TaxTMI 
TaxTMI 
2023 (6) TMI 622
X X X X Extracts X X X X
X X X X Extracts X X X X
....04.2023 in EP No. 610/2018 passed by the learned Prl. District and Sessions Judge, Raichur, vide Annexure-J, in the interest of justice and equity. b. Issue such other writ or order or direction as this Hon'ble Court deems just and proper in circumstances of the case and allow this Writ Petition, in the interest of justice and equity." 3. The petitioner claims to be the owner of the land in Sy.No.152/*B measuring 8 acres situated at Chikkaberagi village, Sindhanur Taluk, Raichur District. The said land was proposed to be acquired by the respondent No. 2 by issuing a notification under Section 4(1) of the Land Acquisition Act on 05.12.2011. 4. Out of 8 acres of land, the possession of six acres was taken over prior t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer, Raichur, sought for information as regards whether the amount of compensation is taxable or not and what is the percentage of Tax to be Deducted at Source on the compensation amount. 8. Shockingly, the Special Land Acquisition Officer (for short hereinafter referred to as 'SLAO') furnished the information stating that in terms of Section 194LA of Income Tax Act, 1961 (for short, hereinafter referred to as 'IT Act'), 10% would be deductible on interest on the compensation, in the event of PAN card details are furnished and in case PAN Card details are not furnished 20% would have to be deducted. 9. The Income Tax Ward Officer, Raichur replied to the letter of the First Additional District Judge, Raichur by extracting Section 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Sri Shivakumar R. Tengli, learned Additional Government Advocate would submit that the exemption under Section 194LA of the Income Tax Act is only as regards agricultural land and in the event of non-agricultural land and or buildings are acquired and compensation paid, the same would attract deduction of tax at source. 14. Heard Sri Mahantesh Patil, learned counsel for the petitioner, Sri Shivakumar R. Tengli, learned Additional Government Advocate for respondents and perused the records. 15. The Short point that would arise for consideration in the present matter is whether tax is required to be deducted at source on compensation amount paid on account of acquisition of land? 16. Section 194LA of the Income Tax Act, 1961, is repr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le property other than agricultural land at the time of payment of such sum, has to deduct an amount equivalent to 10% as income tax and deposit the same with the concerned authority to the account of the assessee. 18. The second proviso clearly makes out an exemption or exception as regards payment made in respect of award or agreement which has been exempted from levying of income tax. The proviso does not make any difference between agricultural or non-agricultural land. The exemption in terms of second proviso applies in its entirety when the land has been acquired and compensation is covered under Section 96 of the Act of 2013. 19. Section 96 of the Act of 2013 reads as under: "Section 96: No income tax or stamp duty sha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Collector shall pass individual awards covering Rehabilitation and Resettlement entitlements as per the provisions of this Act. (4) No land use change shall be permitted if rehabilitation and resettlement is not complied with in full. (5) Any purchase of land by a person other than specified persons without complying with the provisions of Rehabilitation and Resettlement Scheme shall be void ab initio: Provided that the appropriate Government may provide for rehabilitation and resettlement provisions on sale or purchase of land in its State and shall also fix the limits or ceiling for the said purpose. (6) If any land has been purchased through private negotiations by a person on or after the 5th day of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... itself is exempted from income tax, the question of deducting tax at source on such exempted income would also not arise. Hence, looked at from any angle, as long as the award is made under the Act of 2013, the compensation paid would not be liable for any tax. It is not in dispute in the present matter that the an Award has been passed under the Act of 2013. This aspect has been completely missed out by the SLAO in his letter to the court, and the court, without looking into the provisions and appreciating the import thereof, has passed the impugned order, requiring this court to intercede and correct the injustice caused. 25. In that view of the matter, I pass the following: ORDER i. The Writ Petition is allowed. ii. A cer....