C/Sca/19270/2018 Order v. Income Tax Officer- Tds-1, Surat & Ors. In Special Civil Application

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 19270 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19374 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19376 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19377 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19378 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19380 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19381 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19382 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19384 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19385 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19386 of 2018With R/SPECIAL CIVIL APPLICATION NO. 19388 of 2018 ========================================================== JOSHI RAJENDRAKUMAR MOTIBHAI VersusSTATE OF GUJARAT ========================================================== Appearance:MR VIJAY N RAVAL(2025) for the PETITIONER(s) No. 1,2MS NISHA THAKORE, ASST GOVERNMENT PLEADER/PP(99) for the RESPONDENT(s) No. 1DS AFF.NOT FILED (N)(11) for the RESPONDENT(s) No. 2 ========================================================== CORAM: HONOURABLE THE ACTING CHIEF JUSTICE ANANT S. DAVEandHONOURABLE MR.JUSTICE BIREN VAISHNAV Date : 20/12/2018 ORAL ORDER (PER : HONOURABLE THE ACTING CHIEF JUSTICE ANANT S. DAVE) 1.In this group of petitions, under Article 226 of the Constitution of India, the petitioners, who are the original owners and claimants of the subject land, have challenged the order passed by respondent No.1 deducting Tax At Source as per Section 194(A) of the Income Tax from compensation granted by respondent for acquisition of land in LAR Nos. 230, 235, 237, 238 and 241 of 2010, 608 to 625 of 2010, 9 & 10 of 2015, 435 to 449 of 2013, 3 of 2013, 634 of 2017 and 636 to 648 of 2017, 796 to 798 of 2009, 213 of 2013, 230 & 231 of 2013, 701 to 708 of 2009, 216 of 2013, 766 to 772 of 2009 for different purposes. 2.Since the prayer of the petitioners in all the petitions is the same, we reproduce prayer from Special Civil Application No. 19270 of 2018 hereinbelow, for the sake of convenience and brevity: “[A] This Hon'ble Court may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction declaring that the attempt to deduct the amount of TDS as per Annex-A statement qua awarded amount under Section 28 to be bad in law and be pleased to direct the respondents and their agents, servants, officers to deposit the amount of TDS so deducted from the amount of compensation deposited under Section 28 of the Land Acquisition Act, while depositing the amount of compensation forthwith before the reference Court for its onwards payment to the petitioners in connection with LAR Nos. 230, 235, 237, 238 and 241 of 2010, in the interest of justice.” 3.Upon issuance of notice, learned AGP appearing for the respondents fairly concedes that, as on the date, the decision rendered by a Division Bench of this Court vide oral judgment dated 31.03.2016 [paras 13 and 14] in the case of Movaliya Bhikhubhai Balabhai Vs. Income Tax Officer- TDS-1, Surat & Ors. in Special Civil Application No.17944 of 2015 remained as good law and holds the field and squarely applicable to the facts of the present case. 4.Having regard to the facts and circumstances of the case and submissions made by the learned advocate for the parties, we are of the opinion that the law laid down by Division Bench of this Court in the case of Movaliya Bhikhubhai Balabhai [supra] is squarely applicable to the facts of the present case. In paras 13 and 14 of the above decision, this Court held as under: 4.Having regard to the facts and circumstances of the case and submissions made by the learned advocate for the parties, we are of the opinion that the law laid down by Division Bench of this Court in the case of Movaliya Bhikhubhai Balabhai [supra] is squarely applicable to the facts of the present case. In paras 13 and 14 of the above decision, this Court held as under: “13 The upshot of the above discussion is that since interest under section 28 of the Act of 1894, partakes the character of compensation, it does not fall within the ambit of the expression interest as contemplated in section 145A of the I.T. Act. The first respondent - Income Tax Officer was, therefore, not justified in refusing to grant a certificate under section 197 of the I.T. Act to the petitioner for non-deduction of tax at source, inasmuch as, the petitioner is not liable to pay any tax under the head income from other sources on the interest paid to it under section 28 of the Act of 1894. 14 The petitioner had earlier challenged the communication dated 9th February, 2015 whereby its application for a certificate under section 197 of the I.T. Act had been rejected, and subsequently, tax on the interest payable under section 28 of the Act of 1894 has already been deducted at source. Consequently, the challenge to the above communication has become infructuous and hence, the prayer clause came to be modified. However, since the amount paid under section 28 of the Act of 1894 forms part of the compensation and not interest, the second respondent was not justified in deducting tax at source under section 194A of the I.T. Act in respect of such amount. The petitioner is, therefore, entitled to refund of the amount wrongly deducted under section 194A of the I.T. Act.” 5.In view of the above, we have no hesitation in issuing direction to the respondents not to deduct TDS from the compensation amount awarded under Section 28 of The Land Acquisition Act, 1894 by the reference court with regard to subject award pertaining to LAR Nos. 230, 235, 237, 238 and 241 of 2010, 608 to 625 of 2010, 9 & 10 of 2015, 435 to 449 of 2013, 3 of 2013, 634 of 2017 and 636 to 648 of 2017, 796 to 798 of 2009, 213 of 2013, 230 & 231 of 2013, 701 to 708 of 2009, 216 of 2013, 766 to 772 of 2009 and the amount of TDS which is already deducted shall be paid to the petitioners within a period of six weeks from the date of receipt of the order of this Court. Order accordingly. These petitions are allowed to the aforesaid extent. (ANANT S. DAVE, ACJ) DIVYA (BIREN VAISHNAV, J)