Income Tax Officer TDS, RAIPUR V. Municipal Corporation, RAIPUR

ITA 58/BIL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94023 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 06-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YACUB TOPPO
• Assessee Lawyers: VEEKAAS SHARMA
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH , RAIPUR BEFORE S/SHRI MUKUL K SHRAWAT, ( JM) AND SHAMIM YAHYA,(AM) I TA . NO . 58 / BLPR / 201 1 (ASSESSMENT YEAR : 200 8 - 09 ) INCOME TAX OFFICER (TDS), 1 ST FLOOR, REENA APARTMENTS, PACHPEDI NAKA, RAIPUR ( CG) VS. MUNICIPAL CORPORATION, RAIPUR (CG). APPELLANT .. RESPONDENT PAN/GIR NO. : AA A LM0883B APPELLANT BY : SHRI YACUB TOPPO RESPONDENT BY : SHRI VEEKAAS SHARMA DATE OF HEARING : 1 0 .6.2015 DATE OF PRONOUNCEMENT : 19 . 6. 201 5 O R D E R PER MUKUL K SHRAWAT, ( JM) : TH IS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LD. CIT(A) DATED 1.12. 201 0 FOR THE ASSESSMENT YEAR 200 8 - 09 . 2. T HE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS : 1. CANCELLING THE DEMAND OF RS.1,19,74,251/ - AS SHORT DEDUCTION AND INTEREST UNDER SECTION 201(1A) OF THE IT ACT , WHICH WAS RIGHTLY LEVIED BY THE AO AS PER THE PROVISION OF CHAPTER XVIIB OF THE IT ACT FOR NON - COMPLIANCE OF THE PROVISIONS OF SECTION 194LA FOR THE FINANCIAL YEAR 2007 - 08 WHERE THE DEDUCTION HAD PROMPTLY MADE SUCH DEDUCTIONS ON COMPENSATIONS IN THE SUBSEQUENT YEARS 3. THE ORDER UNDER SECTION 201(1) AND 201(1A) OF THE ACT WAS PASSED BY THE AO ON 22.2.2010 . A CCORDING TO WHICH T HE ASSESSEE WAS TREATED IN DEFAULT FOR NOT DEDUCTING TDS ON PAYMENT OF COMPENSATION ON COMPULSORY ACQUISITION OF LAN D UNDER SECTION 194LA OF THE ACT . THE AO HAS REPRODUCED THE CHART OF THE PARSONS TO WHOM THE COMPENSATION WAS ITA. NO. 58 / BLPR/201 1 2 PAID AND TDS WAS REQUIRED TO B E DEDUCTED . THEREAFTER, THE AO HAS CALCULATED THE INTEREST UNDER SECTION 201(1) AND 20(1A) OF THE ACT ; BECAUSE THE ADMITTED FACTUAL POSITION WAS THAT THE TDS WAS DEDUCTED AND PAID IN THE SUBSEQUENT YEAR. A GGREGATING THE TWO INTEREST DEFAULT WAS THUS COMPU TED AT RS.1,19,74,251/ - . B EING AGGRIEVED BY THE IMPUGNED DEMAND RAISED AGAINST THE ASSESSEE, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 4. THE MAIN ARGUMENT OF THE ASSESSEE WAS THAT THE PROVISIONS OF SECTION 194LA WERE NOT APPLICABLE ON THE PAYMENTS MADE AS COMPENSATION ON TRANSFER OF THE PROPERTY BY THE RESPECTIVE PARTIES BECAUSE IT WAS NOT COMPULSORY ACQUISITION BY THE ASSESSEE CORPORATION . THE LD. CIT(A) HAS EXAMINED THE FACTS AND HELD THAT IN A SITUATION WHEN THE TDS WAS DEDUCT ED SUBSEQUENTLY, HENCE, DEFAULT WAS VENIAL IN NATURE, HENCE THE LEVY OF INTEREST WAS UNSUSTAINABLE . BEING AGGRIEVED , NOW THE REVENUE IS FURTHER IN APPEAL BEFORE THIS TRIBUNAL . 