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TMI Blog2025 (4) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... e Order dated 06.11.2023 passed by the Respondent No.1 under Section 119 (2) (b) of the Income Tax Act, 1961 (for short "the Act"). 5. The brief facts of the case are as under :- 5.1 The Petitioner filed his return of income for the Assessment Year 2020-21 on 04.01.2021 by declaring gross income of Rs. 2,70,110/- under Section 139(1) of the Act. 5.2 It is case of the Petitioner that the land admeasuring 2529-13-06 sq.mtr situated at Surat belonging to the Petitioner was acquired by the Surat Municipal Corporation under the provisions of the Land Acquisition Act, 1894. Reference Case No. 09 of 2008 was jointly filed by the Petitioner and his family members which was disposed of by the learned 6th Additional Senior Civil Judge, Surat on 08.02.2019 and higher rate of compensation was determined. 5.3 It is the case of the Petitioner that Surat Municipal Corporation by letter dated 03.02.2021 informed the Petitioner and the other joint owners regarding deduction of Tax Deducted at Source (TDS) in the cases where the share of each individual was not identifiable. The Petitioner thereafter preferred an application dated 16.07.2021 to determine his share of compensation before the Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the bank statement showing the credit of the compensation in the bank account along with the documents of the compulsory acquisition of the land. It appears that thereafter the case of the Petitioner was transferred from the Office of the Principal Commissioner of Income Tax to the office of the Chief Commissioner of Income Tax-Respondent No. 1 and by letter dated 03.10.2023 against the same details were asked from the Petitioner. 5.11 The Petitioner again submitted all the details by reply dated 10.10.2023 followed by the letter dated 12.10.2023 along with the bank statement and documents relating to compulsory acquisition of land. The Respondent No.1 thereafter passed the impugned order dated 06.11.2023 rejecting the application filed by the Petitioner for condonation of delay in filing the revised return of income. 6. Being aggrieved, the Petitioner has preferred this petition. 7. Learned advocate Mr. S.P. Majmudar for the Petitioner submitted that the Respondents -authorities ought to have ordered to condone the delay in filing the revised return of income while exercising the jurisdiction and powers vested in him under Section 119 (2) (b) of the Act because the compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at source as the Petitioner is not liable to pay any tax on the amount of compensation on compulsory acquisition of the land in question. 8. On the other-hand, learned Senior Standing Counsel Mr. Karan Sanghani for the Respondents submitted that the Petitioner ought to have verified FORM 26AS before filing the return of income on 04.01.2021 because on perusal of the FORM 26AS for the Assessment Year 2020-21, relevant to Financial Year 2019-20, the transaction date is mentioned as 06.07.2019 and date of booking is shown as 16.10.2019 as both these dates are well before the date of filing of return of income by the Petitioner on 04.01.2021. 8.1 It was submitted that the transaction date means the date of credit of payment of income (whichever is earlier) and date of booking means the date on which the TDS return is processed and the amount booked in FORM 26AS and this date would be the date after the TDS return is filed. It was therefore submitted that the plea taken by the Petitioner is nothing but an after thought as the Petitioner was well aware of the amount which was received on compulsory acquisition of the land from Surat Municipal Corporation. 8.2 Learned Senior Standin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the application of the Petitioner to condone the delay in filing the revised return to claim the refund of the TDS of Rs. 37,40,330/- deposited by the Surat Municipal Corporation. The reasoning given by the Respondents authorities while rejecting the application do not commensurate with the facts of the case inasmuch as the Respondents have failed to consider that the compensation received by the Petitioner was exempted from tax and therefore, the Petitioner is entitled to get the refund of the TDS which was deposited by the acquiring body with the Government and for that purpose, the Petitioner is required to file the revised return which can be possible only if the delay in filing such revised return is condoned by exercising the powers vested in Section 119 of the Act. The objection of Section 119 of the Act is to see that the Assessee are even not put to any unnecessary hardships to claim any refund which otherwise is eligible to get. Section 119 (2) (b) reads as under :- (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise [any income-tax authority, not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department. These appellants preferred the writ petition in the High Court stating that no such deduction at source was permissible in view of the provisions of Section 194-LA of the Income Tax Act, 1961, since the land which was acquired was agricultural land and this provision categorically mentions that in respect of agricultural land, tax at source is not to be deducted. 3. There is no quarrel about the position of law mentioned above. After examining this provision, the High Court had passed an order in Risal Singh v. Union of India [Risal Singh v. Union of India, 2010 SCC OnLine P&H 276 : (2010) 321 ITR 251] directing the Income Tax Department to refund the amount to the Collector with a direction to the Collector to determine whether the compensation is paid for property other than agricultural land or otherwise and whether deduction of tax at source was permissible under any provision of law. The manner in which the Land Acquisition Collector has to proceed further after determining the aforesaid issue is contained in Para 8 of Writ Petition No. 9912 of 2009 decided on 11-1-2001, which is reproduced below: "8. Accordingly, we allow this petition and direct the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be said to be attributable to the petitioners in the facts of the case. 11. Instruction No. 7/2013 dated 15.07.2013 was issued pursuant to the directions issued by the Delhi High Court in the case of Court On its Own Motion v. Commissioner of Income Tax (supra), that in no case interest u/s 244A of the Act be denied to the assessee where the assessee is not at fault. In the facts of the case, the petitioners-assessees were not at fault for not filing the return of income to claim the refund as the deductor i.e. Executive Engineer, Irrigation department neither informed the petitioners about the deduction of tax nor Form-16A which is mandatory was issued. On the contrary, when the petitioners made representations by informing the Executive Engineer, Irrigation department about the wrong mentioning of the provision for deduction of tax in Form No. 26AS issued as per return of TDS to be filed by the deductor, no reply was given. Therefore, it is clear that the petitioners were not at fault for the delay caused in filing the return of income claiming the refund of the tax deducted at source as no tax was payable by the petitioners on the amount of interest under section 194LA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course." 13. It is true that in the said case, the refund was claimed in the return of income which was filed in time. However, the ratio of the said judgment is with regard to the entitlement of the assessee to receive interest on the amount of refund when the collection was illegal and the revenue was obliged to refund such amount with interest as money so deposited is retained and enjoyed by the revenue whereas in the facts of the present case delay in filing the return of income is not attributable to the petitioners and such fact is also not in dispute as the respondent has condoned delay and granted refund to the petitioners. 14. Reliance place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are directed to pass the order to condone the delay in filing the return for the Assessment Year 2013-2014 and to issue the refund with interest under section 244A of the Act, 1961 from the date of deposit of the amount of TDS till date of payment of refund as per provisions of section 244A of the Act, 1961. Such exercise shall be completed within a period of 12 weeks from the date of receipt of a copy of this order. Rule is made absolute to the aforesaid extent. No order as to costs. 10. Mr. Karan Sanghani, learned Senior Standing Counsel also submitted that that the Petitioner is liable to pay the tax on the interest component which was received by the Petitioner after the Order dated 04.09.2021 passed by the Court. Such contention of the learned Senior Standing Counsel Mr. Sanghani is contrary to the provisions of Act as the entire compensation received by the Petitioner is exempted from tax and therefore, no taxes is payable on any part of the compensation received by the Petitioner from the acquiring body i.e. Surat Municipal Corporation. 11. In view of the above conspectus of law, this petition succeeds and is accordingly allowed. The impugned order dated 06.11.2023 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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