Pune Municipal Corporation Vs ACIT (Bombay High Court)
Bombay High Court held that Section 194C and Section 194LA of the Income Tax Act would not apply when TDR Certificates are issued in lieu of compensation. Accordingly, order passed u/s. 201 and 201(1A) stayed.
Facts- The present Writ Petition is filed to quash and set aside the impugned Order passed u/s. 201 and 201 (1A) of the Income Tax Act 1961 and the impugned Demand Notice issued pursuant thereto u/s. 156.
By the impugned Order, the Petitioner has been held as an Assessee in default for not deducting TDS u/s. 194C, at the time of issuing Transferrable Development Rights (TDR) to the developer as per the instructions of the Slum Rehabilitation Authority, and which was implementing a Slum Scheme on a particular plot of land. The other reason for holding the Petitioner as an Assessee in default is because the Petitioner has not deducted TDS u/s. 194LA for issuing TDR in lieu of compensation for lands acquired for public purposes from the original owners as contemplated u/s. 126 of the MRTP Act, 1966.
Conclusion- Held that Section 194C and Section 194LA would not apply when TDR Certificates are issued in lieu of compensation. As mentioned earlier, we find support for this reasoning by referring to Section 194B as well as Section 194R, which in fact contemplate as to what is to be done when payment is to be made entirely in kind or partly in cash and partly in kind. Those provisions are conspicuously absent in Section 194C as well as Section 194LA of the Income Tax Act.
