SMT. ANNAPURNA MISHRA,BHUBANESWAR vs. ITO, WARD-3(1), BHUBANESWAR

This is an appeal filed by the assessee against the order of

the Commissioner of Income Tax(Appeals)-2, Bhubaneswar dated

31.8.2018 in I.T.Appeal No.0280/2017-18 for the assessment

year 2015-16.

I. For that the order of the forums below are illegal, unjust and excessive in the facts and circumstances of the case and beyond jurisdiction as such should have been passed giving effect to the CBDT circular alongwith circular of Ministry of Road Transportation and Highways and the principles of law

P a g e 1 | 7 decided by Hon’ble apex Court. Hence, the orders passed have to be quashed in toto. II. For that the points of law raised before the CIT(A)-II, Bhubaneswar in filing of the modification/rectification petition submitting that the appellant received the compensation from the Government of India, Ministry of Road Transport and Highways amounting to Rs. 12,93,070/- should have been reduced in view of CBDT Circular No.36 vide dt. 25.10.2016 and the points of law decided by the Hon'ble Apex Court as well as RFCTLARR Act of 2013 applicable to the facts of the Circular of Ministry of Road Transport & Highways. Therefore the capital gain is not to be levied in the facts of the case and that has to be exempted entirely. Therefore failure of the forums below to appreciate but to skip over the relevant provisions caused illegality and denial of statutory law already settled.

III. For that due consideration should have been made to the report of the qualified Valuer and also the determination of compensation by National Highway Authorities. Further all these grounds raised before the Id. Assessing Officer as well as the Id. First Appellate Authority regarding the existence of structure, payment of electricity bill, municipality tax, etc. were avoided and ignored and no consideration as such were made with observation that there was no evidence regarding watch and ward and construction of Ground Floor and First Floor alleged were beyond his knowledge, as such opportunity to explain the details could have been extended.. Hence the order passed by the forums needs to be quashed and vacated.

IV. For that the provision of Sec.96 of the RFCTLARR Act, 2013 and the points of Law raised before the Id. CTT(Appeals)-II in filing of the modification/rectification petition as well as the order passed rejecting to entertain the Circulars are bad in law. As such orders passed by the Forums need to be quashed and vacated.”

belatedly filed before the Tribunal. This appeal is late by 110

P a g e 2 | 7 days. In this regard, ld A.R. has placed certain information on

record to establish that the order of the CIT(A) is dated 31.8.2018

and the assessee filed a petition for modification and rectification

of mistake before the CIT(A) invoking section 154 of the Act to

consider the CBDT circular. The petition u/s.154 was disposed by

the CIT(A) on 13.2.2019 received by the assessee on 22,.2.2019,

and, therefore, as soon as the order was received, the appeal was

filed before the Tribunal. Considering the reasons given in the

condonation petition, I hereby condone the delay and admit this

appeal for adjudication.

materials on the record of the Tribunal. Ld A.R. of the assessee

submitted that the property of the assessee was compulsorily

acquisitioned by National High Way, Keonjhar through Notification

made by Collector Keonjhar in the financial year 2014-15 and the

assessee was paid a compensation of Rs.12,93,070/- on

31.3.2015. Ld A.R. submitted that the assessee was under

bonafide belief that the compulsory acquisition of land and

building is exempt from income tax as per “RFCTLARR Act, 2013

and the assessee being a lady spent the said amount for

renovation of village temple. Ld A.R. also submitted that the

P a g e 3 | 7 CIT(A) overlooked the CBDT Circular No.36 of 2016 dated

25.10.2016 and circular NBo.11011/30/2015-LA Govt of India,

Ministry of Road Transport & Highways regarding applicability of

RFCTLARR Act 2013 on land acquisition under National High Ways

Act, 1956 regarding exemption of tax on land. Ld A.R. submitted

that as per the decision of Hon’ble apex Court in the case of

Balkrishna vs Union of India and others to support the issue of

exemption, the assessee filed a petition u/s.154 of the I.T.Act for

rectification and modification of order passed by the CIT(A) dated

31.8.2018, which was rejected with the observation that these

circulars were neither produced at the time of assessment

proceedings nor at the time of first appellate proceedings and,

therefore, there is no mistake in the order which requires

rectification u/s.154 of the Act.

that under the existing provisions of the Income-tax Act 1961

('the Act'), an agricultural land which is not situated in specified

urban area, is not regarded as a capital asset. Hence, capital gains

arising from the transfer (including compulsory acquisition] of

such agricultural land is not taxable. Finance (No, 2] Act, 2004

inserted section 10(37) in the Act from 01.04.2005 to provide

specific exemption to the capital gains arising to an Individual or a

P a g e 4 | 7 HUF from compulsory acquisition of an agricultural land situated in

specified urban limit, subject to fulfilment of certain conditions.

Therefore, compensation received from compulsory acquisition of

an agricultural land is not taxable under the Act (subject to

fulfilment of certain conditions for specified urban land).

from 1st January, 2014, in section 96, inter alia, provides that

income-tax shall not be levied on any award or agreement made

[except those made under section 46) under the RFCTLARR Act

Therefore, compensation received for compulsory acquisition of

land under the RFCTLARR Act (except those made under section

46 of RFCTLARR Act), is exempted from the levy of income tax.

considered by the lower authorities, the matter may be restored

back to the file of the Assessing officer to pass denovo assessment

considering the circulars.

available either before the Assessing Officer or before the CIT(A)

and, therefore, there had no occasion to consider the circulars. Ld

D.R. also submitted even though the CIT(A) ought to have

considered the circulars, he was duty bound to remand the matter

P a g e 5 | 7 back to the file of the AO for giving a remand report. Therefore,

in order to avoid the multiplicity of proceedings, he had no issue if

the matter is restored to the file of AO.

that the department is duty bound to adhere to the instruction of

the CBDT while disposing the proceedings before them. There is

no dispute that both the circulars now referred by the ld A.R. of

the assessee were not furnished before them. Therefore, they

had no occasion to consider the same. Be that it may, looking to

the facts and circumstances of the case, I consider it proper and

justifiable that in order to render substantial justice, the matter

needs to be restored back to the file of the Assessing Officer to

consider the CBDT Circular No.36 of 2016 and Circular

No.11011/30/2015-LA before making denovo assessment. The

assessee is directed to file both the circulars before the Assessing

Officer. After that the Assessing Officer is directed to consider the

applicability of Circulars and other provisions of law. With these

directions, the appeal is restored to the file of the Assessing

officer.

P a g e 6 | 7

10.. In the result, appeal filed by the assessee is allowed for

statistical purposes.

Order pronounced on 16 /05/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 16 /05/209 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Smt. Annapurna Mishra, B-2, P.S.Khandagiri, Sainath Place, Jagamohan Nagar, Bhubaneswar

Sr. Pvt. Secretary, ITAT, Cuttack

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