High Court Of Kerala
Kottappalakkudath Khadeeja vs. Special Tahsildar
Sections 194L
R. Rajendra Babu, J.
Writ Petn. No. 29199 of 2003
24th November, 2003
Counsel Appeared
Smt. T.D. Rajalakshmi & E.R. Venkateswaran, for the Petitioner : George K. George & Smt. M.J. Rajasree, for the Respondent
JUDGMENT
R. RAJENDRA BABU, J. :
Petitioner’s property was acquired and an award was passed on 24th Nov., 1999, fixing the compensation at Rs. 3,85,468. As per s. 194L of the IT Act, 10 per cent of the above compensation amount should have been withheld by the land acquisition authority towards income-tax and only the rest of the amount should have been disbursed. By inadvertence, the entire compensation amount had been disbursed to the petitioner. Thereafter, the Land Acquisition Officer issued Ext. P1 notice dt. 12th Aug., 2003 directing refund of 10 per cent of the amount and also surcharge on the above amount. The above notice issued by the Land Acquisition Officer is under challenge at the instance of the petitioner. Heard the learned counsel for the petitioner, the learned Government Pleader and the learned standing counsel for the IT Department. In view of s. 194L which was then in the statute, from 1st June, 1999, 10 per cent of the amount of compensation awarded by the Tribunal should have been withheld towards income-tax and the balance amount alone should have been disbursed to the party. Sec. 194L reads : “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 capital asset 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 per cent of such sum as income-tax on income comprised therein : Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year and does not exceed one hundred thousand rupees : Provided further that no deduction shall be made under this section from any payment made on or after the 1st day of June, 2000”.
In view of the above provision of law, the Land Acquisition Officer should have withheld 10 per cent of the compensation amount towards income-tax and the remaining amount alone should have been disbursed. But by oversight, the entire amount was disbursed. It was by an omission to take note of s. 194L of the IT Act. Later, on 12th Aug., 2003, Ext. P1 notice was issued demanding the return of 10 per cent of the compensation amount and surcharge. The main argument advanced by the learned counsel for the petitioner was that the Land Acquisition Officer had no authority to make a demand for the return of the amount and a notice can be issued only by the IT Department, even if any amount was payable to the IT Department.
4. Sec. 194L was in the IT Act for a period from 1st June, 1999 till 1st June, 2000. In view of the proviso added to s. 194L, no deduction need be made from the amount w.e.f. 1st June, 2000. Admittedly, no amount was withheld in pursuance to the above provision the entire amount was disbursed. When the notice was issued for return of the amount, in view of the proviso which has come into effect from 1st June, 2000, the amount need not be recovered also. In view of the above provision, I do not think that it would be competent for the Land Acquisition Officer to demand return of the amount already disbursed. But it would be the option of the IT Department to recover the amount towards income-tax or not. Hence, I think it just and proper to quash Ext. P1 notice reserving the right of the IT Department to proceed against the petitioner if they choose to do so. In the result Ext. P1 notice is set aside. The Land Acquisition authorities shall inform about the failure from their part to recover the amount to the IT Department and the IT Department shall be at liberty to proceed against the petitioner in accordance with law, if they choose to do so.
[Citation : 271 ITR 442]
