Y.NARAYANA KAIMAL V. THE UNION OF INDIA

OP/22934/1999

AI Insights

The case involves K. Narayana Kaimal, the petitioner, challenging the applicability of Section 194-L of the Income-tax Act to the compensation awarded to him following land acquisition proceedings. The compensation amount was Rs.2,14,311, of which Rs.1,41,000 had already been paid, leaving a balance of Rs.73,311. The Income Tax Officer (TDS), Kochi, issued a notice to the Special Tahsildar (LA), Kakkanadu, regarding the tax deduction on the remaining compensation. The petitioner contested this deduction, arguing against the vires of Section 194-L and the communication (Ext.P2) issued by the Income Tax Officer. The court's decision referenced a prior judgment upholding the validity of Section 194-L and clarified that no tax was to be deducted from the remaining compensation as it was below the specified threshold.

• Counselvise Citation: [2007] 140 COUNSELVISE.COM (IT) 722481 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 21-08-2007
• Assessment Year: misc
• Other Referred Cases: O.P. No.28719/1999
• Laws Referred To: Income-tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K R MENON
• Assessee Lawyers: K JAJU BABU
• Keywords: Compensation; Land Acquisition; Tax Deduction; Vires challenge
• Section: 194-L

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR TUESDAY, THE 21ST AUGUST 2007 / 30TH SRAVANA 1929 OP.No. 22934 of 1999(E) ---------------------------------- PETITIONER: ------------------- K. NARAYANA KAIMAL, FLAT NO. 134, AISWARYA NAGAR, THAIKKATTUKARA.P.O, ALWAYE - 683 106. BY ADV. SRI.K.JAJU BABU. RESPONDENTS: ------------------------ 1. THE UNION OF INDIA, REPRESENTED BY THE SECRETARY, FINANCE, NEW DELHI. 2. THE INCOME TAX OFFICER (T.D.S.), DIVISION III, CENTRAL REVENUE BUILDING, L.S. PRESS ROAD, KOCHI - 18. 3. THE SPECIAL TAHSILDAR (L.A) GENERAL, ERNAKULAM. BY ADV. SRI.P.K.R.MENON(SR.),SC FOR IT, THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 21/08/2007,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON C.M.P. NO. 3804/1999 IN O.P. NO. 22934/1999 DISMISSED 21/08/2007. SD/- T.R.RAMACHANDRAN NAIR, JUDGE. APPENDIX PETITIONER'S EXHIBITS : EXT.P.1: COPY OF THE AWARD NO. 209/99, DT. 23/08/99. EXT.P.2: COPY OF THE COMMUNICATION ISSUED BY THE R.2. TO THE R.3. DT. 09/06/1999. RESPONDENT'S EXHIBITS: NIL. //TRUE COPY// prv. T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - O.P.NO.22934 OF 1999-E - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 21st day of August, 2007 JUDGMENT The original petition is filed challenging the vires of Section 194-L of the Income-tax Act and Ext.P2 communication. The short facts are: 2. Pursuant to the land acquisition proceedings, Ext.P1 notice of award was issued on 23.8.1999. The total compensation is Rs.2,14,311/-, out of which an amount of Rs.1,41,000/- has been paid on 14.1.1999 and the balance due is Rs.73,311/-. After coming into force of Section 194-L with effect from 1.6.1999, Ext.P2 notice was issued by the Income Tax Officer (TDS) Division III, Kochi to the Special Tahsildar (LA), Kakkanadu. 2. Learned Standing Counsel appearing for the Revenue points out that as far as the applicability of the particular provision is concerned, if the compensation payable is below Rupees One Lakh, there is no tax liability and therefore tax could not be deducted. Further, the said provision is having effect from 1.6.1999 and therefore the balance as per Ext.P1 is only Rs.73,311/-. Therefore, going by the state of affairs as reflected above, there cannot be any application of Section 194-L in this case. It is also OP 22934/1999 - 2 - submitted that the validity of the provision has been upheld by this court in O.P. No.28719/1999 as per judgment dated 26.7.2005. Therefore, the original petition is disposed of in the following terms: The direction sought to the third respondent not to deduct any tax is granted. If the third respondent has already deducted and paid it to the Revenue, it will be open to the petitioner to file a return and claim refund of the same. The challenge against the vires of Section 194-L fails in the light of the judgment of this court in O.P.No.28719/1999. (T.R. Ramachandran Nair, Judge.) kav/ T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - O.P. No.22934 of 1999-E - - - - - - - - - - - - - - - - - - - - - - JUDGMENT 21th August, 2007. "