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TMI Blog2013 (3) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... nor a proper party in the Land Acquisition Reference Application. 3. A few facts of the matter are as under: In the present proceeding, the notification under section 4 of the Land Acquisition Act, 1894 in respect of the acquired land was issued on 24th September, 1986. Thereafter, the declaration under section 6 of the Land Acquisition Act, 1894 was issued on 17th September, 1987. After the Award dated 18th September, 1989 was made, an Application under section 18 of the Land Acquisition Act, 1894 was filed by the Respondent No. 1--original claimant. In the said Reference, the Appellant--CIDCO made an Application at Exhibit 38 on 7th April, 2004 contending that they are the beneficiaries of the acquisition and on the basis of agreement made by them with the Government of Maharashtra, compensation will be payable by the Appellant--CIDCO. They relied on sub-section 2 of section 50 of the Land Acquisition Act. 1894. In the said Application, CIDCO contended that they were necessary party to the Land Acquisition Reference under section 18 of the Land Acquisition Act, 1894. The said Application was rejected by the Reference Court by an order dated 27th October ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant- CIDCO (being not only a Planning or Development Authority for the project of Navi Mumbai but also being liable to ultimately pay the amounts awarded as and by way of compensation towards compulsory acquisition of landed property) is necessary and/or proper party in relation to the proceedings (including Appeals) initiated by the claimants by claiming compensation under the Land Acquisition Act. He submits that the learned Single Judge erred in holding that CIDCO is not a necessary and or proper party in the facts and circumstances of the case before the learned Single Judge. 7. He submits that the learned Single Judge ought to have appreciated the Government Circular dated 12th April, 2008 which was relied upon by the Appellant--CIDCO before the learned Single Judge. The said Circular records that with effect from 1st April, 2008, the CIDCO will have to pay compensation amount on account of the acquisition of the land for the New Mumbai Project and even the enhanced compensation amount granted by the court will have to be paid by the CIDCO. He submits that the learned Single Judge erred in relying upon the words on account of the Government occurring in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned judgment passed by the learned Single Judge dated 7th November, 2009 in Writ Petition No. 1211 of 2009 is liable to be set aside. 10. On the other hand, the learned Senior Counsel Mr. Korde appearing on behalf of Respondent No. 1--original claimant vehemently opposed the present Appeal. He submits that the learned Single Judge has considered Sections 113(2), 113(3A), 116 and 113A of the Maharashtra Regional And Town Planning Act, 1966 and Section 50 of the Land Acquisition Act, 1894 and after considering the various authorities of Apex Court rightly held that the Appellant CIDCO is acting as an Agent of the State of Maharashtra and, therefore, it is not a necessary nor a proper party in the Reference under section 18 of the Land Acquisition Act, 1894. He submits that once distinction between the New Town Development Authority constituted under section 113(2) of the Maharashtra Regional And Town Planning Act, 1966 and the company/corporation declared as a New Town Development Authority under section 113(3A) of the Maharashtra Regional And Town Planning Act, 1966 is appreciated the issue raised resolves itself. The crucial point of defense is that New Town Deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary or proper party in a proceeding under section 18 and/or 28A of the Land Acquisition Act, 1894. They can represent through the State Government to protect their interest. He further submits that the CIDCO before Income Tax Appellate Tribunal, Mumbai 'C' Bench, in ITA No. 2985/M/2012 (Assessment Year: 2006-07) categorically admitted that they are acting as Agent of the State Government. For that purpose the learned Senior Counsel appearing on behalf of Respondent No. 1--original claimant relied on the decision dated 8th August, 2012 (City and Industrial Development Corporation of Maharashtra Limited, Nirmal 2nd Floor, Nariman Point, Mumbai-400021 vs. ACIT 10(3), R. No. 451, 4th Floor, Aayakar Bhavan, Mumbai-400 020.) passed by the Income Tax Appellate Tribunal, Mumbai 'C' Bench in Income Tax Appeal preferred by CIDCO. Mainly he relied on paragraph Nos. 20, 21, 24, 42 and 43 which read thus: 20. The Senior Counsel submitted, taking into all these factual aspects, which are linked totally to the authorization by the State, the assessee can only be regarded as the State on its own terms. If not the State, then it has to be held to be the agent of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, for the early hearing of the appeal by the first appellate authority, that the assessee was an agent of the State Government of Maharashtra. 42. In tune with these observations, read with sections 113 113A of MR TP Act along with Articles 289(1) 289(3) and holding that the assessee corporation is not doing any trade activity on its own accord, we hold, relying on the decision of the Hon'ble Bombay High Court in the assessee's own case, in the Writ Petition, following the decision Percival case (supra), wherein it has been held, that CIDCO, the assessee herein, is an agent of the State Government of Maharashtra. We, therefore, respectfully follow the Hon'ble jurisdictional High Court of Bombay, as held in the case of Percival (supra), and hold, the assessee to be the agent of the State Government of Maharashtra, read with the entire overwhelming documents, suggesting that there is no income to the assessee as such, and whatever is, generated, it gets deposited in the Consolidated Fund of the State. We also cannot ignore the fact that the department has been assessing the assessee as a State Government undertaking for the last three year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (1) for the purpose of acquiring, developing and disposing of land in the area of a new town, the State Government shall by another notification in the Official Gazette constitute a New Town Development Authority. The New Town Development Authority shall consist of a Chairman, a Vice-Chairman, [two members representing the local authorities functioning in the Region and such numbers of other members not exceeding seven] as in the opinion of State Government have special knowledge or practical experience in matters relating to town and country planning, an officer to be called the Town Planning Officer and Chief Executive Officer. The Chairman and the Vice Chairman and all other members shall be appointed by the State Government. 113. (3A) Having regard to the complexity and magnitude of the work involved in developing any area as a site for the new town, the time required for setting up new machinery for undertaking and completing such work of development, and the comparative speed with which such work can be undertaken and completed in the public interest, if the work is done through the agency of a corporation including a company owned or controlled by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 12th February, 2008 specifically stated that the entire costs of compensation for acquisition of land for CIDCO will be borne by the State Government. Not only that the State Government by Government Resolution dated 12th August, 2010 has merely authorized the CIDCO to appear on behalf of the State Government, to protect the interest of the State in the References under section 18 and/or 28A of the Land Acquisition Act, 1894. This itself shows that the acquiring body is the State Government and it has appointed CIDCO as its Agent. Even bare reading of section 50 of the Land Acquisition Act, 1894 shows that the Authority which bears the expenses of acquisition is entitled to appear and defend in Reference Application. In the present case, admittedly, the State Government is bearing the entire expenses of acquisition of the land. CIDCO is getting only ₹ 5,00,000/- per year towards administrative expenses. Further, the Appellant--CIDCO on its own pleaded before the Income Tax Appellate Authority that it was acting as an Agent of the State Government and nothing more. On accepting that contention, it has been held that CIDCO was not liable to pay income tax on the income derive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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