5 . FROM THE SIDE OF THE REVENUE, THE LD.DR APPEARED AND PLEADED THAT THERE WAS AN ADMITTED DEFAULT OF NON DEDUCTION OF TDS AS PRESCRIBED UNDER THE PROVISIONS OF SECTION 194LA OF THE ACT. HE HAS PLEADED THAT THE ASSESSEE WAS AWARE ABOUT THE PROVISIONS OF SECTION 194LA OF THE ACT, THEREFORE, DEDUCTED THE TDS BUT BELATEDLY. SINCE, THE RE WAS A DELAY ON THE PART OF THE ASSESSEE TO DEPOSIT THE TAX IN THE GOVERNMENT EXCHEQUER, THEREFORE, THE AO WAS LAWFULLY CORRECT IN CHARGING INTEREST U/S 201(1) AND 201(1A) OF THE ACT. 6 . FROM THE SIDE OF THE ASSESSEE, THE LD.AR HAS PLEADED THAT IT WAS N OT A CA S E OF COMPULSORY ACQUI SITION OF THE PROPERTY BUT THE LAND WAS ACQUIRED BY THE CORPORATION BY MUTUAL CONSENT FOR WHICH THE PROPER CONSENT AGREEMENT WAS EXECUTED BY THE PARTIES. HE HAS ALSO RE FERRED THE CASE LAW WHICH ARE LISTED BELOW: ITA. NO. 58 / BLPR/201 1 3 A) NAYA RA IPUR DEVELOPMENT AUTHORITY V/S ITO (TDS) - ITA NO.637/NAG/20089AY)2008 - 09) DATED 19.7.2013; B) ITO (TDS) - RAIPUR V/S RAIPUR DEVELOPMENT AUTHORITY (2014)49 TAXMANN.COM 575 (CHHATTISGARH) ; C) CHIEF ACCOUNTS OFFICER V/S ITO(2015) 16 7 TTJ 0390 (BANG); D) INFOPARK KERALA V/S ACIT (2010) 187 TAXMANN 0001 (KERALA) 7. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THE FACTS OF THE CASE ARE VERY CLEAR THAT THE ASSESSEE - CORPORATION HAS NOT ACQUIRED THE LAND AS CO MPULSORY ACQUISITION OF LAND. THE PAPER BOOK CONTAINS THE EVIDENCE DEMONSTRATING THE PROCEDURE ADOPTED FOR ACQUIRING THE LAND FOR PUBLIC INTEREST. OUR ATTENTION HAS BEEN DRAWN THAT THE LAND OWNERS HAVE EXECUTED CONSENT AGREEMENT WITH THE ASSESSEE CORPOR ATION . ACCORDING TO WHICH THE CONSIDERATION WAS FIXED AND THEREUPON PAID BY THE CORPORATION . HENCE, THE ARGUMENT WAS THAT THE NATURE OF PAYMENT WAS NOT A COMPENSATION ON ACQUIS ITION O F LAND BUT IT WAS THE CONSIDERATION AGREED UPON BETWEEN THE PARTIES FOR T HE PURPOSE OF TRANSFER OF PROPERTY. AN ALTERNATE PLEA HAS ALSO BEEN RAISED THAT THE PERSONS TO WHOM THE AMOUNT WAS PAID BY THE ASSESSEE CORPOR AT ION HAVE FILED THEIR RESPECTIVE INCOME TAX RETURN S AND PAID TAX BY DISCLOSING THE CAPITAL GAIN ON TRANSFER OF T HEIR RESPECTIVE PROPERTY TO THE MUNICIPAL CORPORATION, RAIPUR. IN SUPPORT OF THIS ARGUMENT THAT DUE TAX WAS PAID BY THE TRANSFEREE HENCE THERE WAS NO DEFAULT ON THE PART OF THE ASSESSEE (DEDUCTOR) , T HE CASE LAW CITED WAS HINDUSTAN COCA COLA BEVERAGE (P ) LTD V/S CIT (2007) 293 