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TMI Blog2019 (7) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... r and Mr.Christopher Abraham, the learned Standing Counsel the Income Tax Department for respondents. 2. The petitioner challenges Ext.P8 assessment order and Ext.P9 demand notice as illegal, beyond the jurisdiction of respondent no.1 and quash Exts.P8 and P9. On 22.01.2019 the learned Standing Counsel sought time to get instructions and the Court granted interim suspension of Exts.P8 and P9 for eight weeks. The interim orders are extended from time to time. The respondents have not filed counter affidavit or statement opposing the writ prayers. 3. The point for consideration in the instant writ petition substantially arises under Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Reset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es a poor agriculturist, for whom even paying a few rupees of copying fees, which cannot possibly exceed Rs. 100/- considering the number of pages, shall be a huge economic burden. From the above discussion, it can clearly be seen that compensation on a depreciable asset cannot be said to be covered by Section 96 of the RFCTLAAR Act." 6. Mr. Abraham Markos appearing for petitioner contends that the first respondent failed to appreciate the purpose, purport and object of exemption under Section 96 of Act 30 of 2013. According to him, the exemption is complete if Section 46 of Act 30 of 2013 is not attracted to an acquisition under Act 30 of 2013. There is no need to search for intention or subject Section 96 to any other mode of interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the implication of Section 96 of the 2013 Land Acquisition Act upon Section 194 LA of the Income Tax Act, 1961. This can be appreciated from the operative portion of Circular No.36/2016, which reads as follows:- 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 exemption from income-tax under the RFCTLARR Act, the exemption provided under Section 96 of the RFCTLARR Act is wider in scope than the taxexemption provided under the existing provisions of Income-tax Act, 1961. This has created uncertainty in the matter of taxability of compensation received on compulsory acquisition of land, especially those relating to acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y virtue of some special provisions contained in an enactment other than the Income Tax Act, 1961, it is not known how any provision contained in Chapter-XVII of the Income Tax Act could be invoked. The emphasis under Section 190(1) is on the tax on such income. What follows from Sections 192 onwards are actually deduction or collection at source or advance payment of tax on income. Once this is clear, we will have no difficulty in concluding that Section 96 of the 2013 Land Acquisition Act makes Section 194LA of the Income Tax Act, 1961, inapplicable to the compensation paid under the award. 33. Section 96 mandates that no income-tax shall be levied on any award made under the Act except under Section 46. Section 46 deals with the purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llar to post to get a refund of the amount from the Income Tax Department. An interpretation that will lead the farmers and land losers to go from the Collectorate to the Income Tax Officer, is antithetic to the objects and reasons of the 2013 Act. Hence, the second contention of the learned standing counsel for the Department is liable to be rejected. Accordingly, it is rejected. 40. Therefore, in fine, the writ petitions are allowed and there shall be a direction to the respondents not to deduct tax at source, whenever any compensation is paid for the acquisition of a land under the 2013 Land Acquisition Act, except those covered by Section 46 of the 2013 Act. In cases where by way of an interim order the tax deducted at source was dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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