Case Note & Summary
The Commissioner of Income Tax (TDS), Bengaluru, filed five intra-court writ appeals under section 4 of the Karnataka High Court Act, 1961, challenging a common order dated 12.04.2023 passed by a learned Single Judge in W.P. Nos. 103375 to 103379 of 2017. The writ petitioners were land-losers—individuals and a partnership firm—whose lands were acquired for a public project by the Karnataka Road Development Corporation and Hubli-Dharwad BRTS Company under the Karnataka Highways Act, 1964. They received compensation, from which tax was deducted at source (TDS) under the Income Tax Act, 1961. The land-losers sought a direction for refund of the TDS and a declaration that the compensation was exempt from income tax by virtue of section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Single Judge allowed the writ petitions, holding that the compensation was exempt and ordering refund of the TDS amount. Aggrieved, the Revenue preferred these appeals, contending that the exemption under section 96 applies only when the land acquisition is made strictly under the 2013 Act, not under other statutes like the Karnataka Highways Act. The Revenue argued that the provision must be read literally and that the Parliament intentionally limited the exemption to acquisitions under the 2013 Act as a matter of policy. The Division Bench, comprising Justice Krishna S. Dixit and Justice Vijaykumar A. Patil, heard the submissions of the learned Senior Panel Counsel for the Revenue and the learned Senior Counsel for the land-losers. The appeals were reserved for judgment on 26.09.2024, and the judgment was delivered on 29.10.2024. The available text records only the opening part of the judgment, which sets out the background and the Revenue's submissions.
Headnote
A) Income Tax - Exemption on Land Acquisition Compensation - Applicability of Section 96, Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - Whether exemption from income tax under section 96 applies only when acquisition is under the 2013 Act or extends to acquisitions under other statutes such as Karnataka Highways Act, 1964 - Single Judge allowed writ petitions and directed refund of TDS, holding that compensation is exempt under section 96 - Revenue appeals arguing strict construction and limited applicability - (Paras 1-2).
Issue of Consideration
Whether section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which exempts compensation from income tax, applies to land acquisitions made under statutes other than the 2013 Act, such as the Karnataka Highways Act, 1964.
Law Points
- Section 96
- Right to Fair Compensation and Transparency in Land Acquisition
- Rehabilitation and Resettlement Act
- 2013
- exempts compensation from income tax
- exemption arguably limited to acquisitions under that Act only.
