LAND ACQUISITION OFFICER, URBAN ESTATE V. ASSISTANT COMMISSIONER OF INCOME TAX, TDS CIRCLE

CWP/14794/2016

AI Insights

The case involves the Land Acquisition Officer, Urban Estate, Panchkula, challenging the imposition of a huge liability of Rs.1,28,19,35,845 under Section 201(1) of the Income Tax Act, 1961, for not deducting TDS on interest payments of enhanced compensation. The petitioner argued that the non-deduction was based on legal advice and court orders that restrained TDS deduction. The Revenue contended that the petitioner was required to deduct TDS as per the amended provisions of the Income Tax Act. The court found that the petitioner acted in good faith based on legal advice and court orders, and thus, the penalty was unjustified.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 749555 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 09-08-2024
• Assessment Year: misc
• Other Referred Cases: Jagmal Singh and another vs. State of Haryana and another, CIT vs. Ghanshyam (HUF), Sh. Satpal & others Vs. St. of Haryana, HUDAvs Mandir Nar Singh Puri & others, Attar Singh vs. State of Haryana, Bikram Singh and others vs. Land Acquisition Collector and others
• Laws Referred To: Income Tax Act, 1961, Land Acquisition Act, 1894
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: URVASHI DHUGGA
• Assessee Lawyers: RADHIKA SURI; ABHINAV NARANG
• Keywords: Enhanced compensation; Income Tax Liability; Interest on compensation; Land Acquisition; Legal Opinion; TDS
• Section: 194A; 28; 201(1); 194LA; 201(1A); 56(2)(viii); 45(5)(b)

Judgement Text

"CWP-14794-2016 201 (2 cases) IN THE HIGH COURT OF PUNJAB AND HARYANA AT 1. THE LAND ACQUISITION OFFICER, URBAN THE ASSISTANT COMMISSIONER OF INCOME TAX, TDS CIRCLE 2. THE LAND ACQUISITION OFFICER, URBAN ESTATE THE ASSISTANT CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE Present: Ms. Radhika Suri, Sr. Advocate with Mr. Abhinav Narang, Advocate Ms. Parnika Singla, for the petitioner(s). Mr for the respondent/Revenue. SANJEEV PRAKASH SHARMA, J. 1. Present writ petition has been preferred by the Land Acquisition Officer, Urban Estate, Panchkula, office of the Government of Haryana challenging the imposition of huge liability of an amount of Rs.1,28,19,35,845/ 2016 (O&M) and connected case Page 1 of 9 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH LAND ACQUISITION OFFICER, URBAN Vs. ASSISTANT COMMISSIONER OF INCOME TAX, TDS CIRCLE **** LAND ACQUISITION OFFICER, URBAN ESTATE Vs. ASSISTANT COMMISSIONER OF INCOME TAX, TDS CIRCLE **** HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH Ms. Radhika Suri, Sr. Advocate with Mr. Abhinav Narang, Advocate Ms. Parnika Singla, Advocate for the petitioner(s). Mrs. Urvashi Dhugga, Sr. Standing Counsel for the respondent/Revenue. **** SANJEEV PRAKASH SHARMA, J. Present writ petition has been preferred by the Land Acquisition Officer, Urban Estate, Panchkula, office of the Government of Haryana challenging the imposition of huge liability of an amount of Rs.1,28,19,35,845/- under Section 201(1) of the Income Tax A IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Reserved on: 01.08.2024 Date of Decision: 09.08.2024 CWP-14794-2016 (O&M) LAND ACQUISITION OFFICER, URBAN ESTATE . . . . Petitioner ASSISTANT COMMISSIONER OF INCOME TAX, TDS CIRCLE . . . . Respondent CWP-14811-2016 (O&M) LAND ACQUISITION OFFICER, URBAN ESTATE . . . . Petitioner COMMISSIONER OF INCOME TAX, TDS CIRCLE . . . . Respondent HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA SANJAY VASHISTH Ms. Radhika Suri, Sr. Advocate with Sr. Standing Counsel Present writ petition has been preferred by the Land Acquisition Officer, Urban Estate, Panchkula, office of the Government of Haryana challenging the imposition of huge liability of an amount of under Section 201(1) of the Income Tax Act, 1961 Reserved on: 01.08.2024 2024 (O&M) Petitioner . . . . Respondent (O&M) Petitioner . . . . Respondent Present writ petition has been preferred by the Land Acquisition Officer, Urban Estate, Panchkula, office of the Government of Haryana challenging the imposition of huge liability of an amount of ct, 1961 MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 (hereinafter referred as Acquisition Officer (hereinafter referred as ‘LAO’) deduct the tax at source under Section 28 of the Land Acquisition Act, 1894’). 2. Brief facts are that the petitioner was conducting the duty of disbursement of compensation, enhanced compensation and interest on the compensation in lieu of acquisition of lan of the Act agricultural land is exempt of Section 194LA disbursing the enhanced compensation and interest on enhanced compensation by deducting tax at source in terms of Section 194A of the Act, 1961. 