TMI Blog2016 (8) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... Is under section 195 of the Act. No application was made under section 197 in respect of the residents of India. The order of the Tribunal, therefore, proceeds on a factually incorrect basis. The decision of the Tribunal, therefore, rejecting the application for admission of additional evidence in the form of revenue records is incorrect and based on incorrect findings of law and of fact. Even assuming that the revenue records do not conclusively establish the appellant’s case that the land was agricultural land, it cannot by any stretch of imagination be held that they are irrelevant. The revenue records are relevant to the issue as to whether the lands referred to therein are agricultural lands or not. To a question as to whether his department verified whether any actual agricultural activity is being conducted on the lands, he replied that their duty is only to identify the owners of the land and that they are not concern as to whether any agricultural activity is being carried on at the site or not. The Superintendent also expressly stated that no verification is required to be made or is actually made as to whether any agricultural activity is conducted on the land or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med that under the provisions of section 195 of the Act tax was to be deducted at 30% of the compensation amount and that 2% surcharge on income tax was also deductable. What is important to note is that the letter is only in respect of TDS qua the amounts payable to Non-Resident Indians. It does not relate to the payment made to residents of India. We will indicate the importance of this distinction later. 4. On 28.06.2005 Income Tax Officer conducted a survey during which the statements of the Patwari and the Superintendent, employees of the appellant, were recorded. It was found that the appellant had made payment towards compensation for acquisition of land at Rs. 66,05,507/- on which TDS of Rs. 6,88,874/- was to be deducted and paid under section 194- LA together with interest of Rs. 49,651/- under section 201(IA) aggregating to Rs. 7,38,525/-. It was also found that the assessee had made payments to NRIs on which the deductions made and paid over were short by Rs. 7,92,490/-. This appeal, however, is not concerned with the TDS in respect of NRIs. It is confined to the question of TDS qua residents. 5. Sections 2(1A), 2(14)(a)(iii) and 194LA of the Income Tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14) of section 2; ( ii ) immovable property means any land (other than agricultural land) or any building or part of a building. 6. The Income Tax Officer held that section 194LA was applicable to the appellant s case and that there was non-compliance of the section on the appellant s part as no tax had been deducted at source at the time of making payment of compensation to the resident land owners. He noted that the appellant had, however, duly deducted tax on the payments made to the NRIs. The CIT(Appeals) upheld the order in this regard except in respect of an amount of Rs. 73,609/- paid to one of the landowners. 7. The appellant s case is that the lands acquired being agricultural lands were outside the ambit of section 194L and 194LA. The order further records that the appellant had made an application under Rule 46A of the Income Tax Rules, 1962 to produce additional documentary evidence, namely, revenue records to establish that the lands were agricultural lands. This application was rejected on the ground that the Patwari and the Superintendent who were the appellant s employees had in the enquiries made statements contrary to the appellant s case and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is saying that the land acquired by the assessee is agricultural land is not correct. Hence, there is no question of admission of additional evidence in the form of Revenue Record. The same is rejected. 9. The Tribunal proceeds on the incorrect basis that the words agricultural land are to be determined with reference to the definition in section 2(14). The Income Tax Act, 1961 does not define the words agricultural land . Section 2(1A) defines agricultural income. The section uses the word agricultural . For instance, sub section 2(1A)(a) defines agricultural income to mean any rent or revenue derived from the land used for agricultural purposes. Sub section (1A)(b) defines agricultural income to mean any income from such land by agriculture. However, the words agricultural and agriculture and the words agricultural purposes are not defined. This is recognized by the judgment of a Division Bench of the Uttarakhand High Court in Commissioner of Income Tax, Meerut v. M/s Green Gold Tree Farmers (P) Ltd. 2007 Tax. L.R. 609 (paragraph-12). The observation of the Tribunal that the question whether a particular land is agricultural land or not is to be determined wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject to which such certificate may be granted and providing for all other matters connected therewith. 12. If an assessee is not bound to deduct tax at source and to pay the same over and the authority under the Act holds otherwise, it is always open to the assessee to resist the department s claim in the assessment proceedings itself. It is not necessary for the assessee to make an application under section 197 of the Act. Section 197 only entitles an assessee to make an application to the Assessing Officer for a certificate that his total income justifies no deduction of income tax. If such an application is made, the Assessing Officer is bound to give him such certificate as may be appropriate provided of course that he is satisfied that the assessee is entitled to it. This is clear firstly from sub section (1) of section 197 of the Act which provides that the Assessing Officer shall on an application made by the assessee in this behalf give to him such certificate as may be appropriate. The obligation is on the Assessing Officer to give the assessee a certificate as may be appropriate and not on the assessee to make an application for the same. There is no requirement eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot by any stretch of imagination be held that they are irrelevant. The revenue records are relevant to the issue as to whether the lands referred to therein are agricultural lands or not. 18. Mr. Sethi invited our attention to the assessment order which refers to the statements made by the appellant s employees, namely, the Patwari and the Superintendent. Their evidence is of no assistance to the issue as to whether the lands were agricultural land or not. The Patwari infact stated that he had not considered the revenue records and that his duty was only to identify the owners. His statement that he had not seen the crops on the land is by no means conclusive of the question as to whether the lands were agricultural or not. To a question as to whether his department verified whether any actual agricultural activity is being conducted on the lands, he replied that their duty is only to identify the owners of the land and that they are not concern as to whether any agricultural activity is being carried on at the site or not. The Superintendent also expressly stated that no verification is required to be made or is actually made as to whether any agricultural activity is c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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