TaxTMI 
TaxTMI 
2021 (12) TMI 161
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....icable to the acquisition made under the NH Act, 1956. 3. On the facts and circumstances of the case the Ld. CIT(Appeals) has erred in having held that taking the logic further section 96 of the Land Acquisition Act which exempts the compensation from Income-tax, is also not applicable to the land acquisition covered by NH Act. 4. The Ld. CIT(Appeals) has erred in having not rebutted the submissions of the assesee while giving finding merely relying on judgement of the Hon'ble High Court of Rajasthan. 5. On the facts and circumstances of the case the Ld. CIT(Appeals) has erred in having confirmed the order u/s 154 passed by the Ld. A.O. in not allowing the exemption from capital gains on compulsory acquisition of assessee's land. The assessee craves leave to add to alter or amend the above grounds of appeal before the same is heard or disposed of. 4. The main grievance of the assessee relates to the exemption from the Income Tax of the compensation received on acquisition of land. 5. Facts of the case in brief are that the assessee filed the return of income on 30/11/2015 declaring an income of Rs. 1,59,97,586/- after deduction under Chapter-VIA of the Income Tax Act,....
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....cial Land 23.01.2015 1,54,53,202/- 15,45,320/- 1,39,07,882/- 5.2 The assessee appended note to the aforesaid details of the compensation received as under: Note: As per certificate from the O/o the Collector Land Acquisition-cum-S.D.M. Sangrur, the above said Agriculture and Commercial Land had been acquired by the Land Acquisition Officer for Road No. NH-64 and vide the Notification No. S.O. 42/C.A.2/1899/S.9/2/2008 Dated 09.02.2008 of the Punjab Govt., the amount equilent to this Award of compensation for purchase of Commercial land will be exempted from Stamp Duty and Registration Charges. 5.3 The A.O. observed that the assessee claimed credit for TDS amounting to Rs. 15,87,848/- corresponding to the interest income declared in the return and the compensation received. The case was processed under section 143(1) of the Act as such, thus, as on date the returned income stands to be assessed income and there was no mistake which was self evident and apparent from the record warranting rectification thereof. He also observed that what the assessee wants to do was to make a fresh claim on the basis of fresh material which was not permissible under section 154 of the Act ....
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....r getting relief. Ground No. 2: The Impugned order is illegal and time barred as the same has not been passed within prescribed time mentioned u/s 154(8) of the Income Tax Act, 1961 As per the provisions under section 154(8) of the IT. Act, 1961 :- " Where an application for amendment under this section is made on or after the 1st day of June, 2001 to an income tax authority referred to in sub-section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it- (a) Making the amendment; or (b) Refusing to allow the claim. In the present case application u/s 154 was filed as on 03/01/2018 and order of the same has been received as on 14/11/2018 i.e after the more than 6 months from the end of month in which the application is made. Six months were completed as on 31/07/2018 but order made as on 09/11/2018 and received as on 14/11/2018. As the Id. AO has not passed the order within the prescribed period mentioned in the Income Tax Act, 1961 it becomes illegal and application shall be treated as accepted so-moto. CBDT has also issued instruction no 01/2016 dtd. 15/02/2016 for following the prescri....
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....urn was 07/09/2015 but the assessee has filed his return delayed i.e as on 30/11/2015 due to waiting any clarification from Income Tax Department. But CBDT has issued circular no 36/2016, dtd 25/10/2016 after a long period of due date of Wing of return. The assessee has no other option to file return by deposit tax on capital gain and the assessee has done his duty by truly showing his income and deposit the tax along with interest accordingly. After that as soon as the appellant came to know about this circular, he has filed rectification application accordingly. Copy of the Circular is enclosed here with. Honourable High Court of Punjab and Haryana is also upheld its view in the case of B.S. Bajaj & Sons Vs CTT, IT reference no 104 of 1982 dtd. 05/08/1996-Whether a circular, which is clarificatory in nature extending benefit to assessee in consonance with provisions of act, has to be taken notice of and given effect to, even if it issued subsequent to decision by an authority under act and was not produced before concerned authority. Copy of the Judgement is enclosed here with. We have also relied on CBDT circular no 14 (XL-35) dtd. 11/04/1955, Miscellaneous-Refund and relief....
