Wp/19197/2024 Of Smt C M Uma v. The Chief Commissioner Of Income Tax

Digitally signed byLEELAVATHI S RLocation: HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8 DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR -WRIT PETITION NO. 19197 OF 2024 (TIT) BETWEEN: SMT. C M UMA, W/O LATE CHIDANANDA, AGED ABOUT 60 YEARS, R/AT SIDDALINGESHWARA NILAYA, ADHARSHANAGARA, TUMKUR 572103. …PETITIONER (BY SRI. SRINIVASA MURTHY S R.,ADVOCATE) AND: THE CHIEF COMMISSIONER OF INCOME TAX, QUEENS ROAD, BENGALURU 560001. …RESPONDENT (BY SRI.SUSHAL TIWARI.,ADVOCATE AND SRI. E.I SANMATHI., ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TOQUASHING ANNEXURE-C PASSED BY THE RESPONDENT FOR THE ASSESSMENT YEAR 2022-23 DTD 28.06.24 PASSED IN ORDER NO. DIN AND ORDER NO. ITBA/COM/F/17/2024-25/1066191693(1) PAN NO. AATPU 5290K ANDISSUE A WRIT OF MANDAMUS TO THE RESPONDENT, PERMITTING THE PETITIONER TO FILE INCOME TAX RETURNS BY CONDONING THE DELAY UNDER SECTION 119(2) (B) OF INCOME TAX ACT, BY SETTING ASIDE THE ANNEXURE-C. THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: R CORAM:HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER This petition takes exception to the impugned order at Annexure-C passed by the respondent – Chief Commissioner of Income Tax, whereby the application filed by the petitioner under Section 119 (2)(b) of the Income Tax Act, 1961 (for short ‘the I.T.Act’) seeking condonation of delay to file income tax returns of her husband late Sri.T.S.Chidananda for the Assessment year 2022-23 was rejected by the respondent. 2. The brief facts giving rise to the present petition are as under:- The petitioner is the wife of late Sri.T.S.Chidananda, who was an income tax assessee whose lands were acquired by the National Highway Authorities during the financial year 2021-22 and the said Chidananda was supposed to file his income tax returns for the assessment year 2022-23.The said Chidananda –assessee did not file his Income tax returns and expired on 14.08.2022. Subsequent to which, the petitioner submitted an application on 23.03.2023 under Section 119(2)(b) of the I.T Act seeking condonation of delay in filing the I.T returns for the assessment - 3 - NC: 2024:KHC:31644 year 2022-23 as the legal heir of her husband. Petitioner contended that her husband had received a sum of Rs.1,26,71,726/- from the SLAO – NHAI as compensation towards acquisition and a sum of Rs.12,67,173/- had been deducted by way of TDS towards income tax. It was contended that the said deduction was illegal and contrary to Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short ‘the RFCTLARR Act) and that the delay in filing the I.T Returns by her husband was due to bonafide reasons, unavoidable circumstances and sufficient cause and as such, her aforesaid application for condonation of delay deserves to be allowed and the I.T return deserves to be accepted from exempting payment of Income tax on the aforesaid compensation. 2.1 In the first instance, the respondent herein passed an order dated 16.01.2024 rejecting the application filed by the petitioner to approach this Court in W.P.No.3447/2024. By final order dated 12.03.2024, this Court set aside the said order dated 16.01.2024 passed by the respondent and remitted the matter back to the respondent for reconsideration afresh in accordance with law by holding as under:- In this petition, petitioner seeks quashing of the impugned order at Annexure-A dated 16.01.2024 passed by the 2[nd] respondent whereby the application filed by the petitioner under Section 119(2)(b) of the Income Tax Act, 1961 was rejected. 2. Heard the learned counsel for the petitioner and the respondents. 2.1 In the first instance, the respondent herein passed an order dated 16.01.2024 rejecting the application filed by the petitioner to approach this Court in W.P.No.3447/2024. By final order dated 12.03.2024, this Court set aside the said order dated 16.01.2024 passed by the respondent and remitted the matter back to the respondent for reconsideration afresh in accordance with law by holding as under:- In this petition, petitioner seeks quashing of the impugned order at Annexure-A dated 16.01.2024 passed by the 2[nd] respondent whereby the application filed by the petitioner under Section 119(2)(b) of the Income Tax Act, 1961 was rejected. 2. Heard the learned counsel for the petitioner and the respondents. 3. A perusal of the material on record indicate that in relation to assessment year 2022-2023, the petitioner-assessee filed an application under Section 119(2)(b) of the Income Tax Act, seeking condonation of delay in fling the Income Tax Returns. According to the petitioner, due to her husband's ill health and on account of bona fide reasons, unavoidable circumstances and sufficient cause, it was not possible for the petitioner to file the Income Tax Returns within the prescribed period and as such it is the case of genuine hardship, the delay in filing the Income Tax Returns deserves to be condoned. It was also contended that by virtue of the provisions of The National Highways Act, 1956 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (in short 'RFCTLARR Act'), the petitioner would not be liable to pay income tax nor deduct TDS on the compensation amount awarded in favour of the petitioner. However, the said contention of the petitioner was rejected by the 2[nd]respondent by passing the impugned order, which is assailed in the present petition. 