Section 269L of ITA, 1961 : Section 269L: Assistance By Valuation Officers

Explanation using Example

Imagine a situation where a real estate company purchases a large piece of land in a city at a price significantly lower than the market value. The Income Tax Department suspects that this transaction may be a means to evade taxes or has been undervalued for some other illicit purpose. To investigate, the competent authority under the Income-tax Act, 1961, decides to initiate proceedings for the acquisition of the property under section 269C.

To determine the actual fair market value of the property, the competent authority, as per Section 269L(1)(a), requests a Valuation Officer to assess the property and report back. The Valuation Officer, using the powers granted under section 38A of the Wealth-tax Act, 1957, conducts the valuation and finds that the fair market value is indeed much higher than the transaction amount.

Based on this valuation report, the competent authority may proceed with the acquisition of the property or adjust the compensation payable. If the real estate company disagrees with this valuation and the subsequent acquisition order, they have the right to appeal under section 269G. During the appeal process, if the fair market value is contested, the Appellate Tribunal, as mentioned in Section 269L(3), will allow the Valuation Officer to present their findings, ensuring a fair hearing.