Wp(C)/24384/2008 Of District Collector,Pathanamthitta v. The Income Tax Officer,Thiruvalla

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR WEDNESDAY, THE 1ST DAY OF OCTOBER 2014/9TH ASWINA, 1936 WP(C).No. 24384 of 2008 (C) ---------------------------- PETITIONER(S): --------------- 1. THE DISTRICT COLLECTOR, PATHANAMTHITTA. 2. THE SPECIAL TAHSILDAR LA (GENERAL) PATHANAMTHITTA. BY ADV. GOVERNMENT PLEADER SMT.LILLY.K.T RESPONDENT(S): -------------- 1. THE INCOME TAX OFFICER, THIRUVALLA 2. THE COMMISSIONER OF INCOME TAX, KOTTAYAM. 3. MRS. ANNIE VARGHESE, W/O LATE THOMAS VARGHESE 4. DR. JACOB PETER VARGHESE, S/O THOMAS VARGHESE, PEARLMOOR, THIRUVALLA REPRESENTED BY POWER OF ATTORNEY HOLDER MRS. ANNIE VARGHESE. *ADDL.R5 AND ADDL.R6 IMPLEADED: ADDL.R5: CENTRAL BOARD OF DIRECT TAXES, NEW DELHI ADDL.R6. CHIEF COMMISSIONER OF INCOME TAXES,THIRUVANANTHAPURAM (*ADDL.R5 AND R6 ARE IMPLEADED VIDE ORDER DATED 19.01.2010 IN I.A.NO.777 OF2010) R3 & R4 BY ADV. SRI.JOSEPH KODIANTHARA R4 BY ADV. SRI.MATHEWS K.UTHUPPACHAN R1 & 2 BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX R1 & R2 BY SRI.GEORGE K. GEORGE, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-10-2014,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 24384 of 2008 (C) APPENDIX PETITIONER'S EXHIBITS: EXT.P1: TRUE COPY OF THE JUDGMENT DATED 19.6.2006 IN W.P.10875/06 EXT.P2: TRUE COPY OF THE CHALAN NO.498 DATED 30.3.2006 FOR AN AMOUNT OFRS.4,44,520/- EXT.P3: TRUE COPY OF THE CHALAN NO.S.239 DATED 29.04.2006 FOR AN AMOUNTOF RS.5,93,520/- EXT.P4: TRUE COPY OF THE REQUEST LETTER DATED 16.10.2007 SEND TO THE 2NDRESPONDENT BY THE 2ND PETITIONER EXT.P5: TRUE COPY OF THE LETTER NO.C.NO.TDS/CIT/ATM/2007-08 DATED 9.11.2007 RESPONDENTS' EXHIBITS:NIL //TRUE COPY// P A TO JUDGE A.K.JAYASANKARAN NAMBIAR, J. ---------------------------------------- W.P.(C).No.24384 of 2008 ---------------------------------------- Dated this the 1[st] day of October, 2014 J U D G M E N T This is a writ petition preferred by the District Collector,Pathanamthitta, as also the Special Tahsildar LA(General),Pathanamthitta, seeking refund of the amounts paid to the IncomeTax Department by way of tax deduction at source (TDS), whileeffecting payment of compensation amounts to the Sub Court,Thiruvalla, pursuant to the award that was passed in landacquisition proceedings that were initiated and resulted in theacquisition of properties belonging to the 3[rd] and 4[th] respondents. Itis pointed out that, although an award was passed and the amountspayable to respondents 3 and 4 deposited before the Sub Court,Thiruvalla, in subsequent proceedings before this Court, the awarditself was set aside and the acquisition proceedings held invalid onaccount of the fact that the award was passed more than two yearsafter the date of publication of the declaration under Section 6 ofthe Land Acquisition Act. The petitioners would point out that,pursuant to the judgment of the High Court, they had withdrawnthe amounts deposited before the Sub Court, Thiruvalla and paid itback to the requisitioning authority. In respect of the amounts thathad been paid to the Income Tax Department by way of T.D.S, theyhad preferred an application before the 1[st] and 2[nd] respondents which came to be rejected by Ext.P5 order of the 2[nd] respondent. which came to be rejected by Ext.P5 order of the 2[nd] respondent. 2. A counter affidavit has been filed on behalf of the 2[nd]respondent wherein it is stated that the T.D.S payment was madein accordance with the provisions of section 203 of the Income TaxAct. Once the payment was made to the Income Tax Department,then the amount would be adjusted towards the tax liability of thedeductee. Accordingly, if there was to be a refund of the amountspaid, it was incumbent upon the deductee to file a return of incomewith the jurisdictional income tax authority enclosing the T.D.Scertificate issued by the deductor, and it is only thereafter that theIncome Tax Department can process the refund applicationpreferred by the deductee. 