Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty. CBDT further extends the time for Linking PAN with Aadhaar from 31st December 2017 to 31st March 2018.

AO was bound not to levy tax if assessee wrongly paid tax on acquisition of exempted land

Assessee received compensation on acquisition of land - He paid tax after working out capital gains reckoning fair market value (FMV) as on 1-4-1981 at Rs. 50,000 per cent - Assessing Officer issued scrutiny notice under section 143(2) holding FMV at Rs. 1,400 per cent - In meantime, High Court in view of section 96 of Right to Fair Compensation Act, 2013 held that such compensation is exempted from tax - Petitioner did not file revised return as he was made to understand that he had no liability to pay tax on capital gains resulting from acquisition of land - Whether since capital gains on impugned transaction was exempted from payment of tax, Assessing Officer had a duty to refrain from levying tax on said capital gains and he could not refuse to grant relief under section 143 to assessee merely on technical plea that assessee had not filed a revised return - Held, yes [Para 11][In favour of assessee]

Refer:[2018] 89 taxmann.com 212 (Kerala)

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