agreed to between the parties has been truly stated in the instrument of transfer because such consideration was agreed to having regard to the price that such property would have ordinarily fetched on such transfer in the open market on the date of the conclusion of the agreement to transfer the property, except where such agreement has been registered under the Registration Act, 1908."

Simple Explanation:

Defense commonly raised: "We entered into agreement 2 years ago when market rate was ₹50 lakhs. That's why we showed ₹50 lakhs even though today's FMV is ₹80 lakhs. The consideration was truly stated based on agreement date value."
Section 269F(9) bars this defense UNLESS: The sale agreement itself was registered under Registration Act, 1908
If agreement was registered, this defense is allowed
If agreement was only notarized or unregistered, defense not allowed
Rationale: Prevents fabrication of backdated agreements to justify undervaluation

Complete Procedure - From Initiation to Acquisition

Step-by-Step Process Under Chapter XXA

Stage 1: Initiation (Section 269D)

Information Received:
- Competent Authority receives information about undervalued property transfer
- Source: Assessment proceedings, audit, survey, third-party information
Preliminary Inquiry:
- Competent Authority examines documents (sale deed, valuation)
- Compares apparent consideration with fair market value
- Forms prima facie view on undervaluation and tax evasion
Notice under Section 269D:
- If prima facie case made out, issues notice to transferor and transferee
- Notice states intention to acquire property under Chapter XXA
- Calls upon parties to show cause why acquisition should not be made
- Notice must specify grounds, property details, and time for response

Stage 2: Objections (Section 269E)

Filing of Objections:
- Transferor, transferee, or any person interested can file objections
- Objections must be filed within prescribed time (usually 30 days)
- Can object on facts, law, valuation, lack of jurisdiction, etc.
- Must be supported by affidavit and documents

Stage 3: Hearing and Order (Section 269F)

Notice of Hearing - Section 269F(1):
- Competent Authority fixes date and place for hearing
- Notice sent to all objectors and transferee
- Reasonable time given for preparation
Hearing Process - Section 269F(2)(3)(4):
- Parties appear personally or through representatives
- Present arguments and evidence
- Cross-examination of evidence
- Adjournments granted if needed
- Further inquiry conducted if required
- May refer to valuation officer for FMV determination
Decision Process - Section 269F(5)(6)(7):
- Competent Authority considers all materials
- Checks if three mandatory conditions satisfied
- If satisfied, forwards case to Commissioner for approval
- Commissioner reviews and grants/refuses approval
- If approved, passes order for acquisition - Section 269F(6)
- If not satisfied, passes order for non-acquisition - Section 269F(7)
- Order must be in writing with reasons for each objection
Service of Order - Section 269F(8):
- Copy served on transferor, transferee, and objectors
- Starts limitation for appeal

Stage 4: Appeal (Section 269G & 269H)

Appeal to ITAT - Section 269G:
- Against acquisition order under Section 269F(6)
- By transferor, transferee, or any interested person
- Within 45 days of order or 30 days of service, whichever is later
- ITAT can confirm, modify, or set aside acquisition order
Reference to High Court - Section 269H:
- Against ITAT order on questions of law
- Same procedure as regular income tax references

Stage 5: Taking Possession (Section 269I)

When Acquisition Order Becomes Final:
- No appeal filed within limitation period, OR
- Appeal dismissed by ITAT/High Court, OR
- Appeal withdrawn
Notice to Deliver Possession - Section 269I(1):
- Competent Authority serves notice to deliver possession
- Time specified in notice
Taking Physical Possession - Section 269I(2):
- If person refuses/fails to comply, CA can take possession forcibly
- May use force as may be necessary
- Property vests in Central Government free from encumbrances

Stage 6: Payment of Compensation (Section 269J)

Compensation Amount:
- Competent Authority determines persons interested in property
- Their respective shares in property
- Compensation = Apparent Consideration (amount shown in deed)
- NOT the fair market value
Payment:
- Compensation paid to persons interested as per their shares
- Government acquires property at undervalued price
- This removes benefit of undervaluation

Practical Aspects and Real-World Application

How Rarely is Chapter XXA Invoked?