3. In the case of Court while interp 1961 held that the interest on enhanced compensation paid under Section 28 of Act, 1894 is part of the compensation liable for accretion to capital Jagmal Singh and another vs. State of Haryana and another in CR No. 7740 of 2012 TDS was compensation 2016 (O&M) and connected case Page 2 of 9 hereinafter referred as ‘Act, 1961’) Acquisition Officer (hereinafter referred as ‘LAO’) deduct the tax at source upon interest on enhanced compensation paid under Section 28 of the Land Acquisition Act, ’). Brief facts are that the petitioner was conducting the duty of disbursement of compensation, enhanced compensation and interest on the compensation in lieu of acquisition of lan of the Act, 1894. The compensation received for acquisition of agricultural land is exempted from deduction of tax at source in terms of Section 194LA of the Act, 1961. disbursing the enhanced compensation and interest on enhanced compensation by deducting tax at source in terms of Section 194A of the Act, 1961. In the case of CIT vs. Ghanshyam (HUF Court while interpreting the provisions of Section 45(5)(b) of Act, 1961 held that the interest on enhanced compensation paid under Section 28 of Act, 1894 is part of the compensation for deduction of tax at source as the same accretion to capital. The High Court also passed orders in the case of Jagmal Singh and another vs. State of Haryana and another in CR No. 7740 of 2012 restraining petitioners from deducting TDS. TDS was not being deducted upon interest disbursed on enhanced compensation in view of various judgments passed by the High Court, ’) on the ground that the Land Acquisition Officer (hereinafter referred as ‘LAO’) had failed to on interest on enhanced compensation paid under Section 28 of the Land Acquisition Act, 1894 (for short ‘the Act, Brief facts are that the petitioner was conducting the duty of disbursement of compensation, enhanced compensation and interest on the compensation in lieu of acquisition of land in terms of Section 28 e compensation received for acquisition of from deduction of tax at source in terms of the Act, 1961. Till 2012, the petitioner was disbursing the enhanced compensation and interest on enhanced compensation by deducting tax at source in terms of Section 194A of HUF) 315 ITR 1, the Supreme reting the provisions of Section 45(5)(b) of Act, 1961 held that the interest on enhanced compensation paid under Section 28 of Act, 1894 is part of the compensation and therefore, not deduction of tax at source as the same would be held to be an The High Court also passed orders in the case of Jagmal Singh and another vs. State of Haryana and another in CR No. from deducting TDS. Accordingly, on interest disbursed on enhanced judgments passed by the High Court, on the ground that the Land had failed to on interest on enhanced compensation paid , Brief facts are that the petitioner was conducting the duty of disbursement of compensation, enhanced compensation and interest on terms of Section 28 e compensation received for acquisition of from deduction of tax at source in terms Till 2012, the petitioner was disbursing the enhanced compensation and interest on enhanced compensation by deducting tax at source in terms of Section 194A of , the Supreme reting the provisions of Section 45(5)(b) of Act, 1961 held that the interest on enhanced compensation paid under not be held to be an The High Court also passed orders in the case of Jagmal Singh and another vs. State of Haryana and another in CR No. Accordingly, on interest disbursed on enhanced judgments passed by the High Court, MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 and therefore view of the High Court’s order. 4. A survey under Section 133A of the Act, 1961 was 16.03.2015 and the income tax authorities raised queries with regard to non-deduction of tax at source on the payments of interest on compensation/enhanced compensation. Judgments and orders passed by the High Court were therefore respondent/department whereafter a questionnaire was put to the petitioner with regard to deduction of tax at source. It was queried that income by way of interest received on compensation/enhanced compensation would form part of the income from terms of Section 56(2)(viii) of Act, 1961 and therefore required to be deducted and deposited, to which it was answered by the petitioner payment of interest on compensation/enhanced compensation u/s 194A. But various landholder whose land was acquired started filing legal cases with various courts including Hon'ble High Court for refund of TDS deducted from that payment i.e. interest payments. As per instruction from Sh. M.S. Sangwan, DRO vide order dated 09.10.2012 on the noting sheet (copy of it being provided), I was directed \"As per opinion of ADA (P), therefore, TDS may not be deducted\". Th ADS (P) opinion as well as various court decisions on section 28 of the Land Acquisition Act, 1894 wherein it has been held in one of the cases CIT Vs Ghanshyam (HUF) that interest u/s 28 of the Land Acquisition Act, 1894, unlik 2016 (O&M) and connected case Page 3 of 9 and therefore, after October, 2012, the LAO stopped deducting TDS in view of the High Court’s order. A survey under Section 133A of the Act, 1961 was 16.03.2015 and the income tax authorities raised queries with regard to deduction of tax at source on the payments of interest on compensation/enhanced compensation. Judgments and orders passed by the High Court were therefore