SRI. ASHOK B JADHAV V. THE COMMISSIONER OF INCOM-TAX ANR

WP/81155/2012

AI Insights

The case involves Ashok B. Jadhav, the petitioner, who sought to quash an order by the Commissioner of Income Tax that denied his request for a refund of income tax deducted from compensation received for land acquisition under the Upper Krishna Project. The compensation was paid in installments from 2000-01 to 2005-06, and although the compensation was exempt from income tax, the Land Acquisition Officer deducted tax at source and issued a TDS certificate only in 2005-06. The petitioner argued that the tax deduction was illegal as it was made after the cutoff date of 01.06.2000, as per Section 194-L(2) of the Income Tax Act, 1961. The court found no delay on the part of the petitioner in filing for the refund and ruled in favor of the petitioner, emphasizing that the income tax could only be deducted in accordance with statutory provisions.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 727180 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-07-2013
• Assessment Year: misc
• Other Referred Cases: A. Balakrishnan vs. General Manager, Hindustan Machine Tools Ltd. and Another
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANANTH JAHAGIRDAR
• Assessee Lawyers: H R KAMBIYAVAR
• Keywords: Compensation; Income tax deduction; Land Acquisition; Upper Krishna Project; Writ of Certiorari
• Section: 265; 226; 227; 194-L

Judgement Text

" - 1 - IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT GULBARGA DATED THIS THE 5TH DAY OF JULY, 2013 BEFORE THE HON’BLE MR.JUSTICE MOHAN .M. SHANTANAGOUDAR WRIT PETITION No.81155/2012 AND WRIT PETITION NOs.82232-235/2012 (T-IT) BETWEEN: ASHOK B. JADHAV BEHIND NCC OFFICE AGE: 46 YEARS OCC: AGRICULTURE SOLAPUR ROAD BIJAPUR ... PETITIONER (BY SRI H.R.KAMBIYAVAR, ADVOCATE) AND: 1. THE COMMISSIONER OF INCOME TAX OPP. CIVIL HOSPITAL DR.B.R.AMBEDKAR ROAD BELGAUM 2. THE INCOME TAX OFFICER WARD-I, BIJAPUR – 586 101 ... RESPONDENTS (BY SRI ANANTH JAHAGIRDAR, ADVOCATE FOR SRI AMEET KUMAR DESHPANDE, ADVOCATE) - 2 - THESE WRIT PETITIONS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR A WRIT IN THE NATURE OF CERTIORARI, QUASHING THE ORDER BEARING No.CIT/BGM/119(2)(b)/2009-10 DATED 18.3.2010 PASSED BY THE 1ST RESPONDENT VIDE ANNEXURE-F AND ETC. THESE PETITIONS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Petitioner has sought for quashing Annexure-F passed by the first respondent dated 18.03.2010. He has also sought for direction to return deducted amount out of the compensation to be paid to the petitioner. 2. Petitioner is the owner of certain lands. Petitioner’s lands were acquired along with other lands for implementation of Upper Krishna Project (UKP); compensation was paid during the assessment year 1999 to 2006. However, insofar as petitioner is concerned, compensation was paid in installments. The first installment of payment was made in the year 2000-01 and last installment of payment was made in - 3 - the year 2005-06. Since there was delay in disbursement of the compensation, interest was also paid to the petitioner. Since the compensation so received is exempted from income tax, petitioner did not disclose the receipt of compensation to income tax department by filing returns. However, the Land Acquisition Officer deducted income tax at source on the entire payments made and had remitted the same to the Department. The TDS Certificate was issued in favour of the petitioners in the financial year 2005-06 only. Immediately thereafter, petitioner filed application for return of the income tax so deducted on 25.02.2005 and one more application was filed for return of income tax on 27.12.2007 for the Assessment Year 2000-01 to 2005-06 before the second respondent. Along with the application petitioner enclosed original TDS certificate also. The application filed by the petitioner for return of income tax deducted from the compensation is rejected by the impugned order Annexure-F dated 18.03.2010 - 4 - on the ground that the petitioner’s had not prayed for return within a period of six years; i.e., in other words, due to the alleged delay in filing returns. 3. In the matter on hand, virtually, there is no delay on the part of the petitioner. The TDS certificate was issued in favour of the petitioner only on 10.02.2005 as is clear from Annexure-A. Only thereafter, petitioner has come to know that an amount of Rs.2,35,227/- is deducted at source from out of the compensation awarded. The returns were filed by the petitioner in the year 2005 itself. Thus, there is no delay on the part of the petitioner. 4. There cannot be any dispute that under Section 194-L (2) proviso of the Income Tax Act, 1961, no deduction shall be made under Section 194-L from any payment made on or before 01.06.2000. Thus, deduction made by the Land Acquisition Officer towards income tax, out of the compensation awarded is illegal. - 5 - The Land Acquisition Officer could not have deducted any amount from out of the compensation awarded in favour of the petitioner after 01.06.2000. In the matter on hand, compensation is awarded to the petitioner after the year 2000. Therefore, the amount so deducted has to be returned to the petitioner. 5. In addition to the same, as has been held by this Court in A. BALAKRISHNAN Vs. GENERAL MANAGER, HINDUSTAN MACHINE TOOLS LTD. AND ANOTHER reported in (2007) 290 ITR 227, refusal to process return on the ground that it was not filed on time is not justified. The amount which can be realized by way of income tax from an assessee can only be in accordance with the statutory provisions, as is mandated under Article 265 of the Constitution of India. The said judgment is confirmed by the Division Bench of this Court. - 6 - 6. Be that as it may, since there is no delay on the part of the petitioner and as certain amount is deducted towards income tax in contravention of the provisions of Section 194-L (2) proviso, the respondents shall return the deducted amount in favour of the petitioner. The impugned order passed by the Commissioner vide Annexure-F dated 18.03.2010 stands quashed. Accordingly, the writ petitions stand disposed of with a direction to the second respondent to consider the return filed by the petitioner dated 25.02.2005 and 28.02.2005 Annexures-B to B3 as per law and in the light of the aforementioned observations, as early as possible but not later than the outer limit of three months from the date of receipt of copy of this order. Sd/- JUDGE NB* "