Case Law Details
Chief Accounts Officer Vs ITO (ITAT Bangalore)
Provisions of section 194LA of the Act would apply only in the case of a compulsory acquisition and not to a case where lands were surrendered by land owners under section 14B of KTCP Act. Hon’ble High Court also held that since BBMP is not paying consideration for acquisition of land in the form of cash, cheque, DD or any other mode prescribed under section 194LA but is only issuing CDR, the provisions of section 194LA of the Act are not attracted. The Hon’ble Court also held that when CDRs are issued, it is not possible to quantify the value in monetary terms and therefore TDS obligations cannot operate. For all the above reasons, the Hon’ble High Court held that the provisions of section 194LA of the Act are not attracted to a case of issue of DRCs by the BBMP for acquisition of land and therefore the assessee cannot be considered as an assessee in default under section 201(1) of the Act.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
These appeals by the assessee are directed against the separate ex-parte orders of CIT(A)-13, Bengaluru, dated 03.12.2019; for Assessment Year 2013-14 dismissing the assessee’s appeals in limine by not condoning the delay in filing the appeal before him and thereby confirming the orders of ITO (TDS) Ward – 1(1), Bangalore, dated 17.03.2015 passed under section 201(1) and 201(1A) of the Income Tax Act, 1961 (in short ‘the Act’).
2. The assessee, Bruhat Bengaluru Mahanagara Palike (BBMP) is a local authority overseeing the development and provision of civic amenities of the city of Bengaluru. In consideration for acquisition of land for the purpose of providing civic amenities and infrastructure, the Assessee provided Development Right’s Certificate(DRC). According to the revenue the Assessee ought to have deducted tax at source on the market value of the DRC u/s.194LA of the Act and since the Assessee failed to deduct tax at source, the AO passed two orders both dated 17.3.2015 holding the assessee as an assessee in default u/s.201(1) of the Act and levied interest on the tax not deducted at source u/s.201(1A) of the Act.
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