respondent/department whereafter a questionnaire was put to the petitioner with regard to deduction of tax at source. It was queried that income by way of interest received on compensation/enhanced compensation would form part of the income from terms of Section 56(2)(viii) of Act, 1961 and therefore required to be deducted and deposited, to which it was answered by the petitioner as under: “\"We were deducting TDS upto September, 2012 on payment of interest on compensation/enhanced compensation u/s 194A. But various landholder whose land was acquired started filing legal cases with various courts including Hon'ble High Court for refund of TDS deducted from that payment i.e. interest payments. As per instruction from Sh. M.S. Sangwan, DRO vide order dated 09.10.2012 on the noting sheet (copy of it being provided), I was directed \"As per opinion of ADA (P), therefore, TDS may not be deducted\". This view of DRO was based on ADS (P) opinion as well as various court decisions on section 28 of the Land Acquisition Act, 1894 wherein it has been held in one of the cases CIT Vs Ghanshyam (HUF) that interest u/s 28 of the Land Acquisition Act, 1894, unlike interest u/s 34 is an accretion to the value, hence, it after October, 2012, the LAO stopped deducting TDS in A survey under Section 133A of the Act, 1961 was conducted on 16.03.2015 and the income tax authorities raised queries with regard to deduction of tax at source on the payments of interest on compensation/enhanced compensation. Judgments and orders passed by the High Court were therefore, made available to the respondent/department whereafter a questionnaire was put to the petitioner with regard to deduction of tax at source. It was queried that income by way of interest received on compensation/enhanced compensation would form part of the income from other sources in terms of Section 56(2)(viii) of Act, 1961 and therefore, TDS was required to be deducted and deposited, to which it was answered by the \"We were deducting TDS upto September, 2012 on payment of interest on compensation/enhanced compensation u/s 194A. But various landholder whose land was acquired started filing legal cases with various courts including Hon'ble High Court for refund of TDS deducted from that payment i.e. interest payments. As per instruction from Sh. M.S. Sangwan, DRO vide order dated 09.10.2012 on the noting sheet (copy of it being provided), I was directed \"As per opinion of ADA (P), therefore, TDS is view of DRO was based on ADS (P) opinion as well as various court decisions on section 28 of the Land Acquisition Act, 1894 wherein it has been held in one of the cases CIT Vs Ghanshyam (HUF) that interest u/s 28 of the Land Acquisition Act, 1894, e interest u/s 34 is an accretion to the value, hence, it after October, 2012, the LAO stopped deducting TDS in conducted on 16.03.2015 and the income tax authorities raised queries with regard to deduction of tax at source on the payments of interest on compensation/enhanced compensation. Judgments and orders passed ble to the respondent/department whereafter a questionnaire was put to the petitioner with regard to deduction of tax at source. It was queried that income by way of interest received on compensation/enhanced other sources in TDS was required to be deducted and deposited, to which it was answered by the MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 is a part of enhanced compensation or consideration. Copy of order is given to you. Haryana, ADJ, Faridabad, has held that Joint Defendant (JD compensation amount and JD's (LAO) are directed to pay the same to the landowner i.e. refund the TDS vide order dated 20.09.2014. This decision has been relied on HUDA v/s Mandir Nar Singh Puri & others.\" 5. Learned counsel for the petitioner submits that the petitioner was in bona fide of the legal opinion of the Additional District Attorney. Show cause notice was served upon the petitioner for default, and assessment was finalized on 22.03.2016 treating the petitioner as assessee in default under Section Act, 1961. Separately, a notice under Section also issued directin Rs.1,28,19,35,845/ petition. 6. Learned counsel for the petitioner submits that the petitioner cannot be penalized for failure of TDS. It has been vehemently argued th TDS was deductible on the interest of enhanced compensation for the relevant period. Further, it is stated that the Income Tax filed review applications High Court restraining from deducting TDS enhanced compensation 02.02.2016. 2016 (O&M) and connected case Page 4 of 9 is a part of enhanced compensation or consideration. Copy of order is given to you. Further, in the case of Sh. Satpal & others Vs. St. of Haryana, ADJ, Faridabad, has held that Joint Defendant (JDA) have illegally deducted Income Tax(TDS) out of compensation amount and JD's (LAO) are directed to pay the same to the landowner i.e. refund the TDS vide order dated 20.09.2014. This decision has been relied on HUDA v/s Mandir Nar Singh Puri & others.