Appeal details
Counselvise Citation
[2021] 107 COUNSELVISE.COM (IT) 3376 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-10-2021
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
17-09-2021
Assessment Year
2011-2012
Appeal Filed On
06-01-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER AND S MT BEENA PILLAI, JUDICIAL MEMBER ITA NO. 8 /BANG/20 20 ASSESSMENT YEAR: 20 1 1 - 12 THE DEPUTY COMMISSIONER OF INCOME - TAX (TDS), CIRCLE 2 (1), BANGALORE. VS. M/S. SPECIAL LAND AND ACQUISITION OFFICER (METRO), KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, 14/3, 2 ND FLOOR, R.P. BHAVAN, NRUPTUNGA ROAD, BANGALORE 560 001. PAN: AAATK1305J (APPELLANT) (RESPONDENT) & C.O. NO. 05/BANG/2021 (IN ITA NO. 8/BANG/2020) ASSESSMENT YEAR : 2011 - 12 M/S. SPECIAL LAND ACQUISITION OFFICER (METRO), KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, 14/3, 2 ND FLOOR, R.P. BHAVAN, NRUPTUNGA ROAD, BANGALORE 560 001. PAN: AAATK1305J VS. THE DEPUTY COMMISSIONER OF INCOME - TAX (TDS), CIRCLE 2 (1), BANGALORE. (APPELLANT) (RESPONDENT) A SSESSEE BY : SHRI ASHOK KULKARNI, ADVOCATE REVENUE BY : SHRI MUZAFFER HUSSAIN, CIT (DR) DATE OF HEARING : 17 . 09 .2021 DATE OF PRONOUNCEMENT : 14 . 10.2021 PAGE 2 OF 8 IT A NO. 8/BANG/2020 & C.O. NO. 5/BANG/2021 ORDER PER BEENA PILLAI , J UDICIAL M EMBER PRESENT CROSS APPEALS ARE FILED BY REVENUE AS WELL AS ASSESSEE AGAINST ORDER DATED 27/09/2019 PASSED BY THE LD. CIT (A) - 13, BANGALORE ON FOLLOWING GROUNDS OF APPEAL: ITA NO. 8/BANG/2020: 1. THE ORDER OF THE LD.CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS IN FACTS IN DELETING THE DEMANDS RAISED MADE U/S.201(1) A 201(1A) OF THE INCOME TAX ACT, 1961. 3. THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE SPECIAL LAND ACQUISITON OFFICER(METRO) ACTING ON BEHALF OF KARNATAKA INDUSTRIAL AND DEVELOPMENT BOARD (KIADB), IS NOT A COMPETENT AUT HORITY FOR MAKING COMPULSORY ACQUISITIONS AND IN THE INSTANT CASE IT IS THE GOVERNMENT OF KARNATAKA WHICH IS THE COMPETENT AUTHORITY, WHEREAS THE FACTS ARE THAT THE SLAO(METRO) IS APPOINTED BY KIADB WHICH IN TURN IS EMPOWERED BY STATE GOVERNMENT FOR ACQUIS ITION OF LAND, FRAMING OF WARDS AND DISBURSEMENT OF COMPENSATION AS PROVIDED UNDER THE STATUTE. 4. THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE KIADB HAS NO ROLE TO PLAY IN THE PROCEDURE OF ACQUISITION, WHEREAS THE FACTS ARE THAT THE ACQUISITION SECTION OF THE KIADB IS AN ARM OF STATE GOVERNMENT WHICH CONDUCTS PROCEEDING FOR ACQUISITION OF LAND AS PER KIAD ACT OF 1966 AND HAND OVER THEM TO KIADB . 5. THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE SPECIAL LAND ACQUISITION OFFICER(METRO) IS NOT A COMPETENT AUTH ORITY WHEREAS THE FACTS ARE THAT THE SLAO(METRO) IS FULLY AWARE AND HAS ALSO DISCHARGED HIS RESPONSIBILITY OF DEDUCTING TAX AS PER THE PROVISIONS OF SECTION 194LA FOR THE INSTANT AY 2011 - 12 AND THE POINT OF DISPUTE IS NOT NON - DEDUCTION BUT SHORT - DEDUCTION. 