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TMI Blog2022 (9) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in this case are identical to the facts in the case of DCIT Vs. Shri Ram Gopal [ 2022 (7) TMI 256 - ITAT CHANDIGARH ] held that the compensation on such compulsorily acquired land was exempt from taxation. In this case, the Division Bench had duly taken note of the fact that land had been acquired from about 3000 land owners and only 636 land owners had been disbursed compensation till 31.12.2014 and the majority of land owners were given payments after 31.11.2014 i.e. after the date of coming into operation of the RFCTLARR Act. CIT(A) was not justified in confirming the action of the A.O. in not accepting the claim of the assessee for exemption of the compensation received on compulsory acquisition of land acquired by the Land Acquisition Officer from Income Tax In the present case also, although the date of award is prior to 31.12.2014, the cheque for compensation was received after first January 2015 and, therefore, the order of the Division Bench of the ITAT in the case of DCIT Vs. Ram Gopal (supra) would squarely cover the case of this assessee as well. Also see another case i.e. of Shri Satish Kumar, Sangrur and Other [ 2021 (12) TMI 161 - ITAT CHANDIGARH ] - Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Award was awarded to the land owners which clearly proved that compensation was not awarded under the Right to Fair Compensation and Transparency in the Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as RFCTLARR ). The AO held that the compensation received by the assessee was not exempt u/s 10(37) of the Act and he proceeded to make an addition of Rs. 6,09,691/- being the amount of compensation received under the head Long Term Capital Gain and another addition of Rs. 1,05,918/- under the head income from other sources on account of 50% of interest received on compensation. The assessment was completed at income of Rs. 10,03,083/-. 2.3 Aggrieved, the assessee approached the Ld. First Appellate Authority challenging the assessment order. However, the Ld. CIT(A) dismissed the assessee s appeal by holding that although the applicability of the Acquisition Act of 2013 has been given effect in respect of the enactment specified in the Fourth Schedule including the National Highways Act of 1956 w.e.f 01.01.2015, however, in terms of sub section (3) of Section 105 of the Land Acquisition Act of 2013 (as amended ), only the First Schedule, Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon'ble Apex Court in Miscellaneous Application No. 21 of 2022 in Miscellaneous Application No. 665 of 2021 in Suo Motu Writ Petition (C) No.3 of 2020. The Ld. AR submitted that in view of this order of the Hon'ble Apex Court, the limitation period stood extended till a period of 90 days from 28.02.2022 and the assessee had filed the appeal on 24.05.2022 which was well within the stipulated extended period of limitation. The Ld. AR also drew our attention to the various documents and medical prescriptions supporting the assessee s claim regarding the ailment of assessee s husband and prayed that the delay be condoned. 4.0 In response, the Ld. Sr.DR objected to the prayer for condonation of delay. 5.0 Having heard both the parties on the issue of condonation of delay and also considering the fact that no assessee would benefit by delaying the filing of appeal except at her or his own peril and also duly giving credence to the fact that the delay has been suitably explained, I deem it expedient to condone the delay and admit the appeal for the purpose of regular hearing. 6.0 At the outset, the Ld. AR submitted that the assessee s case stood covered by various o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. In this case, the Division Bench had duly taken note of the fact that land had been acquired from about 3000 land owners and only 636 land owners had been disbursed compensation till 31.12.2014 and the majority of land owners were given payments after 31.11.2014 i.e. after the date of coming into operation of the RFCTLARR Act. In the present case also, although the date of award is prior to 31.12.2014, the cheque for compensation was received after first January 2015 and, therefore, the order of the Division Bench of the ITAT in the case of DCIT Vs. Ram Gopal (supra) would squarely cover the case of this assessee as well. For the sake of completeness the relevant paragraph containing the findings of the Division Bench of the Tribunal in the case of DCIT Vs. Shri Ram Gopal (supra) are being reproduced hereinunder:- 5.0 We have heard the rival submissions and have also perused the material on record. In this case the facts are not in dispute. From the records, it is apparent that the impugned transaction is covered under RFCTLARR Act. Even the AO has not disputed this position that the land for which compensation has been received had been acquired by the National Highw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in it had been specifically stated that all the compensation received on account of compulsory acquisition after 01/01/2014 would be exempt from income tax as per section 96 of the RFCTLARR Act. The assessee moved the application under section 154 of the Act through his counsel on 03/01/2018 and the A.O. passed the order rejecting the application under section 154 of the Act on 14/11/2018 i.e; after 9 months 11 days. 10.1 In the present case it is not in dispute that the assessee received compensation on account of land acquired by NHAI. As per the provisions of section 96 of the RFCTLARR Act, the exemption from Income Tax and Stamp Duty would apply to an award or agreement made under the new Act which came 3 into force on 01/01/2014. In the instant case the assessee filed its return of income on 30/11/2015 as he was waiting for the clarification from the Income Tax Department wherein the subject of exemption from Income Tax on the compensation received on commercial land might get clear and the clarification from the CBDT came vide Circular No. 36/2016 dt. 25/10/2016 which read as under: Circular No. 36/2016 Government of India Ministry of Finance Department of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in the Income-tax Act, 1961. 4. The above may be brought to the notice of all concerned. 5. Hindi version of the order shall follow. Sd/- (Rohit Garg) Deputy Secretary to the Government of India (F.No. 225/88/2016-ITA.II) 10.2 From para 3 of the aforesaid Circular it would be clear that 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, 2013. Now question arises as to whether the provisions of RFCTLARR Act, 2013 are applicable to the NH Act 1956 4 or not. In this regard the Hon'ble Rajasthan High Court in the case of Gopal Ram Vs. Union of India Ors. (supra) referred by the Ld. CIT(A), observed as under: However, the Central Government vide Ordinance (N0.9 of 2014) dated 31.12.2014 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 10.3 As regards to the applicability of the Circular issued by CBDT on the Income Tax Authorities, the Hon'ble Jurisdiction High Court in the case of B.S Bajaj And Sons Vs. CIT [1996] 222 ITR 418 held as under: The circulars issued by the Central Board of Direct Taxes are binding on the officers of the Department of Income-tax. Benevolent circulars providing administrative relief to the assessee, even if they are issued subsequent to the decision by an authority under the Act, have to be taken notice of, and given effect to, if found applicable in the given facts. A circular, even if produced in the High Court for the first time during the course of hearing, has to be taken note of and the assessee will be entitled to the benefit of the circular, if found entitled, irrespective of the fact that it was not produced before the authorities below or was issued by the Central Board of Direct Taxes subsequent to the decision given by the Tribunal, Circular No. 329. Dated February 22, 1982, issued by the Board does not override the provisions of the Act. It is clarificatory in nature. It is a benevolent circular issued in favour of the assessee providing administrative r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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