\" Learned counsel for the petitioner submits that the petitioner was in bona fide belief that there is no liability to deduct tax at source in view of the legal opinion of the Additional District Attorney. Show cause notice was served upon the petitioner for , and assessment was finalized on 22.03.2016 treating the petitioner as assessee in default under Section Act, 1961. Separately, a notice under Section also issued directing the petitioner to deposit a sum of Rs.1,28,19,35,845/-. The petitioner has therefore petition. Learned counsel for the petitioner submits that the petitioner cannot be penalized for failure of TDS. It has been vehemently argued th TDS was deductible on the interest of enhanced compensation for the relevant period. Further, it is stated that the Income Tax filed review applications seeking review of the orders passed by the High Court restraining from deducting TDS enhanced compensation, and the same were subsequently decided on 02.02.2016. is a part of enhanced compensation or consideration. Copy Further, in the case of Sh. Satpal & others Vs. St. of Haryana, ADJ, Faridabad, has held that Joint Defendant A) have illegally deducted Income Tax(TDS) out of compensation amount and JD's (LAO) are directed to pay the same to the landowner i.e. refund the TDS vide order dated 20.09.2014. This decision has been relied on HUDA v/s Mandir Nar Singh Puri & others.\" Learned counsel for the petitioner submits that the petitioner was in belief that there is no liability to deduct tax at source in view of the legal opinion of the Additional District Attorney. Show cause notice was served upon the petitioner for treating him as assessee in , and assessment was finalized on 22.03.2016 treating the petitioner as assessee in default under Section 201 and 201(1A) of the Act, 1961. Separately, a notice under Section 156 of the Act, 1961 was g the petitioner to deposit a sum of . The petitioner has therefore, preferred the present Learned counsel for the petitioner submits that the petitioner cannot be penalized for failure of TDS. It has been vehemently argued that no TDS was deductible on the interest of enhanced compensation for the relevant period. Further, it is stated that the Income Tax Department seeking review of the orders passed by the High Court restraining from deducting TDS on interest received on , and the same were subsequently decided on Learned counsel for the petitioner submits that the petitioner was in belief that there is no liability to deduct tax at source in view of the legal opinion of the Additional District Attorney. Show cause treating him as assessee in , and assessment was finalized on 22.03.2016 treating the and 201(1A) of the 156 of the Act, 1961 was g the petitioner to deposit a sum of preferred the present Learned counsel for the petitioner submits that the petitioner cannot be at no TDS was deductible on the interest of enhanced compensation for the epartment seeking review of the orders passed by the on interest received on , and the same were subsequently decided on MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 7. Learned counsel therefore submits that the petitioner cannot be penalized, and the order Assessment Year 2015 Rs.1,28,19,35,845/ 8. On the other hand, learned counsel appearing for the Department/Assistant Commissioner of Income Tax, TDS Circle has vehemently argued, and has also submitted written arguments in support behalf of HUDA (Haryana Urb debarred from withholding tax fro compulsorily acquired. It is further submitted that the HUDA was required to contact the Income Tax department as amendments were made in the Act in 2002. 9. Learned counsel for the Revenue also submits that the Income Tax Department was not a party to the case of State of Haryana and another i Court, wherein the interim order was passed. It was further argued that review petition was filed in the year 2014 seeking review of the High Court’s order by the respondent, and at the same time, and Office huge deposits of money without corresponding TDS reflecting in their accounts. 10. Learned counsel for the Revenue also relies in Attar Singh No.10125 of 2015, 2016 (O&M) and connected case Page 5 of 9 Learned counsel therefore submits that the petitioner cannot be penalized, and the order dated 22.03.2016 Assessment Year 2015-16 imposing huge liability of Rs.1,28,19,35,845/- was unjustified. On the other hand, learned counsel appearing for the Department/Assistant Commissioner of Income Tax, TDS Circle has vehemently argued, and has also submitted written arguments in support of the order impugned. It is stated that the LAO working on behalf of HUDA (Haryana Urban Development Authority) was debarred from withholding tax from all the assesses whose land was compulsorily acquired. It is further submitted that the HUDA was required to contact the Income Tax department as amendments were made in the Act in 2002. Learned counsel for the Revenue also submits that the Income Tax epartment was not a party to the case of State of Haryana and another in CR No. 7740 of 2012 wherein the interim order was passed. It was further argued that review petition was filed in the year 2014 seeking review of the High