6. THE LD.CIT(A) HAS FAILED TO CONSIDER THAT IN THE CASE OF THE SPECIAL LAND ACQUISITION OFFICER, KIADB, MYSORE & ANR VS. ANASUYA BAI BY LRS. & ORS. [CIVIL APPEAL NO.353 OF 2017 ARISING OUT OF SLP(C) NO.12581 OF 2015], IT IS SPECIAL LAND ACQUISITION OFFI CER(SLAO) TO PAGE 3 OF 8 IT A NO. 8/BANG/2020 & C.O. NO. 5/BANG/2021 WHOM THE APEX COURT HAS DIRECTED TO DETERMINE THE COMPENSATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 29 OF KIAD ACT. FOR THESE AND GROUNDS THAT MAY BE RAISED DURING THE COURSE OF APPEAL AND ACTUAL HEARING, THE APPELLANT PRAYS THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) MAY BE SET ASIDE AND CANCELLED. C . O . NO. 5/BANG/2021 : GROUNDS OF CROSS - OBJECTIONS TAX EFFECT RELATING TO EACH GROUND OF CROSS - OBJECTION (SEE NOTE BELOW) 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT, THE LEVY U/S 201(1) IS PENAL IN NATURE AND THE ASSESSEE HAS ACTED IN THE BONAFIDE MANNER IN SHORT DEDUCTING THE TAX AT SOURCE. HENCE, NO LEVY U/S 201(1) COULD BE THERE. RS. 7,43,47,896/ - 2. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT, WHERE THE PAYEES HAVE ACCOUNTED FOR THE COMPENSATION RECEIVED IN THEIR RETURN OF INCOME AND PAID TAXES IN THE RELEVANT ASSESSMENT YEAR, IN SUCH CASES THERE CAN BE NO LEVY U/S 201(1). RS . 7,43,47,896/ - 3. THE CROSS - OBJECTOR CRAVES FOR LEAVE TO ADD TO, DELETE FROM OR TO AMEND THE GROUNDS OF CROSS - OBJECTIONS. TOTAL TAX EFFECT (SEE NOTE BELOW) BRIEF FACTS OF THE CASE ARE AS UNDER: 2. A SURVEY UNDER SECTION 13A WAS CONDUCTED ON 04/09/2013 IN CASE OF KARNATAKA I NDUSTRIAL A REAS D EVELOPMENT B OARD TO VERIFY TD S COMPLIANCES. DURING THE COURSE OF SURVEY THE LD.AO FOUND THAT BANGALORE METRO R AIL CORPORATION LTD. (BMRC) WAS DEVELOPING METRORAIL FACILITY IN BANGALORE AND HAS ENTRUSTED THE WORK OF COMPULSORY ACQUISITION OF IMMOVABLE PROPER TIES FOR ITS PROJECT TO THE KIA DB. IT WAS OBSERVED BY THE LD. AO THAT THE KIA DB AS AN INTERNAL ARRANGEMENT HAD ASSIGN ED THE SAID ACQUISITION PAGE 4 OF 8 IT A NO. 8/BANG/2020 & C.O. NO. 5/BANG/2021 WORK TO ONE OF ITS S PECIAL L AND ACQUISITION O FFICER (THE ASSESS EE BEFORE US) OPERATING FROM THE SAME PREMISES. 3. THE LD. AO OBSERVED THAT , DETAILS REGARDING COMPULSORY ACQUISITION WAS MAINTAINED BY ASSESSEE. IT CONTAINED DETAILS LIKE THE DATE OF ACQUISITION, DETAILS OF PROPERTY ACQUIRED, PERSONS FROM WHOM SUCH PROPERT Y WAS ACQUIRED, COMPENSATION DETERMINED, TAX DEDUCTED, DATE OF PAYMENT TO PARTY, DATE OF PAYMENT OF TD S ETC. THE LD. AO NOTICED FROM THE REGIST E R THAT , 196 PAYEES HAD NOT FURNISHED THEIR PAN TO THE ASSESSEE AT THE TIME OF PAYMENT. LD. AO ACCORDINGLY CALLED U PON ASSESSEE , SEEKING EXPLANATION AS TO WHY THE PROVISIONS OF SECTION 194 LA SHOULD NOT BE INVOKED. THE LD. AO WAS OF THE VIEW THAT AS PER SECTION 206A THAT HAD AN OVERRIDING EFFECT ON THE OTHER PROVISIONS OF THE A CT AND THAT , WHERE PAN IS NOT FURNISHED , THE TAX WAS DEDUCTIBLE AT 20%. THE LD.AO THUS WORKED OUT THE DISALLOWANCE IN CASE 1 96 PEOPLE WHO HAD NOT FURNISHED PAN AT 20%. THIS SHORT DEDUCTION RESULTED IN INVOKING SECTION 201(1), THEREBY TREATING ASSESSEE TO BE ASSESSEE IN DEFAULT TO THE EXTENT OF SHORT DEDUCTION . THE LD. AO COMPUTED INTEREST AT THE RATE OF 1% PER MONTH FROM THE DATE OF THE TAX DEDUCTIBLE. 