3. I have heard the learned Government Pleader Smt.LillyK.T, for the petitioners and Sri.Jose Joseph, the learned Standingcounsel appearing on behalf of the respondents 1 and 2 and Sri.Joseph Kodianthara, the learned counsel appearing on behalf of the3[rd] and 4[th] respondents. 4. On a consideration of the facts and circumstances of thecase and the submissions made across the Bar, I am of the viewthat this is a case where, admittedly, the T.D.S amounts were deducted from payments that were due to the 3rd and 4[th]respondents pursuant to an award that was passed under the LandAcquisition Act. The T.D.S amounts were then paid over to theIncome Tax Department. The compensation amount, as per theaward passed in terms of the Land Acquisition Act, was, however,not actually paid to the 3[rd] and 4[th] respondents but was depositedbefore the Sub Court, Thiruvalla which would have considered thereference applications, if any, preferred by awardees ofcompensation amounts. Subsequently, however, the award passedunder the Act was set aside by this Court in proceedings thatchallenged the acquisition proceedings. As a consequence of thejudgment of this Court, the compensation amounts that werepayable to the 3[rd] and 4[th] respondents in terms of the award stoodnullified and accordingly, the 3[rd] and 4[th] respondents did notreceive any compensation since the acquisition itself was set aside.This resulted in a situation where the payment of T.D.S, by thepetitioners to the Income Tax Department, was not actuallyrequired but had already been effected at the time of payment ofthe compensation amount to the Sub Court, Thiruvalla. No doubt,the Standing counsel for the 1[st] and 2[nd] respondents would pointout that, as per the Income Tax Act, there is a detailed procedurethat has to be followed for the purposes of getting a refund of T.D.Samounts erroneously paid. In this case, however, considering the W.P.(C).No.24384 of 2008 fact that no amounts were admittedly paid, by way ofcompensation, to the 3[rd] and 4[th] respondents and, consequently,there was no tax that the 3[rd] and 4[th] respondents would have to payto the Income Tax Department in respect of the said compensationamounts, I feel the writ petition can be disposed with the followingdirections: 1. The 1[st] and 2[nd] respondents shall ascertain as to whether credit has been given in theassessments of the 3[rd] and 4[th] respondents, inrespect of the T.D.S payments made to the 1[st]and 2[nd] respondents by the petitiuoners. If nocredit has been given to the 3[rd] and 4[th]respondents in their individual assessments,then the 1[st] and 2[nd] respondents shall refundthe T.D.S amounts to the petitioners. 2. If on verification, it is found by the 1[st] and2[nd] respondents that the 3[rd] and 4[th] respondentshave obtained the benefit of credit of the T.D.Spayments made, by the petitioners, on thecompensation amounts that were awarded tothem, then the 1[st] and 2[nd] respondents shallintimate the fact to the 3[rd] and 4[th] respondents ,with a copy to the petitioners, and thereuponthe 3[rd] and 4[th] respondents shall promptly repaythe said amounts to the petitioners. 3. The 1[st] and 2[nd] respondents shall take steps mns 2. If on verification, it is found by the 1[st] and2[nd] respondents that the 3[rd] and 4[th] respondentshave obtained the benefit of credit of the T.D.Spayments made, by the petitioners, on thecompensation amounts that were awarded tothem, then the 1[st] and 2[nd] respondents shallintimate the fact to the 3[rd] and 4[th] respondents ,with a copy to the petitioners, and thereuponthe 3[rd] and 4[th] respondents shall promptly repaythe said amounts to the petitioners. 3. The 1[st] and 2[nd] respondents shall take steps mns to complete the verification, as aforementioned,within a period of three months from thereceipt of the copy of the judgment. With these directions the writ petition isdisposed. A.K.JAYASANKARAN NAMBIAR JUDGE