Court’s order by the respondent, and at the same time, Officers working in the system came to know that the banks had huge deposits of money without corresponding TDS reflecting in their accounts. Learned counsel for the Revenue also relies Attar Singh and others vs. State of Haryana and others in CWP No.10125 of 2015, decided on 03.09.2015 Learned counsel therefore submits that the petitioner cannot be dated 22.03.2016 passed by the respondent for 16 imposing huge liability of On the other hand, learned counsel appearing for the Department/Assistant Commissioner of Income Tax, TDS Circle has vehemently argued, and has also submitted written arguments in . It is stated that the LAO working on an Development Authority) was m all the assesses whose land was compulsorily acquired. It is further submitted that the HUDA was required to contact the Income Tax department as amendments were Learned counsel for the Revenue also submits that the Income Tax epartment was not a party to the case of Jagmal Singh and another vs. n CR No. 7740 of 2012 in the High wherein the interim order was passed. It was further argued that review petition was filed in the year 2014 seeking review of the High Court’s order by the respondent, and at the same time, Field Officers came to know that the banks had huge deposits of money without corresponding TDS reflecting in their Learned counsel for the Revenue also relies upon the judgment passed and others vs. State of Haryana and others in CWP decided on 03.09.2015. Learned counsel therefore submits that the petitioner cannot be passed by the respondent for 16 imposing huge liability of On the other hand, learned counsel appearing for the Department/Assistant Commissioner of Income Tax, TDS Circle has vehemently argued, and has also submitted written arguments in . It is stated that the LAO working on an Development Authority) was m all the assesses whose land was compulsorily acquired. It is further submitted that the HUDA was required to contact the Income Tax department as amendments were Learned counsel for the Revenue also submits that the Income Tax Jagmal Singh and another vs. in the High wherein the interim order was passed. It was further argued that review petition was filed in the year 2014 seeking review of the High Field Officers came to know that the banks had huge deposits of money without corresponding TDS reflecting in their on the judgment passed and others vs. State of Haryana and others in CWP MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 11. Learned counsel relies relates to charge of income tax, and as per section 4(2), the income tax was required to be deduct the petitioner/LAO who was disbursing the compensation on behalf of HUDA was a terms of Section 4 read with section 2(31)(vi) of the Act. 12. Learned counsel su ITA No.209 of 2004, Karta Manjeet Singh vs. Union of India and others, CWP No.15506 of 2013 decided on 14.01.2014 compensation also as per section 2(28A) petitioner had wrongfully unilaterally decided to withhold tax and therefore 13. It was further submitted that the review applications of Jagmal Singh and another vs. State of Haryana and another in CR No. 7740 of 2012, Satbir Singh vs. State of Haryana No. 7736 of 2012 interest on additional award is taxable and income tax is liable to be deducted at the time of deposit. The order applications on 02.02.2016 and therefore, the petitioner was li pay interest under section 201(1A) of the Act. 14. Learned counsel for the Revenue relies Bikram Singh and others vs. Land Acquisition Collector and others, 1997 (10) SCC 243 2016 (O&M) and connected case Page 6 of 9 Learned counsel relies upon Section 4(1) of the Act, 1961 relates to charge of income tax, and as per section 4(2), the income tax was required to be deducted at source. Therefore, it is submitted that the petitioner/LAO who was disbursing the compensation on behalf of HUDA was a ‘person’ and was required to deduct tax at source in terms of Section 4 read with section 2(31)(vi) of the Act. Learned counsel submits that in the case of ITA No.209 of 2004, decided on 27.10.2010 Karta Manjeet Singh vs. Union of India and others, CWP No.15506 of decided on 14.01.2014, the High Court held that additional compensation and interest are liable to tax as per Section 45(5)(b) and also as per section 2(28A) which defines interest. petitioner had wrongfully unilaterally decided to withhold tax and therefore, was liable to penalty under section 201 of th It was further submitted that the review applications Jagmal Singh and another vs. State of Haryana and another in CR No. 7740 of 2012, Satbir Singh vs. State of Haryana No. 7736 of 2012 were allowed and the order was recalled holding that interest on additional award is taxable and income tax is liable to be deducted at the time of deposit. The order applications on 02.02.2016 and therefore, the petitioner was li pay interest under section 201(1A) of the Act. Learned counsel for the Revenue relies Bikram Singh and others vs. Land Acquisition Collector and others, 10) SCC 243, CIT vs. Bir Singh on Section 4(1) of the Act, 