4. In support of this contention, learned counsel for the petitioner placed reliance upon the judgment of the HON'BLE DIVISION BENCH OF THIS COURT IN THE CASE OF BANGALORE METRO RAIL CORPORATION LTD., VS. M/S.SRI.BALAJI CORPORATE SERVICES AND OTHERS in Writ Appeal No.890/2022 and connected matters dated 27.09.2023 in order to contend that the petitioner-assessee would neither be liable to pay income tax on the compensation amount nor be liable to deduct TDS on the compensation amount payable in favour of the assessee. 5. My attention is also invited to Section 105(3) of the RFCTLARR Act, 2013 r/w the Fourth Schedule to the said Act as well as the Notifications, Guidelines, Circulars, Orders etc., passed by the Central Government / Highway Authorities, including Gazette Notification dated 28.08.2015, which makes the said Act applicable to the National Highways Act which is notified as item No.7 in the Fourth Schedule. It is therefore contended, that the impugned order passed by the 2[nd] respondent deserves to be set aside and the application for condonation of delay filed by the petitioner deserves to be allowed by exempting the petitioner from payment of income tax and also from deduction of TDS. 6. Per contra, learned counsel for the respondents would support the impugned order and submit that there is no merit in the petition and the same is liable to be dismissed. 7. A perusal of the impugned order indicate that the various aforesaid contentions urged on behalf of the petitioner regarding condonation of delay and exemption from payment of income tax and from deduction of TDS have not been considered or appreciated by the 2[nd] respondent while passing the impugned order, which deserves to be set aside and the matter remitted to 2[nd] respondent for reconsideration afresh in accordance with law. 8. In the result, I pass the following: ORDER (i) Petition is hereby allowed. (ii) The impugned order at 'Annexure-A' is hereby set aside. 6. Per contra, learned counsel for the respondents would support the impugned order and submit that there is no merit in the petition and the same is liable to be dismissed. 7. A perusal of the impugned order indicate that the various aforesaid contentions urged on behalf of the petitioner regarding condonation of delay and exemption from payment of income tax and from deduction of TDS have not been considered or appreciated by the 2[nd] respondent while passing the impugned order, which deserves to be set aside and the matter remitted to 2[nd] respondent for reconsideration afresh in accordance with law. 8. In the result, I pass the following: ORDER (i) Petition is hereby allowed. (ii) The impugned order at 'Annexure-A' is hereby set aside. (iii) Matter is remitted back to the 2[nd] respondent for reconsideration afresh, in accordance with law, bearing in mind the observations made in this order and provisions of Section 105(3) of the RFCTLARR Act, 2013 r/w the Fourth Schedule of the said Act, as well as the judgment of the HON'BLE DIVISION BENCH OF THIS COURT IN THE CASE OF BANGALORE METRO RAIL CORPORATION LTD., VS. M/S.SRI.BALAJI CORPORATE SERVICES AND OTHERS in Writ Appeal No.890/2022 and connected matters dated 27.09.2023 (iv) All rival contentions are kept open and no opinion is expressed on the same. (v) The petitioner undertakes to appear before the 2[nd]respondent on 03.04.2024 without awaiting further notice. (vi) Liberty is reserved in favour of the petitioner to file additional pleadings, documents etc., before 2[nd] respondent who shall proceed further and provide sufficient and reasonable opportunity to the petitioner and conclude the proceedings within a period of three months from 03.04.2024. 2.2 As directed by this Court in the aforesaid order, the petitioner appeared before the respondent and put forth her claim and made submissions including filing written submissions as under:- BEFORE THE HONBLE CHIEF COMMISSIONER OF INCOMETAX CCIT-01 CENTRAL REVENUE BUILDING, QUEENS ROAD, BANGALORE, KARNATAKA-560001 Petitioner. 3/24 CM Uma (PAN: AATPUS290K) W/o Late Chidaanada A/o 73 Years, Resident of Siddalingeswara Nilaya, Adarsha Nagara, Tumkur-572103 Represented along with authorized representative Srinivasa Krishna, Auditor and tax consultant to assist CM Uma the petitioner. FACTS OF THE PETITION The petitioner has filed application under section 119 (2) (b) of income tax act 1961 to condone the delay in filing the return as legal heir of her late husband T.S. Chidananda 27.03.2023, the application was rejected and the rejection order was passed on 16.01.2024. Against the above said order the petitioner filed the W.P 3447/2024, before the Hon'ble High court of Karnataka and that Writ petition was allowed 12.03.2024 by setting aside the order passed on 16.01.2024 and instructed appear before the Hon'ble Presiding officer with the