4. ASSESSEE SUBMITTED THAT THE PROCEEDINGS UNDER SECTION 201 (1) AND (1A) TO BE DROPPED ON THE GROUND THAT THEY WERE IN THE PROCESS OF COLLECTIN G THE PAN AND FILED CORRECTION RETURNS. THE LD. AO WAS OF THE OPINION THAT SUBSEQUENT FURNISHING OF PAN BY SOME PAYEES SHALL NOT ALTER THE NATURE OF GRAVITY OF THE DEFAULT OF SHORT DEDUCTION WHICH WAS COMMITTED AT THE TIME OF PAYMENT AND CANNOT BE R ESOLVED . HE ACCORDINGLY IS MADE ADDITION AMOUNTING PAGE 5 OF 8 IT A NO. 8/BANG/2020 & C.O. NO. 5/BANG/2021 TO RS.24,78,26, 321/ - BY HOLDING ASSESSEE TO BE ASSESSEE IN DEFAULT UNDER SECTION 201 (1). AGGRIEVED BY THE ORDER OF LD. AO, ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A). 5. THE LD.CIT(A) HELD AS UNDER: 11. THEREFORE, IN VIEW OF THE FOREGOING DISCUSSIONS, IT IS PERTINENT TO MENTION HERE THAT THE SPECIAL LAND ACQUISITION OFFICER (METRO) IS NOT A COMPETENT AUTHORITY FOR MAKING COMPULSORY ACQUISITIONS, IN THE INSTANT CASE IT IS THE GOVERNMENT OF KARNATAKA WHICH IS THE COMPETENT AUTHORITY TO DO COMPULSORY ACQUISITIONS. THEREFORE, THOUGH THE ASSESSING OFFICER HAS PASSED AN ELABORATE ORDER U/S 201(1) & 201(1A), THIS TECHNICAL ASPECT HAS BEEN OVERLOOKED BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE FACTS, THE SPECIA L LAND ACQUISITION OFFICER (METRO) OF THE KIADB IS NOT LIABLE FOR DEDUCTION OF TDS UNDER SEC.194LA AS HELD BY THE ASSESSING OFFICER. HENCE, THIS GROUND IS ALLOWED AND THE APPELLANT GETS RELIEF ACCORDINGLY. AGGRIEVED BY THE ORDER OF LD. CIT(A) REVENUE IS I N APPEAL BEFORE US NOW. 6. I T HAS BEEN SUBMITTED BY THE LD.CITDR THAT, THE LD. CIT (A) ERRED IN HOLDING THAT THE S PECIAL L AND A CQUISITION OFFICER OF KIA DB IS NOT LIABLE FOR DEDUCTION UNDER SECTION 194 LA. IT WAS SUBMITTED THAT , THE LD.CIT (A) HAS CONCLUDED T HAT THE S PECIAL LAND ACQUISITION O FFICER IS NOT COMPETENT AUTHORITY FOR MAKING COMPULSORY ACQUISITION AND THAT IT IS THE STATE G OVERNMENT OF KARNATAKA WHICH IS THE COMPETENT AUTHORITY IN THIS REGARDS. L D.CIT DR SUBMITTED THAT , ALL THESE VERIFICATION HAS NOT BEEN CARRIED OUT BY THE LD. CIT (A) IN REGARDS TO THE PAYMENT MADE TO THE LAND OWNERS. HE SUBMITTED THAT IT NEEDS TO BE VERIFIED THAT THE PAYMENT HAS BEEN MADE BY THE S TATE G OVERNMENT THROUGH ITS AGENCY AS THE CASE MAY BE. IN THE EVEN T IT IS ESTABLISHED THAT THE PAYMENT WAS MADE BY THE STATE G OVERNMENT THE TDS LIABILITY DOES NOT ARISE. HOWEVER, IF IT IS CONTRARY , THEN THE LIABILITY IS TO BE PAGE 6 OF 8 IT A NO. 8/BANG/2020 & C.O. NO. 5/BANG/2021 DETERMINED IN ACCORDANCE WITH LAW. THE LD.CIT DR SUBMITTED THAT ALL THESE DETAILS ARE NOT PLACED BEFORE THE AUTHORITIES BELOW FOR CARRYING OUT VERIFICATION. 7. THE LD. CITDR SUBMITTED THAT THE ISSUE MAY BE REMANDED TO THE LD. CIT (A) IN ORDER TO CARRY OUT NECESSARY VERIFICATION IN RESPECT OF WHO HAS ACTUALLY MADE THE PAYMENT TO THE LANDOWNERS. 