Ground Reality:

Chapter XXA provisions are rarely invoked in practice
Despite widespread undervaluation in property transactions, actual acquisition cases are very few
Reasons for rare invocation:
- Extremely lengthy and cumbersome procedure
- Multiple approvals required (Commissioner level)
- High burden of proof (must prove tax evasion intent, not just undervaluation)
- Time and resource intensive
- Appeal process further delays finalization
- Government must take physical possession and manage property
- Risk of adverse court decisions
More effective alternatives:
- Section 50C - Deemed capital gains on stamp duty value (simpler, automatic)
- Section 56(2)(x) - Tax on buyer for undervalued purchase (direct taxation)
- Section 43CA - Deemed profit for builders/dealers
- Penalty proceedings under Section 271(1)(c)

Conclusion: Chapter XXA acts more as a deterrent than actively used provision. Mere existence of these draconian powers discourages gross undervaluation.

When is Chapter XXA Actually Invoked?

Typical Scenarios Where Invoked:

Egregious Cases: Property worth ₹5 crores shown at ₹50 lakhs (90% undervaluation)
Strong Evidence: Cash recovery, statements recorded, parallel documents found
Connected with Search: When undervalued transaction discovered during search operations
Benami Transactions: Where property transferred is benami and evidence available
High-Profile Cases: Involving public figures, large amounts, or policy reasons
Precedent Setting: Department wants to send strong message in specific region/sector

Difference Between Chapter XXA Acquisition and Other Provisions

Aspect	Chapter XXA (Sec 269F)	Section 50C	Section 56(2)(x)
Nature	Physical acquisition of property by Government	Deemed capital gains taxation	Tax on difference in buyer's hands
Applicable To	Transferor and transferee (both lose property)	Seller (for capital gains)	Buyer (as income)
Threshold	Property value > ₹1 lakh	No minimum threshold	Property value > ₹50 lakh
Undervaluation Limit	> 15% undervaluation	10% safe harbor (>110%)	10% safe harbor (>110%)
Intent Requirement	Must prove tax evasion intent	No intent proof required (automatic)	No intent proof required (automatic)
Procedure	Lengthy - notice, objections, hearing, approval, appeal	Simple - during assessment	Simple - during assessment
Final Result	Government owns property, parties get apparent consideration	Seller pays higher capital gains tax	Buyer pays tax on difference
Frequency of Use	Very rare	Very common (automatic)	Very common (automatic)
Deterrent Value	Very high (loss of property)	Moderate (higher tax)	Moderate (higher tax)

Case Laws and Judicial Interpretation

1. Commissioner Approval - Not Mechanical

Principle: Commissioner's approval under Section 269F(6) cannot be mechanical or rubber-stamp. Commissioner must independently apply mind and examine materials.

Courts have held: If Commissioner merely signs approval without examining case, acquisition order can be set aside for lack of proper approval.

2. Tax Evasion Intent Must Be Proved

Principle: Mere undervaluation is not sufficient. Department must establish through evidence that parties deliberately understated consideration to evade tax.

Evidence Required:

Cash transactions discovered
Admission/confession statements
Parallel documents showing actual price
Source of buyer's income insufficient for FMV
Seller's capital gains computation shows evasion

3. Natural Justice - Mandatory Compliance

Principle: Violation of natural justice principles (right to be heard, reasoned order) invalidates acquisition order.

Requirements:

Adequate opportunity to present case
All objections must be considered
Reasons must be stated in order
Evidence must be confronted to parties

4. Valuation - Fair Market Value Determination

Principle: Fair market value must be determined scientifically, not arbitrarily. Generally, valuation officer's report given due weightage.

Factors for FMV:

Comparable sales in locality
Ready reckoner rates/stamp duty value
Property characteristics (location, size, amenities)
Market conditions on transfer date

5. 15% Tolerance is Mandatory

Principle: If FMV does not exceed apparent consideration by more than 15%, acquisition cannot be made even if tax evasion intent is proved.

Example: FMV = ₹1 crore, Apparent Consideration = ₹90 lakhs. Difference = 11.11% (less than 15%). Cannot acquire even with evidence of intent.