additional documents and pleadings. SUBMISSION 1. The findings made in the order No. ITBA/COM/F/17/2023-24/1059768055 Saka (1) passed by the Hon'ble Chief commissioner of Income tax, CCIT-01 dated 16.01.2024 shall be read as part of this submission. (Annexure-01) Against the above said order the petitioner filed the W.P 3447/2024, before the Hon'ble High court of Karnataka and that Writ petition was allowed 12.03.2024 by setting aside the order passed on 16.01.2024 and instructed appear before the Hon'ble Presiding officer with the additional documents and pleadings. SUBMISSION 1. The findings made in the order No. ITBA/COM/F/17/2023-24/1059768055 Saka (1) passed by the Hon'ble Chief commissioner of Income tax, CCIT-01 dated 16.01.2024 shall be read as part of this submission. (Annexure-01) 2. The applicability of RFCTLARR 2013 is clearly mentioned in the section 02 of the Act, "Section 2. Application of Act.-(1) The provisions of this Act relating to land acquisition, compensation, rehabilitation and resettlement, shall apply, when the appropriate Government acquires land for its own use, hold and control, including for Public Sector Undertakings and for public purpose, and shall include the following purposes, namely- (a) for strategic purposes relating to naval, military, air force, and armed forces of the Union, including central paramilitary forces or any work vital to national security or defence of India or State police, safety of the people; or (b) for infrastructure projects, which includes the following, namely:- (i) all activities or items listed in the notification of the Government of India in the Department of Economic Affairs (Infrastructure Section)number 13/6/2009-INF, dated the 27th March, 2012, excluding private hospitals, private educational institutions and private hotels" 3. The act clearly mentioned that the above act is applicable to infrastructure projects. (Page No. 06 of the RFCTLARR ACT 2013) 4. Notification of the Government of India in the Department of Economic Affairs (Infrastructure Section) number 13/6/2009-INF, dated the 27th March, 2012 is enclosed which approves the applicability of the above act for acquisition of land for construction of road and bridges. 5. 3. CBDT Circular No.36/2016, makes the clarification regarding the applicability of section 96 of RFCTLARR ACT 2013. "As no distinction has been made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income-tax under the RFCTLARR Act, the exemption provided under section 96 of the RFCTLARR Act is wider in scope than the tax-exemption provided under the existing provisions of Income-tax Act, 1961. This has created uncertainty in the matter of taxability of compensation received on compulsory acquisition of land, especially. those relating to acquisition of non-agricultural land. The matter has been examined by the Board and it is hereby clarified that compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of Income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in the Income-tax Act, 1961" 6. While passing the order Hon'ble Presiding officer citied section 105 (3) for passing the order which states "105 (3) The Central Government shall, by notification, within one year from the date of commencement of this Act, direct that any of the provisions of this Act relating to the determination of 6. While passing the order Hon'ble Presiding officer citied section 105 (3) for passing the order which states "105 (3) The Central Government shall, by notification, within one year from the date of commencement of this Act, direct that any of the provisions of this Act relating to the determination of compensation in accordance with the First Schedule and rehabilitation and resettlement specified in the Second and Third Schedules, being beneficial to the affected families, shall apply to the cases of land acquisition under the enactments specified in the Fourth Schedule or shall apply with such exceptions or modifications that do not reduce the compensation or dilute. the provisions of this Act relating to compensation or rehabilitation and resettlement as may be specified in the notification, as the case may be. Hence it is concluded that the RFCTLARR Act, 2013 is not applicable to the compensation received under The National Highways Act, 1956 (48 of 1956) due to forth schedule of section 105(3) of RFCTLARR Act, 2013 7. But Section 105 (2) R/W Section 106 of the RFCTLARR Act, 2013the provides the power to Central Government may, by notification, omit or add to any of the enactments specified in the Fourth Schedule. The central government using the provisions of Section 105 (2) and section 106 of RFCTLARR Act, 2013 central government as amended the 105 (3) and removed the schedule four by passing the Ordinance on 03.04.2015 through Gazette Notification, which makes clear that the provisions of third schedule is applicable to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1st January, 2015. These amendments make it clear that the compensation received under The National Highways Act, 1956 (48 of 1956) which is mentioned in point 07 of the fourth schedule is also governed by