8. O N THE CONTRARY THE LD. C OUNSEL SUBMITTED DETAILS OF THE PARTIES WHOSE LAND HAVE BEEN ACQUIRED BY G OVERNMENT OF KARNATAKA ARE SUBMITTED. THE LD.AR CONTENDED THAT KIADB IS AN AGENCY OF THE STATE G OVERNMENT WHO APPROVE THE S PECIAL L AND ACQUISITION O FFICER AC QUIR ING LAND FOR THE PURPOSES OF INFRASTRUCTURE DEVELOPMENT UNDERTAKEN BY THE S TATE G OVERNMENT OF KARNATAKA. HE SUBMITTED THAT ALL THE PAYMENTS WERE MADE BY THE S TATE G OVERNMENT OF KARNATAKA TO THE LAND OWNERS , WHOSE LANDS HAVE BEEN ACQUIRED AS PER THE LIS T FILED BEFORE US. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 9. RESPONSIBILITY TO DEDUCT TAX , IS CAST ON THE PAYER. IN SOME CIRCUMSTANCES THE PERSONS REPRESENTED ON WHOSE BEHALF THE PAYMENT IS MADE IS ALSO MAD E LIABLE. IN THE PR ESENT FACTS OF THE CASE THE LD. AO FASTENED KIADB WITH SUCH LIABILITY . IT IS SUBMITTED BY THE LD.C OUNSEL THAT THE S PECIAL LAND A CQUISITION O FFICER WAS ACTING ON BEHALF OF KIADB. 10. WE NOTE THAT THE LD. CIT(A) WENT ON THE FOOTING THAT THE SPECIAL LAND ACQUISITION OFFICER IS NOT LIABLE TO DEDUCT TDS EVEN THOUGH HE RECORDS THAT THE SPECIAL LAND ACQUISITION OFFICER IS NOT THE COMPETENT AUTHORITY FOR MAKING COMPULS ORY ACQUISITIONS. WE PAGE 7 OF 8 IT A NO. 8/BANG/2020 & C.O. NO. 5/BANG/2021 NOTE THAT LD. CIT (A) HAS NOT RETURNED THE FINDING THAT THE L AND ACQUISITION OFFICER WAS ACTING ON BEHALF OF S TATE G OVERNMENT OF KARNATAKA THROUGH KIADB. THIS FACT HAS NOT BEEN VERIFIED AS TO ON WHOSE BEHALF SPECIAL LAND ACQUISITION OFFICER HAS ACQUIRED THE LAND AND WHO HAS MADE THE PAYMENTS TO THE LAND OWNERS. 11. WE ACCORDINGLY REMAND THIS ISSUE B ACK TO THE LD. CIT (A). THE LD.CIT (A) WILL VERIFY THE DETAILS IN RESPECT OF THE ACTUAL PAYER TO THE OWNERS OF THE LAND WHOSE PROPERTY HAS BEEN ACQUIRED. IN THE EVENT IT IS AN ACQUISITION UNDER SECTION 28 OF THE LAND ACQUI SITION A CT AND THE COMPENSATION PAID IS AS PER SECTION 29 BY THE S TATE G OVERNMENT THEN NO TDS LIABILITY ARISES. NEEDLESS TO SAY THAT PROPER OPPORTUNITY OF BEING HEARD MUST BE GRANTED TO ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY WE REMAND THIS ISSUE BACK TO THE LD. CIT (A) TO CONSIDER THE ABOVE ASPECTS IN ACCORDANCE WITH LAW. IN THE RESULT APPEAL FILED BY REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. CROSS OBJECTION FILED BY ASSESSEE IS AGAINST THE INTEREST LEVIED UNDER SECTION 201 (1) OF THE A CT HOLDI NG ASSESSEE TO BE ASSESSEE IN DEFAULT 1 2 . THE LD.CIT(A) CONFIRMED THE ADDITION M ADE UNDER SECTION 201(1) AND 201 (1A) OF THE A CT AS ASSESSEE DID NOT PROVIDE ANY INFORMATION. WE REMAND THIS ISSUE BACK TO THE LD. CIT (A) TO CONSIDER IT AFRESH IN LIGHT OF DOCU MENTS FILED BY ASSESSEE IN SUPPORT OF ITS CLAIM. NEEDLESS TO SAY THAT PROPER OPPORTUNITY OF BEING HEARD MUST BE GRANTED TO ASSESSEE IN ACCORDANCE WITH LAW. PAGE 8 OF 8 IT A NO. 8/BANG/2020 & C.O. NO. 5/BANG/2021 ACCORDINGLY THE CROSS OBJECTION FILED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT APPEAL FILED BY REVENUE AND CROSS OBJECTION FILED BY ASSESSEE STANDS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 1 4 T H OCTOBER, 2021. S D / - S D / - ( CHANDRA POOJARI ) ( BEENA PILLAI ) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED: 1 4 T H OCTOBER, 2021. /MS/ COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE
