The question that falls for decision is the scope of Section 194LA of the Income Tax Act, 1961, which reads as follows:

"194LA. Payment of compensation on acquisition of certain immovable property. Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten percent of such sum as income-tax thereon."

Petitioner seeks to quash Ext.P4. Ext.P4 is issued to the CEO of the petitioner advising the petitioner to take immediate steps to ensure compliance with the statutory provisions for deduction of tax at source and remittance of the same to the Government account.

2. Petitioner is a Society established under the Travancore Cochin Societies Registration Act, 1955. It is managed by a Board nominated by the Government of Kerala and it is set up with the objective of development of Information Technology Parks. Briefly put the case of the petitioner is as follows:

As and when the land is identified, which is suitable for the project, Government issues notification under Section 4 of the Land Acquisition Act, 1894 notifying the lands. A notification is also issued under Section 6(1) of the Survey and Boundaries Act, 1961. The price of the land is determined by the District Level Purchase Committee, which consists of District Collector as Chairman. There is an assessment of the replacement value of the land and the recommendation of the District Level Purchase Committee is forwarded to the Empowered Committee for approval. The Empowered Committee consists of the Chief Secretary of the State as the Chairman. The other members are the Principal Secretary, Secretary (Finance), Secretary (PWD), Secretary (Law), Secretary (FTP) and any other member nominated by the Chief Secretary. It considers the proposal and would make necessary modifications. The title deeds are to be verified by the Land Acquisition Officer and there is a scrutiny of the title deeds by Advocates and on the basis of the opinion expressed by the counsel and the Land Acquisition Officer, recommendations are issued. It is the further case of the petitioner that the transaction entered into by the petitioner for acquisition of land falls into two categories. The first category consists of those transactions where the land owners arrive at an agreement and they execute the sale deed in favour of the petitioner. The second category consists of cases where negotiated agreement is not arrived at and acquisition is done under the Land Acquisition Act. According to the petitioner, in the first category of transaction there is a sale of property, which is covered by the provisions of Transfer of Property Act and it does not consist of acquisition of property by the Government for the project. In a case where there is acquisition of property by the Government, the procedure involves issuance of a notification under Section 4, which constitutes a preliminary notification, declaration under Section 6 and direction under Section

7. Thereafter, the property has to be marked unless it is marked under Section 4. Under Section 9, the Collector issues notice to the parties to enable the making of claims, and inquiry has to be held and finally an award is to be passed under Section 11 of the Act. Section 48 of the Land Acquisition Act permits withdrawal of the Government from the acquisition except in a case covered by Section 36 of the Act, that is where possession has not been taken. Ext.P1 is produced as the guidelines issued by the Government. Ext.P2 is produced as copy of the notification under Section 4 of the Land Acquisition Act and Section 6 of the Survey and Boundaries A