RFCTLARR Act, 2013 with effect from 01.01.2015. (Annexure-02) 8. Letter issued by the Ministry Road transport and Highways dated 29.04.2015 it mentioned that all the awards of compensation made on or after 01.01.2015 for acquisitions of lands under the national high way act of 1956, will be as per the first schedule of RFCTLARR Act, 2013. (Annexure-03) 9. Letter issued by the Ministry Road transport and Highways dated 28.12.2017 it is clearly mentioned the provisions of RFCTLARR Act, 2013 is applicable to N.H act of 1956 from 01.01.2015 (Annexure-04) 10. It is humbly submitted that my late husband received the award of compensation for National high way in the year 2021-22, hence the award compensation received by late Husband will be covered as per the first schedule of RFCTLARR Act, 2013 11. With out prejudices to the contention taken above it is clearly establishes that my husband had received the award of compensation as per the first schedule of RFCTLARR Act, 2013, hence I am eligible to get the benefit of section 96 of RFCTLARR Act, 2013. 12. There is a Regarding applicability of TDS under section 194LA on payments made to land losers under the "RFCTLARR Act, 2013", this aspect was Judged by the Hon'ble Andhra Pradesh High Court in Writ Petition Nos. 7874 of 2016 and batch in the case of C. Nanda Kumar v. UOI, [2017] 396 ITR 21 date of order 13th March 2017. Hon'ble High Court after due analysis of section 96 of the "RFCTLARR Act, 2013" and CBDT Circular No. 36 of 2016, dated 25/10/2016 held that provisions of section 194LA are not applicable to compensation received under the "RFCTLARR Act, 2013" hence I am eligible to claim refund of TDS made against ward of compensation received from National Highway-206. Thus I humbly submit that please allow me to file return for the AY 2022-23 by condoning the delay and allow me to claim refund of TDS made for the compensation award received as per the first schedule of RFCTLARR Act, 2013. not applicable to compensation received under the "RFCTLARR Act, 2013" hence I am eligible to claim refund of TDS made against ward of compensation received from National Highway-206. Thus I humbly submit that please allow me to file return for the AY 2022-23 by condoning the delay and allow me to claim refund of TDS made for the compensation award received as per the first schedule of RFCTLARR Act, 2013. 2.3 In pursuance of the same, the respondent proceeded to pass the impugned order rejecting the application filed by the petitioner under Section 119(2)(b) of the I.T Act. Aggrieved by the impugned order, petitioner is before this Court by way of the present petition. 3. Heard learned counsel for the petitioner and learned counsel for the respondent and perused the material on record. 4. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the impugned order is contrary to facts and law warranting interference in the present petition. In support of his contentions, learned counsel for the petitioner placed reliance upon the following decisions:- (i) National Highways Authority of India v. P Nagaraju @ Chheluvaiah Civil Appeal No. 4671 of 2022 dated 11/07/2022 (ii) M/s Vishwanathan M v. The Chief Commissioner of Income Tax and Others in W.P No. 3227 of 2020 dated 18/02/2020 (ker) (iii) Raghavan Nair v. ACIT 89 taxmann.com 212 (ker). (iv) Sharanappa v. Deputy Commissioner, Raichur (2023) 153 taxmann.com 685 (Karnataka) (31/05/2023) W.P No 201497 of 2023 (LA-RES) (v) Meharwade Vishnu v. CIT (TDS) in WP No. 103375 of 2017 and connected matters dated 12/04/2023. (vi) Vellara Francis Thomas v. Union of India (2024) 162 taxmann.com 68 (Karnataka) (27/02/2024). 5. Per contra, learned counsel for the respondent-revenue would support the impugned order and submits that there is no merit in the petition and that the same is liable to be dismissed. 6. Based on the aforesaid pleadings, the following points arise for consideration in the present petition; (i) Whether Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, is applicable to compensation payable for land acquired under the National Highways Act, 1956? (ii) Whether compensation payable for acquisition of land under the National Highways Act, 1956 is exempt from payment of income tax / TDS under the Income Tax Act, 1961? (iii) Whether the respondent was justified in refusing to condone the delay in filing the Income Tax returns thereby rejecting the application filed by the petitioner under Section 119(2)(b) of the Income Tax Act, 1961? Re-Point Nos.1 and 2:- 7. Since both the points are interlinked, they are taken up together for consideration. 7.1 The core issue that arises for consideration in the present petition is, as to whether payment of income tax/TDS is applicable to compensation under the National Highways Act, 1956 (for short ‘the N.H.Act’) in view of Section 96 of the RFCTLARR Act. 7.2 Before adverting to the rival contentions, it would be profitable to extract and refer to the relevant provisions of the RFCTLARR Act as well as the N.H.Act; in this context, Sections 96, 105, 113 and Fourth Schedule of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, read as under:- 96. Exemption from income-tax, stamp duty and fees.