Amendments made by Income-tax (Amendment) Act, 1973 in sections 269D and 269P - Implications explained - Income Tax - 128/1974

Circular No 128 Dated 2/2/1974 SECTIONS 269D AND 269P- PRELIMINARY NOTICE/STATEMENT OF TRANSFERS Amendments made by Income-tax (Amendment) Act, 1973 in sections 269D and 269P - Implications explained 1. The Income-tax (Amendment) Bill, 1973, as passed by Parliament, received the assent of the President on December 25, 1973 and has been enacted as the Income-tax (Amendment) Act, 1973. This circular explains the provisions of the aforesaid Act (hereinafter referred to as "the Amending Act"). 2. The object of the Amending Act is to remove certain practical difficulties experienced in the administration of the provisions contained in Chapter XX-A of the Income-tax Act relating to acquisition of immovable properties in certain cases of transfer to counteract evasion of tax. For this purpose, the Amending Act has amended sections 269D and 269P of the Income-tax Act and has also made independent provisions to validate action in certain past cases. 3. Under section 269D, as it stood prior to its amendment proceedings for the acquisition of immovable property could be initiated by the competent authority by publication of a notice to that effect in the Official Gazette before the expiration of a period of six months from the end of the month in which the instrument of transfer in respect of the property is registered under the Registration Act, 1908. The time limit within which proceedings for acquisition of immovable property can be initiated by the competent authority has now been raised from six months to nine months from the end of the month in which the instrument of transfer in respect of the property is registered. This amendment has been made with retrospective effect from November 15, 1972 (i.e., from the date of coming into force of the provisions of Chapter XX-A with a view to protecting past cases where notices for the initiation of proceedings for the acquisition of immovable property were not published in the Official Gazette in time. To place the matter beyond doubt, a specific provision has also been made for validating past action in cases where such notices were published in the Official Gazette after the expiry of six months, but before the expiry of nine months from the end of the month in which the instrument of transfer was registered. In cases where the notice issued by the competent authority before the commencement of the Amending Act could not be published in the Official Gazette within the period of nine months from the end of the month in which the instrument of transfer was registered by reason of any injunction or order of any court, the notice may be published after the injunction is vacated. In such cases, the extended period of limitation will be reckoned after excluding the time of the continuance of the injunction or order, the day on which it was issued or made and the day on which it was withdrawn [vide clause (b) of the second proviso to section 269D(1)]. 4. It is not unlikely that in some cases which have now been validated by the Amending Act, the concerned persons might not have exercised their right of calling in question the jurisdiction of the competent authority under section 269B(3) or of raising objections against the proposed acquisition under section 269E. The Amending Act has, therefore, provided that in such cases the concerned persons may call in question the jurisdiction of the competent authority under section 269B(3) within 30 days from the date of publication of the notice in the Official Gazette or within 30 days from the commencement of the Amending Act (i.e., before January 25, 1974) whichever is later. Likewise, objections against the acquisition of immovable property may be made under section 269E within the period allowed under that section or a period of 45 days from the commencement of the Amending Act (i.e., before February 9, 1974), whichever period expires later. 5. Section 269P as it stood prior to its amendment by the Amending Act, provided that no registering officer shall register any document purporting to transfer any immovable property unless a statement in duplicate in respect of such transfer is furnished to him along with the instrument of transfer. The statement was required to be furnished in respect of every immovable property regardless of its value. The collection and submission of such statements to the competent authorities had thrown considerable burden on registering officers. With a view to keeping the administrative work within manageable limits, the Amending Act has amended section 269P to provide that no statement need be furnished in cases where the consideration declared in the instrument of transfer does not exceed Rs. 10,000. This amendment has been made with effect from January 1, 1974 and will accordingly apply in respect of registrations made on or after that date. Circular: No. 128 [F. No. 133(98) 73-TPL], dated 2-2-1974.