1961, which relates to charge of income tax, and as per section 4(2), the income tax ed at source. Therefore, it is submitted that the petitioner/LAO who was disbursing the compensation on behalf of and was required to deduct tax at source in terms of Section 4 read with section 2(31)(vi) of the Act. bmits that in the case of CIT vs. Bir Singh (HUF), decided on 27.10.2010, Manjet Singh (HUF) Karta Manjeet Singh vs. Union of India and others, CWP No.15506 of the High Court held that additional and interest are liable to tax as per Section 45(5)(b) and which defines interest. It is stated that the petitioner had wrongfully unilaterally decided to withhold tax and was liable to penalty under section 201 of the Act. It was further submitted that the review applications filed in the cases Jagmal Singh and another vs. State of Haryana and another in CR No. 7740 of 2012, Satbir Singh vs. State of Haryana and another in CR were allowed and the order was recalled holding that interest on additional award is taxable and income tax is liable to be deducted at the time of deposit. The order has been passed in review applications on 02.02.2016 and therefore, the petitioner was liable to pay interest under section 201(1A) of the Act. Learned counsel for the Revenue relies upon earlier judgment of Bikram Singh and others vs. Land Acquisition Collector and others, CIT vs. Bir Singh (supra), Manjet Singh (HUF) which relates to charge of income tax, and as per section 4(2), the income tax ed at source. Therefore, it is submitted that the petitioner/LAO who was disbursing the compensation on behalf of and was required to deduct tax at source in (HUF), Manjet Singh (HUF) Karta Manjeet Singh vs. Union of India and others, CWP No.15506 of the High Court held that additional and interest are liable to tax as per Section 45(5)(b) and It is stated that the petitioner had wrongfully unilaterally decided to withhold tax and s Jagmal Singh and another vs. State of Haryana and another in CR in CR were allowed and the order was recalled holding that interest on additional award is taxable and income tax is liable to be been passed in review able to on earlier judgment of Bikram Singh and others vs. Land Acquisition Collector and others, Manjet Singh (HUF) MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 Karta Manjeet Singh petition. 15. Actus Curiae Neminem Gravabit to the act of the Court. 16. The aforesaid maxim is the complete answer to the issue raised in the present petitions. It is an admitted position that on the day when the Land Acquisition Officer was disbursing the interest element on enhanced compensation to the concerned landowners been acquired, litigation had been taken up before the Court with regard to the action of the LAO in deducting TDS upon such interest upto September, 2012 under Section 194LA of the Act, 1961. 17. It is also an admitted position that various Court granted stay and also held that TDS is not required to be deducted from the interest payments. The LAO asked for a legal opinion and as per the instructions District Revenue Officer on the not per the opinion of the ADA(P) i.e. Additional District Attorney, TDS may not be deducted before the Income Tax Authorities. In terms of directions issued by the superior offi 18. In the case of District Judge, Faridabad held that the deduction of TDS was illegal and the LAO was directed to pay the same to the landowners vide order dated 20.09.2014. Singh Puri & others, 2016 (O&M) and connected case Page 7 of 9 Karta Manjeet Singh (supra), and prays for dismissal of the writ petition. Actus Curiae Neminem Gravabit, namely, no party should suffer due to the act of the Court. The aforesaid maxim is the complete answer to the issue raised in the present petitions. It is an admitted position that on the day when the Land Acquisition Officer was disbursing the interest element on enhanced compensation to the concerned landowners been acquired, litigation had been taken up before the Court with regard to the action of the LAO in deducting TDS upon such interest upto September, 2012 under Section 194LA of the Act, 1961. It is also an admitted position that various Court granted stay and also held that TDS is not required to be deducted from the interest payments. The LAO asked for a legal opinion and as per the instructions dated 09.10.2012 District Revenue Officer on the noting sheet, he was directed that “ per the opinion of the ADA(P) i.e. Additional District Attorney, TDS may not be deducted”. The document was produced by the petitioner before the Income Tax Authorities. In terms of directions issued by the superior officer, the deductions were therefore not made. In the case of Sh. Satpal & others Vs. St. of Haryana, District Judge, Faridabad held that the deduction of TDS was illegal and the LAO was directed to pay the same to the landowners vide order dated 20.09.2014. In another case of Singh Puri & others, C.R. No. 7953 of 2013 , and prays for dismissal of the writ , namely, no party should suffer due The aforesaid maxim is the complete answer to the issue raised in the present