–No income tax or stamp duty shall be levied on any award or agreement made under this Act, except under section 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same. 105. Provisions of this Act not to apply in certain cases or to apply with certain modifications.–(1) Subject to sub-section (3), the provisions of this Act shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule. 96. Exemption from income-tax, stamp duty and fees.–No income tax or stamp duty shall be levied on any award or agreement made under this Act, except under section 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same. 105. Provisions of this Act not to apply in certain cases or to apply with certain modifications.–(1) Subject to sub-section (3), the provisions of this Act shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule. (2) Subject to sub-section (2) of section 106, the Central Government may, by notification, omit or add to any of the enactments specified in the Fourth Schedule. (3) The Central Government shall, by notification, within one year from the date of commencement of this Act, direct that any of the provisions of this Act relating to the determination of compensation in accordance with the First Schedule and rehabilitation and resettlement specified in the Second and Third Schedules, being beneficial to the affected families, shall apply to the cases of land acquisition under the enactments specified in the Fourth Schedule or shall apply with such exceptions or modifications that do not reduce the compensation or dilute the provisions of this Act relating to compensation or rehabilitation and resettlement as may be specified in the notification, as the case may be. (4) A copy of every notification proposed to be issued under sub-section (3), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses of Parliament. 113. Power to remove difficulties.–(1) If any difficulty arises in giving effect to the provisions of this Part, the Central Government may, by order, make such provisions or give such directions not inconsistent with the provisions of this Act as may appear to it to be necessary or expedient for the removal of the difficulty: Provided that no such power shall be exercised after the expiry of a period of two years from the commencement of this Act. (2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament. THE FOURTH SCHEDULE (See section 105) LIST OF ENACTMENTS REGULATING LAND ACQUISITION AND REHABILITATION AND RESETTLEMENT 1. The Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958). 2. The Atomic Energy Act, 1962 (33 of 1962). 3. The Damodar Valley Corporation Act, 1948 (14 of 1948). 4. The Indian Tramways Act, 1886 (11 of 1886) 5. The Land Acquisition (Mines) Act, 1885 (18 of 1885). 6. The Metro Railways (Construction of Works) Act, 1978 (33 of 1978). 7. The National Highways Act, 1956 (48 of 1956). 8. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 (50 of 1962). 9. The Requisitioning and Acquisition of Immovable Property Act, 1952 (30 of 1952). 10. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948 (60 of 1948). 11. The Coal Bearing Areas Acquisition and Development Act, 1957 (20 of 1957). 12. The Electricity Act, 2003 (36 of 2003). 13. The Railways Act, 1989 (24 of 1989). 7.3 Section 3G of the National Highways Act, 1956, reads as under:- 3G. Determination of amount payable as compensation.—(1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined by an order of the competent authority. 1978 (33 of 1978). 7. The National Highways Act, 1956 (48 of 1956). 8. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 (50 of 1962). 9. The Requisitioning and Acquisition of Immovable Property Act, 1952 (30 of 1952). 10. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948 (60 of 1948). 11. The Coal Bearing Areas Acquisition and Development Act, 1957 (20 of 1957). 12. The Electricity Act, 2003 (36 of 2003). 13. The Railways Act, 1989 (24 of 1989). 7.3 Section 3G of the National Highways Act, 1956, reads as under:- 3G. Determination of amount payable as compensation.—(1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined by an order of the competent authority. (2) Where the right of user or any right in the nature of an easement on, any land is acquired under this Act, there shall be paid an amount to the owner and any other person whose right of enjoyment in that land has been affected in any manner whatsoever by reason of such acquisition an amount calculated at ten per cent, of the amount determined under sub-section (1), for that land. (3) Before proceeding to determine the amount under sub-section (1) or sub-section (2), the competent authority shall give a public notice published in two local newspapers, one of which will be in a vernacular language inviting claims from all persons interested in the land to be acquired. (4) Such notice shall state the particulars of the land and shall require all persons interested in such land to appear in person or by an agent or by a legal practitioner referred to in sub-section (2) of section 3C, before the competent authority, at a time and place