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TMI Blog2017 (9) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... nt prays your honour to grant relief Rs. 7,04,742/- from TDS short deduction demand pertaining to non-filers of Income Tax Returns. 3. Appellant further prays your honour to grant consequential relief in interest u/s 201(1A) on account of granting relief in TDS short deduction demand." 2. For the AYs 2008-2009 and 2009-2010 the following common ground was urged. " 1. The Hon'ble Commissioner of Income Tax Appeals ought not have rejected appellant's claim for relief from TDS short deduction in respect of non-filers of income tax returns, as there is no revenue loss envisaged in case of non-files also, as the non-filers are mainly agriculturists / agricultural labour and not aware of income tax proceedings, hence not filed their IT returns. The large sample of Income Tax Assessment orders of other claimants established that there is no revenue loss." 3. Facts necessary for the disposal of the appeal are stated in brief. The appellant is a Special Deputy Collector, Land Acquisition, who is vested with the powers to acquire land for Somasila Project and in turn pays compensation to the beneficiaries. The assessee is under obligation to deduct tax at source upon payments made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing instances. 1. While making the compensation to the awardees, the provisions of TDS has not be followed properly. As per the provision of TDS if the compensation was paid below Rs. One lakh it is exempted from the deduction of TDS. If the total compensation paid to the awardees exceeds above one lakh, the TDS at the rate of 10% (Excluding surcharge, Education Cess etc...) has to be deducted on the entire compensation paid. The question of exemption of Rs. One lakh does not arise. On verification of the office records it is noticed that the TDS was worked out on the compensation after exempting Rs. One lakh which is not correct. On questioning the same the assessee deductor explained that his predecessors followed such a method due to wrong interpretation of TDS provisions and accepted the mistake. As per the provisions laid down in the Income Tax Act section 194LA speaks "At the time of payment of compensation for acquiring the land and building other than agricultural land at the rate of 10% is to be deducted as TDS where the aggregate payment exceeds Rs. One lakh during the financial year. As such the correct TDS is worked out on the compensation paid to the awardees and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were living in submerged villages, having agricultural income as their only source, which is exempted income under the Income Tax Act. We understand from our enquiries that several beneficiaries, who have collected Form 16A from our office, have applied for refunds and got refund of TDS also. In a nutshell, we submit that the TDS already effected (even though short deduction in some cases) is refunded by the Income Tax Department in virtually all cases as the beneficiaries are mainly agriculturists and they do not have any source of income other than agricultural income. We pray to your honour to appreciate the fact that the short deduction of TDS if any, has not resulted in any revenue loss to the Income Tax Department. While we regret for the inadvertent error committed by the then in charge officer, we pray your honour to appreciate the facts and circumstances of the case, the fact of TDS being refunded to virtually all compensation recipients as they are all agriculturists. ............. .............. .............. The learned AO has erred in adopting the Asst. Year of tax deduction obligation resulting in overstatement of short deduction of TDS in the initial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 31.03.2007 3648924 457174 -- -- 31.03.2007 544021 2527491 -- -- 12.12.2006 24957694 18874917 1212100 18019 13.02.2008 269844 81114 -- TOTAL 52308615 10509149 2976080 For A.Y. 2008-2009: Date of compensation of payment Amount of compensation paid for lands / struc./Decreetal Charges as per impugned orders Relief of compensation to be allowed to the appellant 194LA 194A Less than Rs. 1 lakh to each claimant Agricultural land Interest spread over 31.072007 43640706 3010487 16529315 63065 02.07.2007 6149131 2554877 -- 128391 02.07.2007 5778587 1665068 -- -- TOTAL 7230432 16529315 191456 For A.Y. 2009-2010: Date of compensation of payment Amount of compensation paid for lands / struc./Decreetal Charges as per impugned orders Relief of compensation to be allowed to the appellant 194LA 194A Less than Rs. 1 lakh to each claimant Agricultural land Interest spread over 07.08.2008 4246905 -- 3057010 -- 28.01.2009 22707596 9141759 -- 1817410 13.10.2008 7333356 1886103 -- 692561 13.10.2008 6623817 2351831 -- 129001 TOTAL 13379693 3057010 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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