Land acquisition compensation exemption upheld for stock-in-trade land, with section 96 relief applied beyond individual taxpayers.

A 60-day delay in filing the Tribunal appeal was condoned because the assessee showed bona fide and reasonable cause through affidavit evidence of non-receipt of timely intimation after the authorised representative had left the matter. On merits, compensation received on compulsory acquisition of land held as stock in trade was held exempt from income tax under section 96 of the 2013 land acquisition statute. The Tribunal accepted that the exemption applies to awards or agreements under that enactment, subject to the section 46 carve-out, and is not confined to individuals or HUFs. The tax disallowance was therefore reversed in favour of the assessee.

---

---

Issues: (i) Whether the 60-day delay in filing the appeal before the Tribunal deserved condonation on the basis of reasonable cause; (ii) Whether compensation received on compulsory acquisition of land held as stock in trade by a partnership firm was exempt from income tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Issue (i): Whether the 60-day delay in filing the appeal before the Tribunal deserved condonation on the basis of reasonable cause.

Analysis: The delay was explained through an affidavit showing that the appellate order had been received on an email account earlier used by the authorised representative, that the representative had left the assignment, and that the assessee was not promptly informed. The explanation was treated as sufficient to show a bona fide and reasonable cause for the delayed filing.

Conclusion: The delay was condoned in favour of the assessee.

Issue (ii): Whether compensation received on compulsory acquisition of land held as stock in trade by a partnership firm was exempt from income tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Analysis: The Tribunal accepted that section 96 grants exemption from income tax on awards or agreements made under the land acquisition statute, except those falling under section 46, and that the benefit is not restricted by the assessee's status where the compensation is received under that enactment. It relied on the CBDT circular clarifying that such compensation is not taxable even where the Income-tax Act contains no specific exemption for it, and followed coordinate bench and High Court decisions extending the benefit to non-individual assessees. The attempt to deny the exemption on the ground that the land was stock in trade and that the assessee was not an individual or HUF was not accepted.

Conclusion: The compensation was held exempt from income tax and the disallowance was reversed in favour of the assessee.

Final Conclusion: The appeal succeeded on the substantive exemption issue, with the assessee obtaining relief on the taxability of the acquisition compensation after condonation of delay.

Ratio Decidendi: Compensation received under section 96 of the 2013 land acquisition statute is not chargeable to income tax, and the exemption is not confined to individuals or HUFs where the award or agreement falls within the scope of that provision.

---