and to state the nature of their respective interest in such land. (5) If the amount determined by the competent authority under sub-section (1) or sub-section (2) is not acceptable to either of the parties, the amount shall, on an application by either of the parties, be determined by the arbitrator to be appointed by the Central Government— (6) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act. (7) The competent authority or the arbitrator while determining the amount under sub-section (1) or sub-section (5), as the case may be, shall take into consideration— (a)the market value of the land on the date of publication of the notification under section 3A; (b) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land; (c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings; (d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change. 7.4 The RFCTLARR Act came into force on 01.01.2014 and it is an undisputed fact and the matter of record that subject compensation amount was paid in favour of the petitioner’s husband in the year 2021-22 after deducting income tax / TDS on the compensation amount. 7.5 Section 105(1) of the RFCTLARR Act provides that the provisions of the RFCTLARR Act shall not apply to the various enactments relating to land acquisition specified in the Fourth Schedule to the Act. In this context, a perusal of the Fourth Schedule will indicate that the National Highways Act, 1956, is enumerated at Sl.No.7 of the Fourth Schedule and consequently, NC: 2024:KHC:31644 7.4 The RFCTLARR Act came into force on 01.01.2014 and it is an undisputed fact and the matter of record that subject compensation amount was paid in favour of the petitioner’s husband in the year 2021-22 after deducting income tax / TDS on the compensation amount. 7.5 Section 105(1) of the RFCTLARR Act provides that the provisions of the RFCTLARR Act shall not apply to the various enactments relating to land acquisition specified in the Fourth Schedule to the Act. In this context, a perusal of the Fourth Schedule will indicate that the National Highways Act, 1956, is enumerated at Sl.No.7 of the Fourth Schedule and consequently, NC: 2024:KHC:31644 the RFCTLARR Act would not be applicable to the acquisition of land under the N.H.Act. However, Section 105(3) empowers the Central Government to issue a Notification in relation to applicability of the RFCTLARR Act to include the enactments enumerated in the Fourth Schedule; in fact, a careful reading of Section 105(3) will indicate that the object / intent of the said provision was to ensure that the inclusion / applicability of the RFCTLARR Act to acquisition of land under any one of the enactments in the Fourth Schedule including the N.H.Act was to ensure that there was no reduction of compensation payable in favour of the land losers nor dilute the provisions of the RFCTLARR Act in relation to depriving the benefits thereunder to the land losers and affected families. 7.6 On 31.12.2014, the Hon’ble President of India promulgated an Ordinance known as “ Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance 2014”. Clause 10 of the said Ordinance substituted Section 105(3) as hereunder:- “10. In the principal Act, in Section 105— (i) for sub-section (3), the following sub-section shall be substituted, namely— substituted, namely— ‘(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1-1-2015;’ (ii) sub-section (4) shall be omitted.” 7.7 Subsequently, on 03.04.2015, one more Ordinance known as “RFCTLARR (Amendment) Ordinance, 2015” was promulgated, in which, clause 12 substituted Section 105(3) as hereunder:- “12. In the principal Act, in Section 105— (i) for sub-section (3), the following sub-section shall be substituted, namely— ‘(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1-1-2015;’ (ii) sub-section (4) shall be omitted.” 7.8 Thereafter, the Hon’ble President promulgated one more Ordinance known as “RFCTLARR(Amendment) Second Ordinance, 2015” dated 30.05.2015, in which, clause No.12 substituted Section 105(3) as under:- “12. In the principal Act, in Section 105— (i) for sub-section (3), the following sub-section shall be substituted, namely— ‘(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1-1-2015;’ (ii) sub-section (4) shall be omitted.” (ii) sub-section (4) shall be omitted.” 7.8 Thereafter, the Hon’ble President promulgated one more Ordinance known as “RFCTLARR(Amendment) Second Ordinance, 2015” dated 30.05.2015, in which, clause No.12 substituted Section 105(3) as under:- “12. In the principal Act, in Section 105— (i) for sub-section (3), the following sub-section shall be substituted, namely— ‘(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1-1-2015;’ (ii) sub-section (4) shall be omitted.” 7.9 Subsequent to promulgation of the aforesaid Three Ordinances, having regard to the fact that the Second Ordinance would also stand lapsed on 31.08.2015, thereby placing land losers at a disadvantageous position, resulting in denial of benefits of enhanced compensation etc., to the cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act, the Central Government invoked Section 113(1) of the RFCTLARR Act and issued a Notification dated 28.08.2015 interalia stating that the provisions of the RFCTLARR Act shall apply in relation to compensation to all cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act including the N.H.Act. The said Notification dated 28.08.2015 is extracted hereunder – “MINISTRY OF RURAL DEVELOPMENT ORDER New Delhi, 28-8-2015 S.O. 2368(E).