ITR 226 (SC) . HOWEVER, WE ARE ON THE MAIN ISSUE AS PLEADED BEFORE US THAT THIS IS NOT A CASE OF COMPULSORY ACQUIS ITION OF LAND AND HENCE IT WAS NOT JUSTIFIED TO INVOKE THE PROVISIONS OF SECTION 194LA OF THE ACT . THIS ISSUE HAS BE EN DECIDED BY THE RAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF NAYA RAIPUR DEVELOPMENT AUTHORITY (SUPRA) DA T ED 19.7.2013 WHEREIN IT WAS HELD THAT IN A SITUATION A CORPORATION HAS NO T COMPULSORILY ACQUIRED THE LAND THEN IT IS NOT JUSTIFIED TO HOL D TH A T THE PROVISIONS OF SECTION 194LA WOULD BE APPLICABLE. IN THE SAID DECISION, THE ITA. NO. 58 / BLPR/201 1 4 TRIBUNAL HAS FINALLY HELD THAT CONSEQUENTIALLY THE SAID LOCAL AUTHORITY COULD NOT BE TREATED IN DEFAULT U/S 201(1)(201(1A) OF THE ACT. IN ADDITION TO THE ABOVE DECISION, OUR ATTENTION WAS DRAWN ON A DECISION OF THE HONBLE CHHATTISGARH HIGH COURT IN THE CASE OF ITO (TDS ) V /S RAIPUR DEVELOPMENT AUTHORITY (SUPRA) AND IN THAT DECISION IT WAS OPINED THAT THE ASSESSEE BEING THE DEVELOPMENT AUTHORITY HAD ACQUIRED THE LAND BUT PR ICE WAS NEITHER FIXED BY THE STATUTE NOR BY ANY OTHER AUTHORITY FOR ACQUISITION OF LAND. HOWEVER, IT WAS DECIDED AND AGREED UPON BY THE MUTUAL NEGOTIATION. SO WHERE THERE WAS NO COMPULSORY ACQUISITION , HENCE, THE PROVISIONS OF SECTION 194LA WOULD NOT BE APPLICABLE, AS HELD BY THE HONBLE HIGH COURT. EVEN, THE HONBLE KERALA HIGH COURT IN THE CASE OF INFOPARK KERALA (SUPRA) HAS CONSIDERED THE ISSUE AT LENGTH AND THEREUPON OPINED THAT ONLY IF THERE WERE SUCH DIVESTING OF THE TITLE OF THE LAND ONLY AND AM OUNT WERE PAID EITHER AS COMPENSATION OR AS ENHANCED COMPENSATION, COULD BE SAID THAT THERE WAS COMPULSORY ACQUISITION OF LAND. FINALLY IT WAS HELD THAT THERE WAS WRONG IN VOCATION OF JURISDICTION U/S 194LA IN RESPECT OF THE CASES WHERE SALE DEEDS WERE EXECUTED IN FAVOUR OF THE CORPORATION. ALTHOUGH WE ARE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE BY RESPECTFULLY FOLLOWING THE PRECEDENTS CITED BEFORE US IN THE LIGHT OF THE FACTS OF THE CASE, BUT WE ARE NOT APPROVING THE REASONS GIVEN BY THE LD.CIT(A ) WHILE GRANTING THE RELIEF TO THE ASSESSEE. 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 19TH JUNE , 201 5 SD SD ( SHAMIM YAHYA ) ( MUKUL K SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAIPUR : 19TH JUNE,2015. SRL , SR. PS ITA. NO. 58 / BLPR/201 1 5 COPY OF THE ORDER FORWARDED TO : 1. THE A PPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - CONCERNED 4. CIT CONCERNED 5. DR, ITAT, RAIPUR CONCERNED 6. GUARD FILE. BY ORDER, TRUE COPY SENIOR PRIVATE SECRETARY /ASSTT.REGISTRAR RAIPUR