While The Submission Of Sri B.narasimha Sarma, Learnedsenior Standing Counsel For The Income Tax Department, That Theorder Of The Bilaspur Bench Of Itat In The v. Ito[[1]]Is Inapplicable, Has Considerableforce, We Are Satisfied That The Conclusion Of The Tribunal That Section194La Of The Act Is Not Attracted Is In Accorda

THE HON’BLE SRI JUSTICE RAMESH RANGANATHANANDTHE HON’BLE SRI JUSTICE M.SATYANARAYANA MURTHYI.T.T.A.No.517 of 2015 ORDER:(per Hon’ble Sri Justice Ramesh Ranganathan) This appeal under Section 260A of the Income Tax Act (for short‘the Act’) is preferred against the order passed by the Income TaxAppellate Tribunal, Visakhapatnam Bench, in ITA.No.375/Vizag/2012dated 04.03.2015. The respondent-assessee is a religious endowment. It paidcompensation to evict some persons who had illegally occupied andwere enjoying the lands belonging to them. On the ground that therespondent-assessee did not deduct tax at source, and had thereby violated Section 194LA of the Act, the assessing authority passed anorder under Section 201(1)/201(1A) and Section 206C/206C(7) of theAct. Aggrieved thereby, the respondent-assessee carried the matter inappeal, and the Commissioner of Income Tax (Appeals) upheld theaction of the assessing authority in raising the demand under Section201(1)/201(1A) of the Act. The respondent-assessee carried thematter in further appeal to the Income Tax Appellate Tribunal (for short‘the Tribunal’). In the order under appeal, the Tribunal noted that thecompensation paid by the assessee was for the private housesconstructed on their land; the persons to whom compensation waspaid did not have title over the said land; there was no legislationpassed for acquiring any property; the Government had issuedG.O.Ms.No.413 dated 01.04.2006 constituting a committee for shiftingthe residents of all the houses uphill to an area downhill, and to makepayments to such residents; Section 194LA of the Act applied only tocases of compulsory acquisition under a law for the time being in force;and, as there was no compulsory acquisition of any immovable property by the assessee, Section 194LA of the Act was notapplicable. Sri B.Narasimha Sarma, learned Senior Standing Counsel forthe Income Tax Department, would contend that as compensation waspaid for the structures, albeit on the land belonging to the respondent-assessee, it must be presumed to be acquisition of such buildings; andconsequently the respondent assessee was obligated to comply withthe requirements of Section 194LA of the Act. We must express ourinability to agree. Section 194LA of the Act applies only where compensation ispaid to a resident on account of “compulsory acquisition under any lawfor the time being in force of any immovable property”. While thebuildings, for which compensation was paid, no doubt constituteimmovable property, the compensation paid by the assessee to thosewho had raised these illegal and unauthorised structures was neitherfor compulsory acquisition nor is such compensation referable to anylaw relating to compulsory acquisition of immovable property. It is notin dispute that the lands, on which houses were illegally constructedby encroachers, belonged to the respondent-assessee. Thecompensation paid by the assessee to the encroachers was only tohave them evicted from their lands at the earliest. Such payment ofcompensation cannot be equated to acquisition of immovable propertymuch less compulsory acquisition under any law for the time being inforce. While the submission of Sri B.Narasimha Sarma, learnedSenior Standing Counsel for the Income Tax Department, that theorder of the Bilaspur Bench of ITAT in the case of Naya RaipurDevelopment Authority vs. ITO[[1]]is inapplicable, has considerableforce, we are satisfied that the conclusion of the Tribunal that Section194LA of the Act is not attracted is in accordance with law. Nosubstantial question of law arises for consideration in this appeal necessitating our interference. The appeal fails and is, accordingly, dismissed. Themiscellaneous petitions pending, if any, shall also stand dismissed.There shall be no order as to costs. _____________________________ RAMESH RANGANATHAN, J Date: 01.06.2016v v ___________________________________ M. SATYANARAYANA MURTHY, J [1](2014) 61 SOT 244