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Facts
The assessee's lands were acquired under Section 3A of the National Highway Act, 1956, with the compensation deposited on 08.01.2015. The assessee claimed exemption under Section 96 of the RFCTLARR Act, 2013.
Held
The Tribunal held that since the compensation was deposited after the appointed date of 01.01.2015 under the RFCTLARR Act, the assessee is eligible for the exemption. The clarification from the Ministry of Road and Transport and Highway dated 28.12.2017 supports this interpretation.
Key Issues
Whether the compensation received for land acquisition is eligible for exemption under Section 96 of the RFCTLARR Act, 2013, when the deposit occurred after the Act's commencement date.
Sections Cited
Section 143(3) of the Income Tax Act, 1961, Section 3A of the National Highway Act, 1956, Section 96 of The Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation and Resettlement Act, 2013, Section 3G of the NH Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “DB” BENCH, AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL
O R D E R PER SATBEER SINGH GODARA, JUDICIAL MEMBER:
This assessee’s appeal for assessment year 2015-16 arises against Commissioner of Income Tax (Appeals)-2 [in short, the “CIT(A)”] Agra’s in case No. 312/CIT(A)-2/Agra/ACIT-2(1)/Agra/2017-18 dated 15.02.2019, in proceedings under Section 143(3) of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’]. 2. Heard both the parties at length. Case file perused.
Ravi Verma 3. It emerges during the course of hearing that the sole substantive issue which has arisen between the parties in the assessee’s instant appeal is that of taxability of the compensation amount in furtherance to his lands acquired u/s 3A of the National Highway Act 1956 dated 20.01.2010 followed by the deposit of the compensation in the relevant previous year on 08.01.2015. The assessee’s case all along is that it is covered u/s 96 of The Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“RFCTLARR Act”) applicable w.e.f. 01.01.2015
The Revenue vehemently submits in light of the foregoing chronology of events is that once the assessee’s lands had been acquired way back in the year 2010, his impugned compensation has rightly been held as not entitled for the exemption u/s 96 of the “RFCTLARR Act”, 2013.
Learned counsel on the other hand has invited our attention to the relevant clarification issued by the Ministry of Road and Transport and Highway dated 28.12.2017 as follows:
“(iii) By now, it is also a salted proposition that the first, Second and Third Schedule of the RECTLARR Act, 20p small be applicable to the NH Act, 1956 with effect from 01.01.2015. As such, the followings is clarified. (a) All cases of Land acquisition where the Awards had not been announced under Section 3G of the NH Act till 31.012.2014 or were such awards had been announced but compensation had not been paid in respect of majority of the land bodings under acquisition as on 31.12.2014, the compensation would be dayab acquisition with the first Schedule of the RECTLARR Act, 2013. (b) In cases where the land acquisition process was initiated and award of compensation under Section 3G had also been announced before 01.01.2015. but the full award of Award had not been deposited by the acquiring agency with the CALA, the compensation amount would be liable to be determined in accordance with the First Schedule w.e.f. 01.01.2015; Ravi Verma (c) in cases, where the process of acquisition of land stood completed (i.e. Award under Section 3G announced by CALA, Amount deposited by the acquiring agency in the CALA, and compensation paid to the landowners in respect of major of the land under acquisition) as on or before 31.12.2014. The process would the deemed to have been completed and settled. Such cases would not be re-opened.”
There would be hardly any dispute between the parties that the assessee’s case covered in para “b” wherein although his land acquisition was put to acquisition much earlier but the award amount has been deposited by the agency concerned on 08.01.2015 i.e. very well after the “appointed” date 01.01.2015 under the RFCTCARR law. We wish to make it further clear that once the assessee’s case is covered under the new law, even the CBDT’s landmark circular No. 36/2016 dated 25.10.2016 has granted exemptions to such a compensation u/s 96 thereof. We accordingly reverse both the learned lower authorities’ action assessing the assessee’s compensation in very terms. The assessee succeeds in his sole substantive ground in very terms.
This assessee’s appeal is allowed. Order pronounced in the open court on 10.02.2025