petitions. It is an admitted position that on the day when the Land Acquisition Officer was disbursing the interest element on enhanced compensation to the concerned landowners whose lands have been acquired, litigation had been taken up before the Court with regard to the action of the LAO in deducting TDS upon such interest upto September, 2012 under Section 194LA of the Act, 1961. It is also an admitted position that various Courts including this High Court granted stay and also held that TDS is not required to be deducted from the interest payments. The LAO asked for a legal dated 09.10.2012 issued by the ing sheet, he was directed that “as per the opinion of the ADA(P) i.e. Additional District Attorney, TDS The document was produced by the petitioner before the Income Tax Authorities. In terms of directions issued by the cer, the deductions were therefore not made. Sh. Satpal & others Vs. St. of Haryana, Additional District Judge, Faridabad held that the deduction of TDS was illegal and the LAO was directed to pay the same to the landowners vide In another case of HUDA v/s Mandir Nar C.R. No. 7953 of 2013, decided on 21.12.2013, , and prays for dismissal of the writ , namely, no party should suffer due The aforesaid maxim is the complete answer to the issue raised in the present petitions. It is an admitted position that on the day when the Land Acquisition Officer was disbursing the interest element on s have been acquired, litigation had been taken up before the Court with regard to the action of the LAO in deducting TDS upon such interest Courts including this High Court granted stay and also held that TDS is not required to be deducted from the interest payments. The LAO asked for a legal issued by the as per the opinion of the ADA(P) i.e. Additional District Attorney, TDS The document was produced by the petitioner before the Income Tax Authorities. In terms of directions issued by the Additional District Judge, Faridabad held that the deduction of TDS was illegal and the LAO was directed to pay the same to the landowners vide HUDA v/s Mandir Nar ded on 21.12.2013, MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 the High Court passed orders of restraining from deduction of TDS. Thus, it is apparent that the TDS deductions were not made based on orders of the Court Court were later on reviewed at Department. 19. Learned counsel for the Revenue has attempted to submit were other judgments of the High Court wherein a different view had been taken holding that TDS can be deducted (as referred supra). However, the time of enquiry submitted the reasons for non noticed by this Court hereinabove. Therefore, it cannot be said that the LAO was at fault. He was genuinely following the advice by his superior officer who was a District Revenue Officer, whose directions of not deducting TDS were based on legal advice. The legal advice was given on the basis of the directions of this Court. While this Court may have passed order which other orders passed by the High Court, it was not available for the LAO to ignore or flout the Court’s orders, which are to be presumed to be correct till they are set aside in appeal. Thus, no fault can be attributed on th 20. In the absence of there being based on judgment of the High Court that TDS was not required to be deducted on the interest paid, the action of the LAO cannot be said to be wrongful or i without deducting TDS therefore 2016 (O&M) and connected case Page 8 of 9 the High Court passed orders of restraining from deduction of TDS. Thus, it is apparent that the TDS deductions were not made based on orders of the Court. It is also noticed that orders passed by the High Court were later on reviewed at the instance of the Income Tax Department. Learned counsel for the Revenue has attempted to submit were other judgments of the High Court wherein a different view had been taken holding that TDS can be deducted (as referred supra). However, she does not deny that the LAO and his department had at the time of enquiry submitted the reasons for non noticed by this Court hereinabove. Therefore, it cannot be said that the LAO was at fault. He was genuinely following the advice by his superior officer who was a District Revenue Officer, whose directions of not deducting TDS were based on legal advice. The legal advice was given on the basis of the directions of this Court. While this Court may have passed order which was not in conformity with some other orders passed by the High Court, it was not available for the LAO to ignore or flout the Court’s orders, which are to be presumed to be correct till they are set aside in appeal. Thus, no fault can be attributed on the LAO or on his officials. In the absence of there being any fault and there being a genuine belief based on judgment of the High Court that TDS was not required to be deducted on the interest paid, the action of the LAO cannot be said to be wrongful or illegal. The action of releasing the interest amount without deducting TDS therefore, cannot be a reason for imposing the High Court passed orders of restraining from deduction