—Whereas, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013) (hereinafter referred to as “the RFCTLARR Act”) came into effect from 1-1-2014; And whereas, sub-section (3) of Section 105 of the RFCTLARR Act provided for issuing of notification to make the provisions of the Act relating to the determination of the compensation, rehabilitation and resettlement applicable to cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act; And whereas, the notification envisaged under sub-section (3) of Section 105 of the RFCTLARR Act was not issued, and the RFCTLARR (Amendment) Ordinance, 2014 (9 of 2014) was promulgated on 31-12-2014, thereby, inter alia, amending Section 105 of the RFCTLARR Act to extend the provisions of the Act relating to the determination of the compensation and rehabilitation and resettlement to cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act; And whereas, the RFCTLARR (Amendment) Ordinance, 2015 (4 of 2015) was promulgated on 3-4-2015 to give continuity to the provisions of the RFCTLARR (Amendment) Ordinance, 2014; And whereas, the RFCTLARR(Amendment) Second Ordinance, 2015 (5 of 2015) was promulgated on 30-5-2015 to give continuity to the provisions of the RFCTLARR(Amendment) Ordinance, 2015 (4 of 2015); And whereas, the replacement Bill relating to the RFCTLARR(Amendment) Ordinance, 2015 (4 of 2015) was referred to the Joint Committee of the Houses for examination and report and the same is pending with the Joint Committee; And whereas, as per the provisions of Article 123 of the Constitution, the RFCTLARR(Amendment) Second Ordinance, 2015 (5 of 2015) shall lapse on the 31st day of August, 2015 and thereby placing the landowners at the disadvantageous position, resulting in denial of benefits of enhanced compensation and rehabilitation and resettlement to the cases of land acquisition under the 13 Acts specified in the Fourth Schedule to the RFCTLARR Act as extended to the landowners under the said Ordinance; And whereas, the replacement Bill relating to the RFCTLARR(Amendment) Ordinance, 2015 (4 of 2015) was referred to the Joint Committee of the Houses for examination and report and the same is pending with the Joint Committee; And whereas, as per the provisions of Article 123 of the Constitution, the RFCTLARR(Amendment) Second Ordinance, 2015 (5 of 2015) shall lapse on the 31st day of August, 2015 and thereby placing the landowners at the disadvantageous position, resulting in denial of benefits of enhanced compensation and rehabilitation and resettlement to the cases of land acquisition under the 13 Acts specified in the Fourth Schedule to the RFCTLARR Act as extended to the landowners under the said Ordinance; And whereas, the Central Government considers it necessary to extend the benefits available to the landowners under the RFCTLARR Act to similarly placed landowners whose lands are acquired under the 13 enactments specified in the Fourth Schedule; and accordingly the Central Government keeping in view the aforesaid difficulties has decided to extend the beneficial advantage to the landowners and uniformly apply the beneficial provisions of the RFCTLARR Act, relating to the determination of compensation and rehabilitation and resettlement as were made applicable to cases of land acquisition under the said enactments in the interest of the landowners; Now, therefore, in exercise of the powers conferred by sub-section (1) of Section 113 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), the Central Government hereby makes the following Order to remove the aforesaid difficulties, namely: 1. (1) This Order may be called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015. (2) It shall come into force with effect from the 1st day of September, 2015. 2. The provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to allcases of land acquisition under the enactments specified in the Fourth Schedule to the said Act. [F. No. 13011/01/2014-LRD] K.P. Krishnan, Addl. Secy.” 7.10 In pursuance of the aforesaid Ordinances, Notifications, Orders etc., the Ministry of Road Transport and Highways, Government of India, addressed a communication dated 28.12.2017 clarifying that in respect of awards passed and compensation paid under Section 3G of the N.H.Act after 31.12.2014, the compensation would be payable in accordance with the provisions of the RFCTLARR Act. The relevant portion of the communication dated 28.12.2017, reads as under – 4.6 Date of determination of market value of land (i) Another related but important question is regarding the date on which the market value of land is to be determined in cases where land acquisition proceedings had been initiated under the NH Act, 1956 and were at different stages as on 31.12.2014. While there is no ambiguity regarding land acquisition