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....ity of India (NHAI), prima-facie is one the bodies covered u/s 106 of the RFCTLARR. It may also be pointed out that per schedule 1 of RFCTLAAR Act compensation includes additional compensation, solatium and any other receipt implying that solatium and interest are part of compensation. The LD AR also cited the Central Board of Direct Taxes circular No. 36/2016 dt. 25.10.2016 which extended the exemption by including compulsorily acquired land without any restriction on area as well as classification of land. 5.1 That the land acquired on which compensation has been received has been acquired by the National Highway ( NHAI) is matter of record and is undisputed. That the NHAI is one of the 13 authorities covered under the fourth schedule of the RFCTLARR Act is also crystal clear. The Ld. AO has however, not addressed the appellant's submission regarding the transaction being covered under the RFCTLAR Act and the subsequent CBDT Circular No. 36/2016 dt. 25.10.2016. It may be relevant in this connection to examine the entire conspectus of compensation received on land acquisition under the Land Acquisition Act, 1894 (hereinafter LA Act) and the changed position once the RFCTLARR....
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....rest paid on the excess amount, u/s 28 of 1894 Act, is a part of enhanced compensation. However, after this order the Hon'ble Jurisdictional Punjab and Haryana High Court in the case of Manjeet Singh (HUF) Karta, Manjeet Singh Vs Union of India 2016 237 taxmann 116 (P & H) referred to the decision of the Hon'ble Supreme Court in the case of CIT v/s Ghanshyam (Supra), and also referred to a number of other decisions of the Hon'ble Supreme Court and held that the interest received u/s 28 of the Land Acquisition Act is in the nature of interest and is taxable. 5.7 The Hon'ble Jurisdictional Punjab and Haryana High Court while adjudicating this decision referred to the following three judges bench cases 1. Three judges bench decision of the Supreme Court in the case of Dr. Shamlal Narula v. CIT, [1964] 53 ITR 151. 2. Three judges bench decision of the Apex Court in T. N. Govindaraju Chetty V CIT (1967) 66 ITR 465. 3. Three Judges Bench decision of Apex Court in Bikram Singh vs. Land Acquisition Collector, (1997) 224 ITR 551. In all the above cases the Apex Court has held that interest u/s 28 is a revenue receipt. SLP filed was dismissed by the Supreme Court ....
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....all, to arrive at the final award, impose a "Solatium"amount equivalent to one hundred per cent. Of the compensation amount. Explanation.- For the removal of doubts it is hereby declared that solatium amount shall be in addition to the compensation payable to any person whose land has been acquired. 2. The Collector shall issue individual awards detailing the particulars of compensation payable and the details of payment of the compensation as specified in the First Schedule. 3. In addition to the market value of the land provided under section 27, the Collector shall, in every case, award an amount calculated at the rate of twelve per cent, per annum on such market value for the period commencing on and from the date of the publication of the notification of the Social Impact Assessment study under sub-section (2) of section 4, in respect of such land, till the date of the award of the Collector or the date of taking possession of the land, whichever is earlier 5.12 However, on the applicability the exemption under income tax Act to compensations received from the National Highway Authority of India, there is lack of clarity and in this connection, it may be relevant to ex....