of TDS. Thus, it is apparent that the TDS deductions were not made based on It is also noticed that orders passed by the High the instance of the Income Tax Learned counsel for the Revenue has attempted to submit that there were other judgments of the High Court wherein a different view had been taken holding that TDS can be deducted (as referred supra). she does not deny that the LAO and his department had at the time of enquiry submitted the reasons for non-deduction of TDS as noticed by this Court hereinabove. Therefore, it cannot be said that the LAO was at fault. He was genuinely following the advice given to him by his superior officer who was a District Revenue Officer, whose directions of not deducting TDS were based on legal advice. The legal advice was given on the basis of the directions of this Court. While this was not in conformity with some other orders passed by the High Court, it was not available for the LAO to ignore or flout the Court’s orders, which are to be presumed to be correct till they are set aside in appeal. Thus, no fault can be his officials. fault and there being a genuine belief based on judgment of the High Court that TDS was not required to be deducted on the interest paid, the action of the LAO cannot be said to The action of releasing the interest amount cannot be a reason for imposing the High Court passed orders of restraining from deduction of TDS. Thus, it is apparent that the TDS deductions were not made based on It is also noticed that orders passed by the High the instance of the Income Tax that there were other judgments of the High Court wherein a different view had been taken holding that TDS can be deducted (as referred supra). she does not deny that the LAO and his department had at deduction of TDS as noticed by this Court hereinabove. Therefore, it cannot be said that the given to him by his superior officer who was a District Revenue Officer, whose directions of not deducting TDS were based on legal advice. The legal advice was given on the basis of the directions of this Court. While this was not in conformity with some other orders passed by the High Court, it was not available for the LAO to ignore or flout the Court’s orders, which are to be presumed to be correct till they are set aside in appeal. Thus, no fault can be fault and there being a genuine belief based on judgment of the High Court that TDS was not required to be deducted on the interest paid, the action of the LAO cannot be said to The action of releasing the interest amount cannot be a reason for imposing MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document CWP-14794-2016 penalty in terms of cannot be justified. 21. The Land Acquisition Officer cannot be made to suffer on account of the orders passed by the Court. Penalty imposed on him by the Assistant Commissioner of Income Tax, TDS Circle vide its order dated 22.03.2016 22. Accordingly, 22.03.2016 (Annexure P (Annexure P Commissioner of Income Tax, TDS Circle are quashed and set aside. If any amount petitioner along with interest @6% per annum. 23. No costs. 24. All pending applications also stand disposed of accordingly. August 09, 2024 Mohit goyal 1. Whether speaking/reasoned? 2. Whether reportable? 2016 (O&M) and connected case Page 9 of 9 penalty in terms of Section 201 and 201(1A) of the Act, 1961 and cannot be justified. The Land Acquisition Officer cannot be made to suffer on account of the orders passed by the Court. Penalty imposed on him by the Assistant Commissioner of Income Tax, TDS Circle vide its order dated 22.03.2016 and 31.03.2016 are liable to be set aside. Accordingly, these writ petitions are 22.03.2016 (Annexure P-5 in CWP (Annexure P-5 in CWP-14811-2016 Commissioner of Income Tax, TDS Circle are quashed and set aside. If any amount has been deposited, the same shall be refunded to the petitioner along with interest @6% per annum. No costs. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA 2024 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No and 201(1A) of the Act, 1961 and The Land Acquisition Officer cannot be made to suffer on account of the orders passed by the Court. Penalty imposed on him by the Assistant Commissioner of Income Tax, TDS Circle vide its orders liable to be set aside. these writ petitions are allowed. The orders dated CWP-14794-2016) and 31.03.2016 2016) passed by Assistant Commissioner of Income Tax, TDS Circle are quashed and set aside. If has been deposited, the same shall be refunded to the petitioner along with interest @6% per annum. All pending applications also stand disposed of accordingly. SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE Yes/No Yes/No and 201(1A) of the Act, 1961 and The Land Acquisition Officer cannot be made to suffer on account of the orders passed by the Court. Penalty imposed on him by the s . The orders dated ) and 31.03.2016 passed by Assistant Commissioner of Income Tax, TDS Circle are quashed and set aside. If has been deposited, the same shall be refunded to the MOHIT GOYAL 2024.08.12 11:22 I attest to the accuracy and integrity of this document "