Compensation Payment Under Section 269J

Section 269J - Payment of amount to persons interested:

Compensation Formula:

Amount = Apparent Consideration shown in transfer instrument
NOT the Fair Market Value
This is the crux of the deterrent - parties lose property at undervalued price

Distribution:

Competent Authority determines persons interested in property
Determines their respective shares
Compensation distributed accordingly

Example:

Property FMV: ₹80,00,000
Apparent Consideration shown: ₹50,00,000
Government acquires property, pays ₹50,00,000 as compensation
Government gains: ₹30,00,000 (can sell at FMV)
Parties' loss: ₹30,00,000 + tax on ₹50 lakh consideration

Appeals Against Acquisition Order

Section 269G - Appeal to Appellate Tribunal

Aspect	Details
Who Can Appeal	Transferor, transferee, or any person interested in property
Against What Order	Order for acquisition under Section 269F(6)
Forum	Income Tax Appellate Tribunal (ITAT)
Time Limit	45 days from order date OR 30 days from service date, whichever expires later
Condonation	ITAT can condone delay if sufficient cause shown
Grounds	Questions of fact, law, or mixed questions
ITAT Powers	Can confirm, set aside, or modify acquisition order
Effect Pending Appeal	Acquisition order remains in force (can seek stay)

Section 269H - Reference to High Court

Against ITAT order, on questions of law only
Same procedure as regular income tax references under Section 260A
High Court decision final (unless appealed to Supreme Court)

📚 Related Property & Anti-Avoidance Topics

Frequently Asked Questions (FAQs)

Q1: What is Section 269F of the Income Tax Act?

Section 269F is part of Chapter XXA that empowers the Competent Authority to pass an order for acquisition of property where property has been transferred at significantly undervalued consideration to evade taxes. It provides the procedure for hearing objections and passing final order for acquisition or non-acquisition after obtaining Commissioner's approval.

Q2: What are the three mandatory conditions for property acquisition under Section 269F?

Three conditions must be satisfied: (1) Property fair market value must exceed ₹1,00,000, (2) Fair market value must exceed apparent consideration by more than 15%, (3) Must prove that consideration was not truly stated with intent to evade tax (either seller's capital gains tax evasion or buyer's income concealment).

Q3: Is Commissioner's approval mandatory for acquisition order?

Yes, Commissioner's approval is mandatory under Section 269F(6). Even if all three conditions are satisfied, the Competent Authority cannot pass acquisition order without obtaining prior approval from the Commissioner specified by CBDT. This provides an additional safeguard against arbitrary acquisition.

Q4: What compensation is paid when property is acquired under Section 269F?

Compensation paid is equal to the apparent consideration (amount shown in transfer deed), NOT the fair market value. This is the deterrent effect - parties lose property at undervalued price. As per Section 269J, this compensation is distributed among persons interested in the property based on their shares.

Q5: Can I appeal against acquisition order passed under Section 269F?

Yes, under Section 269G, transferor, transferee, or any interested person can appeal to ITAT within 45 days of order or 30 days from service, whichever expires later. ITAT can confirm, modify, or set aside the acquisition order. Further appeal to High Court on questions of law is available under Section 269H.

Q6: What is the difference between Section 269F acquisition and Section 50C?

Section 269F involves physical acquisition of property by government after lengthy procedure requiring proof of tax evasion intent, >15% undervaluation, and Commissioner approval. Section 50C is automatic deemed capital gains taxation based on stamp duty value without needing intent proof, with 10% tolerance, applied during regular assessment. Section 269F is rarely used; Section 50C is routine.

Q7: Does mere undervaluation lead to property acquisition?

No, mere undervaluation is NOT sufficient. Section 269F(6)(c) requires proof that consideration was not truly stated with intent to evade tax - either facilitating seller's capital gains tax evasion or concealment of buyer's undisclosed income/assets. Intent must be established through evidence like cash transactions, confessions, or lack of disclosed sources.

Q8: How often is Chapter XXA actually invoked in practice?