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....ct of 2013 is as follows :- "(3) The Central Government shall, by notification, within one year from the date of commencement of this Act, direct that any of the provisions of this Act relating to the determination of compensation in accordance with the First Schedule and rehabilitation and resettlement specified in the Second and Third Schedules, being beneficial to the affected families, shall apply to the cases of land acquisition under the enactments specified in the Fourth Schedule or shall apply with such exceptions or modifications that do not (11 of 15) reduce the compensation or dilute the provisions of this Act relating to compensation or rehabilitation and resettlement as may be specified in the notification, as the case may be." However, the Central Government vide Ordinance (No.9 of 2014) dated 34.12.2014 has substituted Sub-section (3) of Section 105 of the Acquisition Act of 2013, which reads as under:- "(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall a....
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....eu of the acquisition of land of the petitioners is to be determined as per the First Schedule of the Acquisition Act (13 of 15) of 2013 or not. As stated earlier, it is not in dispute that the final awards in respect of the notification issued under Section 3A of the NH Act of 1956 were issued under Section 3G of the NH Act of 1956 prior to 31.12.2014 and whole amount of compensation was deposited by the MoRTH and the PWD with the CALA before 31.12.2014. In all the writ petitions the petitioners have also admitted that they have received the compensation as determined in the final awards prior to 31.12.2014. The MoRTH has also issued comprehensive guidelines on 28.12.2017 on this point, which is reproduced hereunder :- (iii) By now, it is also a settled proposition that the First, Second and Third Schedule of the RFCTLARR Act, 2013 shall be applicable to the NH Act, 1956 with effect from 01.01.2015. As such, the following is clarified: (a) All cases of Land acquisition where the Awards had not been announced under Section 3G of the NH Act till 31.12.2014 or where such awards had been announced but compensation had not been paid in respect of majority of the land holdings u....
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....tions, however, from the said information, it cannot be gathered that compensation was not paid to the majority of the land owners on or before 31.12.2014. Moreover, it is not in dispute that the acquiring authority i.e. MoRTH and the PWD had already deposited the whole amount of compensation with the CALA before 31.12.2014 and, therefore, it cannot be said that the compensation was not paid before 31.12.2014. The disbursement of compensation to the land owners is the function of the Land Acquisition Officer and if there is any laxity on the part of the Land Acquisition Officer in disbursing the compensation amount, the acquiring authority cannot be held liable for the said inaction. 5.15 From the above decision the following emerges : That As per Sub-section (1) of Section 105 of the Acquisition Act of 2013 the provisions of this Act shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule and The National Highway Act of 1956 is covered in the fourth schedule Serial No.7.The original provision of provision of Sub-section (3) of Section 105 of the Acquisition Act of 2013 states as under: :- "(3) The Central Government shall, by notific....
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....hedule shall apply to all cases of land acquisition under the enactments specified in the Fourth Schedule to the said Act." From the above, the High Court has ruled, it emerges that the applicability of the Acquisition Act of 2013 has been given effect in respect of the enactment specified in Fourth Schedule including the NH Act of 1956 with effect from 01.01.2015. However, it is to be noticed that as per Sub-section (3) of Section 105 of the Acquisition Act of 2013 (as amended), the provision of the Acquisition Act of 2013 relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule have only been applied in the NH Act of 1956 and Section 24 of the Acquisition Act of 2013 is not made applicable to the acquisition is made under the NH Act of 1956. Taking the logic further Section 96 of the land Acquisition Act which exempts the compensation from Income Tax is also not applicable to the land acquisitions covered by the NHAI Act. I see no reason to interfere with the order of the Ld. AO on these grounds. It is ordered acco....
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....presentative of the assessee or that it was time barred. It was contended that though the Ld. CIT(A) dismissed the appeal of the assessee on merit only thus he had accepted the claim of the assessee that the application under section 154 of the Act was legally maintainable. It was also contended that after passing of the order by the Ld. CIT(A), the assessee filed an appeal before the ITAT challenging his order on merit but the Department had not filed any appeal against the order of the Ld. CIT(A) on the issue of dismissal of application under section 154 of the Act by the A.O., having not been signed by the assessee. It was stated that now since there is no appeal by the department on the issue, therefore the appeal of the assessee under section 154 of the Act, in view of the above facts is maintainable as the Ld. CIT(A) had in a detailed order after looking to the submission of the assessee, decided the case on merit. 8.2 It was further stated that the due date for filing of the return of income was 07/09/2015 but the assessee filed his return of income late on 30/11/2015 as he was waiting for the clarification from the Income Tax Department, wherein the subject of exemption fr....