proceedings initiated on or after 01.01.2015, this question assumes significance in view of the financial implications in respect of cases where the process of acquisition was at different stages as on 01.01.2015,. (ii) Section 26 of the RFCTLARR Act stipulates that "the date for determination of market value shall be the date on which the notification has been issued under Section 11 (corresponding to Section 3 A of the NH Act)". Same was the position under the 1894 Act. This is further fortified from the provisions contained in Section 69(2) of the RFCTLARR Act. As such, it is clarified that the relevant date of determination of market value of land is the date on which notification under Section 3 A of the National Highways Act, 1956 is published. of cases where the process of acquisition was at different stages as on 01.01.2015,. (ii) Section 26 of the RFCTLARR Act stipulates that "the date for determination of market value shall be the date on which the notification has been issued under Section 11 (corresponding to Section 3 A of the NH Act)". Same was the position under the 1894 Act. This is further fortified from the provisions contained in Section 69(2) of the RFCTLARR Act. As such, it is clarified that the relevant date of determination of market value of land is the date on which notification under Section 3 A of the National Highways Act, 1956 is published. (iii) By now, it is also a settled proposition that the First, Second and Third Schedule of the RFCTLARR Act, 2013 shall be applicable to the NH Act , 1956 with effect from 01.01.2015. As such, the following is clarified: (a) All cases of Land acquisition where the Awards had not been announced under Section 3G of the NH Act till 31.12.2014 or where such awards had been announced but compensation had not been paid in respect of majority of the land holdings under acquisition as on 31.12.2014, the compensation would be payable in accordance with the FirstSchedule of the RFCTLARR Act, 2013.of the NH Act till 31.12.2014 or where such awards had been announced but compensation had not been paid in respect of majority of the land holdings under acquisition as on 31.12.2014, the compensation would be payable in accordance with the FirstSchedule of the RFCTLARR Act, 2013. (b) In cases, where the land acquisition process was initiated and award of compensation under Section 3G had also been announced before 01.01.2015 but the full amount of Award had not beendeposited by the acquiring agency with the CALA, Section 3G had also been announced before 01.01.2015 but the full amount of Award had not beendeposited by the acquiring agency with the CALA, the compensation amount would be liable to bedetermined in accordance with the First Schedule w.e.f. 01.01.2015; (c) In cases, where the process of acquisition ofland stood completed (i.e. Award under Section 3G announced by CALA, amount deposited by the acquiring agency with the CALA, and compensation paid to the landowners in respect of majority of the land under acquisition) as on or before 31.12.2014, the process would be deemed to have been -completed and settled. Such cases would not be reopened. 7.11 The aforesaid facts and circumstances including the Ordinances, Notifications, Clarifications, Communications etc., of the Central Government itself, clearly establish that the provisions of the RFCTLARR Act are clearly applicable to acquisition of land and payment of compensation under Section 3G of the N.H.Act, which is one of the enactment at Sl.No.7 of the Fourth Schedule to the RFCTLARR Act. It follows therefrom as a natural corollary that acquisition of land, payment of compensation and all acts, deeds, things, matters etc., which are incidental, ancillary and connected to / in relation to payment of compensation would become applicable under the RFCTLARR Act; as a consequence of the same, Section 96 of the RFCTLARR Act, which provides for exemption from payment of income tax / TDS would also be applicable to payment of compensation for acquisition of land under the N.H.Act, which is one of the enactments specified in the Fourth Schedule, to which, the RFCTLARR Act has been made applicable by virtue of the aforesaid Ordinances, Notifications, Orders, Communications etc., referred to supra. 7.12 Under these circumstances, I am of the considered opinion that the respondent clearly fell in error in coming to the conclusion that Section 96 of the RFCTLARR Act, which provides for exemption from payment of income tax was not applicable to the subject compensation paid to the husband of the petitioner for acquisition of his land under the N.H.Act. exemption from payment of income tax / TDS would also be applicable to payment of compensation for acquisition of land under the N.H.Act, which is one of the enactments specified in the Fourth Schedule, to which, the RFCTLARR Act has been made applicable by virtue of the aforesaid Ordinances, Notifications, Orders, Communications etc., referred to supra. 7.12 Under these circumstances, I am of the considered opinion that the respondent clearly fell in error in coming to the conclusion that Section 96 of the RFCTLARR A