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2023 (7) TMI 85 - HC - Income TaxCompensation on land acquired by NHAI - petitioner was granted compensation as well as interest on the said compensation - petitioner s stand that the compensation and interest received from the NHAI was not amenable to imposition of income tax, NHAI deducted tax at source, both vis- -vis the principal amount as well as the interest - HELD THAT - Insofar as the interest is concerned, tax at source was deposited by the NHAI for the relevant period i.e. AY 2020-21.As regards the principal amount, initially, tax at source was not deposited for the AY in issue i.e., AY 2020-21 but for another AY. NHAI, having realised that a mistake had been committed, made a course correction. The revised Form 26-AS reflects this position. There is no dispute that the petitioner, while filing its return for AY 2020-21, had taken the position that the amount received as compensation and interest, was exempt from imposition of tax. The said return was, concededly, processed u/s 143(1) - The record indicates that the intimation u/s 143(1) of the Act served on the petitioner is dated 08.05.2021. Via this intimation, demand has been raised against the petitioner, albeit, without giving credit for the tax deducted at source on compensation. It is important to record that the petitioner had earlier moved a rectification application u/s 154 of the Act, which was disposed via an order dated 15.02.2022, whereby demand for the AY in issue i.e., 2020-21 was scaled down to Rs.16,440/-. Although the rectification application seeks credit for tax deducted at source vis- -vis interest, it appears the petitioner has already received the same (as has been noted in paragraph 6 of the application dated 18.08.2022) Accordingly, this writ petition is disposed of with the directions to JAO to render a decision on the pending rectification application dated 18.08.2022, at the earliest, though not later than six (6) weeks from the date of receipt of a copy of the instant judgment.
Issues involved:
The judgment concerns a writ petition related to the Assessment Year (AY) 2020-21 involving the imposition of income tax on compensation and interest received by the petitioner from the National Highways Authority of India (NHAI) under the National Highways Act, 1956. Details of the Judgment: Issue 1: Tax Deduction at Source (TDS) on Compensation and Interest: The petitioner received compensation and interest from NHAI for the acquired land, which NHAI subjected to TDS. Initially, there was an error in depositing TDS for the principal amount for AY 2020-21, but NHAI rectified this mistake. The petitioner had also filed a rectification application seeking credit for TDS amounts of Rs. 8,48,84,800 and Rs. 2,25,352 for the relevant year. Issue 2: Processing of Return under Section 143(1) of the Act: The petitioner's return for AY 2020-21, claiming exemption from tax on the compensation and interest received, was processed under Section 143(1) of the Act. However, the intimation served on the petitioner raised a demand of Rs. 2,95,490 without giving credit for TDS on compensation. Issue 3: Pending Rectification Application: The petitioner had filed a rectification application seeking various reliefs, including giving credit for TDS amounts, rectifying the outstanding demand, and granting a refund. The application was pending consideration, and a previous rectification application had led to the scaling down of the demand to Rs. 16,440. Decision: The High Court directed the Jurisdictional Assessing Officer (JAO) to decide on the pending rectification application dated 18.08.2022 within six weeks from the date of the judgment. The petitioner was granted liberty to seek further legal remedies if the decision by the JAO was unfavorable. The pending application was to be closed, and parties were instructed to act based on the digitally signed copy of the order.
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