Allowed

Commissioner of Income Tax (Tds) v. Paulson Paulose

Kerala HC8 Jul 2021WA/1818/2014

Case brief

AI extract

What is this about?

The High Court of Kerala allowed writ appeals filed by the Commissioner of Income Tax challenging a Single Judge order. The Single Judge had held tax could not be deducted at source from negotiated settlement compensation. The High Court, relying on Balakrishnan v. Union of India, upheld that negotiated settlements following initiation of acquisition proceedings remain compulsory acquisition, mand

What did the court decide?

The Single Judge order restraining deduction of tax at source under Section 194LA is set aside and the appeals are disposed of.

Commissioner of Income Tax (Tds) Vs Paulson Paulose — Company and Corporate | Kerala HC (2021)

¶1

“C.R.”

¶2

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶3

PRESENT

¶4

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶5

¶6

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶7

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943 WA NO. 1250 OF 2014

¶8

AGAINST THE JUDGMENT IN WPC 12208/2014 OF HIGH COURT OF KERALA,

¶9

ERNAKULAM

¶10

APPELLANT/ 4TH RESPONDENT :

¶11

COMMISSIONER OF INCOME TAX (TDS),

¶12

OFFICE OF THE COMMISSIONER OF INCOME TAX, KOCHI C.R.BUILDING, I.S. PRESS ROAD, KOCHI - 682 018.

¶13

BY ADVS.

¶14

SRI.P.K.R.MENON, SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶15

RESPONDENTS/ PETITIONERS/ RESPONDENTS 1 TO 3 :

¶16

1 MACKAR KUNJU,

¶17

AGED 62 YEARS, S/O.AIMULLA, MOONNEPILLYPARAMBIL, ANAKKATTU CHENNAMBILLIL HOUSE, MUTTAM, THAIKKATTUKARA P.O., ALUVA WEST VILLAGE,

¶18

ALUVA TALUK.

¶19

2 MAJEED,

¶20

AGED 62 YEARS, S/O.AIMULLA, MOONNEPILLYPARAMBIL, ANAKKATTU CHENNAMBILLIL HOUSE, MUTTAM, THAIKKATTUKARA P.O., ALUVA WEST VILLAGE, ALUVA TALUK.

¶21

3 THE DISTRICT COLLECTOR, ERNAKULAM COLLECTORATE, CIVIL STATION, KAKKANAD, PIN - 682 030.

¶22

WA NO. 1250 OF 2014 & connected cases

¶23

¶24

4 SPECIAL TAHSILDAR (L.A.), NO.1, KOCHI RAIL PROJECT, CIVIL STATION, KAKKANAD, PIN - 682 030.

¶25

5 KOCHI METRO RAIL CORPORATION, REP. BY ITS MANAGING DIRECTOR, VYTTILA, ERNAKULAM, PIN - 682 019.

¶26

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH W.A. Nos.1295/2014, 1296/2014, 1538/2014, 1539/2014, 1728/2014, 1729/2014, 1818/2014, 1819/2014 & 170/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶27

WA NO. 1250 OF 2014 & connected cases

¶28

¶29

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶30

PRESENT

¶31

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶32

¶33

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶34

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶35

WA NO. 1295 OF 2014

¶36

AGAINST THE JUDGMENT IN WP(C) No.11943/2014 OF HIGH COURT OF KERALA, ERNAKULAM

¶37

th APPELLANT/ 4 RESPONDENT:

¶38

COMMISSIONER OF INCOME TAX (TDS) OFFICE OF THE COMMISSIONER OF INCOME TAX, KOCHI C.R.BUILDINGS, I.S.PRESS ROAD, KOCHI - 682 018.

¶39

BY ADVS.

¶40

SRI.P.K.R.MENON, SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶41

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶42

1 ABDUL KHADER AGED 64 YEARS, S/O.MEETHEEN, MEETHARAKKAL HOSUE, CHAMPIARATH, THAIKKATTUKARA, ALUVA WEST VILLAGE, ALUVA TALUK, ERNAKULAM.

¶43

2 JAMEELA, AGED 58 YEARS, W/O.ABDUL KHADER, MEETHARAKKAL HOUSE, CHAMPIARATH, THAIKATTUKARA, ALUVA WEST VILLAGE, ALUVA TALUK, ERNAKULAM.

¶44

3 THE DISTRICT COLLECTOR

¶45

WA NO. 1250 OF 2014 & connected cases

¶46

¶47

ERNAKULAM COLLECTORATE, CIVIL STATION, KAKKANAD, PIN - 682 030.

