2020 (7) TMI 631 - HC - Income Tax

Interest received under Section 28 of the Land Acquisition Act, 1894 - HELD THAT - Different High Courts subsequent to the judgment of CIT Vs. Ghanshyam Dass HUF 2009 (7) TMI 12 - SUPREME COURT have held that tax is payable on the interest received under Section 28 of the Land Acquisition Act, under the head income from other sources . Most of the applications filed by the petitioner are barred by limitation under the same Circular dated 9th June, 2015, relied upon by the learned counsel for the petitioner. Keeping in view the limited prayer sought in the writ petition, the same is disposed of with a direction to the respondent to decide the applications filed by the petitioner within eight weeks in accordance with law.

Summary

Issues:
1. Delay in deciding applications for refund of income tax under Section 119(2)(b) of the Income Tax Act, 1961.
2. Interpretation of tax liability on interest received under Section 28 of the Land Acquisition Act, 1894.
3. Bar on limitation for filing applications under Circular dated 9th June, 2015.

Analysis:
1. The petitioner filed a writ petition seeking a direction to the respondent to decide applications for refund of income tax paid on interest received under Section 28 of the Land Acquisition Act for various assessment years. The petitioner relied on the Supreme Court judgment in CIT Vs. Ghanshyam Dass HUF, (2009) 8 SCC 412, which held that such interest is not taxable as income. The petitioner highlighted the right to claim a refund for tax paid under a misrepresentation or mistake. The delay of almost four years in deciding the applications was emphasized, citing a contradiction with the Circular dated 9th June, 2015 issued by the Central Board of Direct Taxes.

2. The respondent, represented by learned counsel, argued that subsequent High Court judgments have held that tax is payable on interest received under Section 28 of the Land Acquisition Act as "income from other sources." Additionally, it was pointed out that most of the petitioner's applications were time-barred under the Circular dated 9th June, 2015. Despite these arguments, the Court disposed of the petition by directing the respondent to decide the applications within eight weeks, maintaining the rights and contentions of both parties, including the issue of maintainability, open for further consideration.

3. The judgment, delivered by Hon'ble Mr. Justice Manmohan, through an oral order, acknowledged the urgency expressed in listing the petition. The case was heard via video conferencing due to the ongoing circumstances. The Court's decision to allow the petition, subject to exceptions, and the direction for the respondent to decide the applications within a specified timeframe were the key outcomes of the judgment. The order was to be uploaded on the website immediately, with a copy forwarded to the respective counsels via email for compliance.