Chapter XXA is very rarely invoked in practice despite widespread undervaluation. Reasons include lengthy procedure, high burden of proof, multiple approvals needed, and availability of simpler alternatives (Sections 50C, 56(2)(x), 43CA). It acts more as a deterrent than actively used provision, typically invoked only in egregious cases with strong evidence.

Q9: What happens if I file objections against proposed acquisition?

Under Section 269E, you can file objections against proposed acquisition. Section 269F mandates that Competent Authority must fix hearing date, give you notice, hear your objections, conduct further inquiry if needed, and pass written order addressing each objection. You have right to be heard as per natural justice principles.

Q10: Can property be acquired if sale agreement was registered showing lower value?

Section 269F(9) bars the defense that consideration was truly stated based on agreement date value UNLESS the sale agreement itself was registered under Registration Act, 1908. If agreement was only notarized or unregistered, this defense cannot be raised. This prevents fabrication of backdated agreements to justify undervaluation.

Key Takeaways for FY 2026-27

Section 269F empowers government to acquire undervalued property used for tax evasion
Part of Chapter XXA dealing with property transactions facilitating tax evasion
Three mandatory conditions: (1) Value > ₹1 lakh, (2) Undervaluation > 15%, (3) Intent to evade tax
Commissioner's approval mandatory before passing acquisition order
Detailed procedure: Notice → Objections → Hearing → Order → Appeal
Right to be heard: Natural justice principles must be followed
Written reasoned order mandatory addressing each objection
Compensation = Apparent consideration only (not FMV) - major deterrent
Appeal to ITAT within 45/30 days, further to High Court on law questions
Rarely invoked in practice - acts as deterrent rather than routine provision
Alternatives like Section 50C, 56(2)(x), 43CA more commonly used
Must prove tax evasion intent with evidence (not just undervaluation)
15% tolerance mandatory - if undervaluation ≤15%, cannot acquire
Registered sale agreement provides defense against backdating objections
Entire process extremely lengthy - takes years to finalize

Conclusion

Section 269F of the Income Tax Act represents one of the most draconian powers vested in tax authorities - the power to actually acquire private property that has been used to facilitate tax evasion. However, this extreme power comes with extensive procedural safeguards including mandatory hearing, right to file objections, Commissioner's approval requirement, written reasoned orders, and appeals to ITAT and High Court.

The provision is part of the broader Chapter XXA framework designed to combat undervaluation in property transactions that enable both sellers to evade capital gains tax and buyers to explain unaccounted money. While theoretically powerful, Chapter XXA is rarely invoked in practice due to its cumbersome procedure, high burden of proof requirements, and the availability of simpler alternatives like Section 50C which automatically applies stamp duty values for capital gains computation.

The three mandatory conditions under Section 269F(6) - property value exceeding ₹1 lakh, undervaluation exceeding 15%, and proof of tax evasion intent - ensure that the provision is not applied arbitrarily. Particularly important is the requirement to establish intent, which distinguishes this from the automatic application of Section 50C. Mere undervaluation is not sufficient; the department must prove through evidence that parties deliberately understated consideration to evade tax.

For property buyers and sellers in FY 2026-27, while the risk of actual acquisition under Section 269F is minimal for ordinary transactions, the provision serves as a strong deterrent against gross undervaluation. More practically relevant are Sections 50C and 56(2)(x) which automatically apply during regular assessments without requiring lengthy acquisition proceedings.

The provision demonstrates the legislative intent to ensure that property transactions are conducted at genuine market values and properly reported for tax purposes. However, the practical preference for simpler automated provisions over the complex Chapter XXA mechanism suggests that deterrence through mere existence of powers can be as effective as active enforcement.

If you find yourself facing proceedings under Chapter XXA, it is crucial to engage experienced tax professionals immediately, file detailed objections under Section 269E, utilize your right to be heard effectively under Section 269F, and prepare for potential appeals to ITAT if an adverse acquisition order is passed.

Facing Property Acquisition Proceedings or Need Property Tax Advice? Explore our guides on Section 50C, Capital Gains Tax, Property Sale Tax Guide, and Appeals Process for comprehensive solutions.