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....on of certain highways and for the matters connected therewith. It was further contended that the Circular No. NH 11011/30/2015- LA by the Government of India issued by Ministry of Roads And Transport and Highways, dt. 13/01/2016, have clarified the applicability of provisions of RFCTLARR Act 2013 to NH Act 1956 wherein it has been made clear that " All cases of Land Acquisition where award has not been announced u/s 3G of the NH Act or where such awards have been announced but compensation had not been paid in respect of majority of land holdings under Acquisition as on 31/12/2014, the compensation would be payable in accordance with the First Schedule of The RFCTLARR Act 2013". 8.6 Ld. Counsel for the assessee stated that the close examination of Section 96 of RFCTLARR Act would show that the said section specifically states that the exemption from Income Tax and Stamp Duty could apply to (1) Awards Or (2) Agreements, made under the new Act and Section 23 of the new Act states about enquiry and Land Acquisition award by Collector. It was further stated that section 82 states about power to enter and take possession and compensation. It was also stated that though the acquisition....
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....o the lands forcefully compulsorily acquired for public purpose and development of highway falls under infrastructure project of public purpose. Hence, first by order of removal of difficulties and then by virtue of Section 2 of the RFCTLARR Act makes it amply clear that provisions of RFCTLARR Act, 2013 were applicable for acquisition of the land where acquisition had been made under NH Act, 1956 and the land so acquired was inevitably for public purpose and hence the person or assessee cannot be deprived of his property in gross disregard of the law of land. The reliance was placed on the following case laws: * ACIT Vs. Saurashtra Kutch Stock Exchange Limited, 305 ITR 227 (SC) * CIT Vs. Motilal Duli Chand, 80 CCH 142 (ALL) * Commissioner of Income Tax Vs. Satish Kumar Aggarwal, 66 DTR 68 (DEL) * Nulux Engineers Vs. DCIT, in ITA No. 2073/MUM/2017 order dated 05/10/2018 of Mumbai ITAT 9. In his rival submissions the Ld. DR reiterated the observations made by the authorities below and emphasized the observations made by the Ld. CIT(A) in para 5.17 of the impugned order. The reliance was placed on the judgment of the Hon'ble Rajasthan High Court in the case of Gopa Ram Vs....
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....set. Hence, capital gains arising from the transfer (including compulsory acquisition) of such agricultural land is not taxable. Finance (No. 2) Act, 2004 inserted section 10(37) in the Act from 01.04.2005 to provide specific exemption to the capital gains arising to an Individual or a HUF from compulsory acquisition of an agricultural land situated in specified urban limit, subject to fulfilment of certain conditions. Therefore, compensation received from compulsory acquisition of an agricultural land is not taxable under the Act (subject to fulfilment of certain conditions for specified urban land). 2. The RFCTLARR Act which came into effect from 1st January, 2014, in section 96, inter alia provides that income-tax shall not be levied on any award or agreement made (except those made under section 46) under the RFCTLARR Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFCTLARR Act), is exempted from the levy of income-tax. 3. As no distinction has been made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemp....
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....evelopment, Government of India issued the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015 vide Notification dated 28.08.2015. The said Order is reproduced below: - "(l) This Order maybe called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015. (2) It shall come into force with effect from the 1 st day of September, 2015. (12 of 15) (3) The provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to all cases of land acquisition under the enactments specified in the Fourth Schedule to the said Act." From the above, it is clear that the applicability of the Acquisition Act of 2013 has been given effect in respect of the enactment specified in Fourth Schedule including the NH Act of 1956 with effect from 01.01.....