¶48

4 SPECIAL TAHSILDAR (L.A.)NO.1, KOCHI RAIL PROJECT, CIVIL STATION, KAKKANAD, PIN - 682 030.

¶49

5 KOCHI METRO RAIL CORPORATION, REPRESENTED BY ITS MANAGING DIRECTOR, VYTTILA, ERNAKULAM, PIN - 682 019.

¶50

BY ADVS. SRI.T.B.HOOD SMT.M.ISHA

¶51

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶52

WA NO. 1250 OF 2014 & connected cases

¶53

¶54

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶55

PRESENT

¶56

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶57

¶58

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶59

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶60

WA NO. 1296 OF 2014

¶61

AGAINST THE JUDGMENT IN WP(C) No.12206/2014 OF HIGH COURT OF KERALA, ERNAKULAM

¶62

APPELLANT/4TH RESPONDENT:

¶63

COMMISSIONER OF INCOME TAX (TDS), OFFICE OF THE COMMISSIONER OF INCOME TAX, KOCHI C.R.BUILDINGS, I.S.PRESS ROAD, KOCHI - 682 018.

¶64

BY ADVS.

¶65

SRI.P.K.R.MENON, SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶66

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶67

1. AMINA, AGED 58 YEARS, W/O.VEERAKUTTY,

¶68

CHENNAMBIULLIL HOUSE,

¶69

MUTTOM, THAIKKATTUKARA P.O.,

¶70

ALUVA WEST VILLAGE, ALUVA TALUK

¶71

2. ABDUL RAHMAN,

¶72

AGED 46 YEARS, S/O.ABDUL KHADER

¶73

PEEDIKAPARAMBIL HOUSE,

¶74

MUTTOM, THAIKKATTUKARA P.O.

¶75

WA NO. 1250 OF 2014 & connected cases

¶76

¶77

ALUVA WEST VILLAGE, ALUVA TALUK,

¶78

3. BIJUTHA BEEVI,

¶79

AGED 41 YEARS, W/O.ABDUL REHMAN,

¶80

PEEDIKAPARAMBIL HOUSE,

¶81

MUTTOM, THAIKKATTUKARA P.O.,

¶82

ALUVA WEST VILLAGE, ALUVA TALUK

¶83

4. THE DISTRICT COLLECTOR, ERNAKULAM COLLECTORATE, CIVIL STATION,

¶84

KAKKANAD, PIN - 682 030.

¶85

5. SPECIAL TAHSILDAR (L.A.)NO.1

¶86

KOCHI RAIL PROJECT, CIVIL STATION,

¶87

KAKKANAD, PIN - 682 030.

¶88

6. KOCHI METRO RAIL CORPORATION REPRESENTED BY ITS MANAGING DIRECTOR,

¶89

VYTTILA, ERNAKULAM, PIN - 682 019.

¶90

BY ADVS. SRI.T.B.HOOD SMT.M.ISHA

¶91

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶92

WA NO. 1250 OF 2014 & connected cases

¶93

¶94

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶95

PRESENT

¶96

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶97

¶98

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶99

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶100

WA NO. 1538 OF 2014

¶101

AGAINST THE JUDGMENT IN WP(C) No.12209/2014 OF HIGH COURT OF KERALA, ERNAKULAM

¶102

APPELLANT/4TH RESPONDENT:

¶103

COMMISSIONER OF INCOME TAX (TDS) OFFICE OF THE COMMISSIONER OF INCOME TAX,

¶104

KOCHI C.R.BUILDINGS, I.S PRESS ROAD,

¶105

KOCHI - 682 018.

¶106

BY ADV SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶107

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶108

1 ABOOBACKER, AGED 52 YEARS, C/O. KOCHUNNI,

¶109

CHENNAMBILLIL HOUSE,

¶110

MUTTOM, THAIKKATUKARA P.O., ALUVA WEST VILLAGE,

¶111

ALUVA TALUK - 683 106.

¶112

2 SAKEER, AGED 52 YEARS, S/O. KOCHUNNI,

¶113

CHENNAMBILLIL HOUSE

¶114

MUTTOM, THAIKKATTUKARA P.O., ALUVA WEST VILLAGE,

¶115

WA NO. 1250 OF 2014 & connected cases

¶116

¶117

ALUVA TALUK - 683 106.

¶118

3 THE DISTRICT COLLECTOR, ERNAKULAM COLLECTORATE, CIVIL STATION,

¶119

KAKKANAD - 682 030.

¶120

4 SPECIAL TAHSILDAR (L.A)NO.1,

¶121

KOCHI RAIL PROJECT, CIVIL STATION, KAKKANAD - 682 030.

¶122

5 KOCHI METRO RAIL CORPORATION, REP. BY ITS MANAGING DIRECTOR, VYTTILA, ERNAKULAM - 682 019.

¶123

BY ADVS. SRI.T.B.HOOD SMT.M.ISHA

¶124

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶125

WA NO. 1250 OF 2014 & connected cases

¶126

¶127

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶128

PRESENT

¶129

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶130

¶131

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶132

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶133

WA NO. 1539 OF 2014

¶134

AGAINST THE JUDGMENT IN WP(C) NO.9236/2014 OF HIGH COURT OF KERALA, ERNAKULAM

¶135

APPELLANT/4TH RESPONDENT:

¶136

COMMISSIONER OF INCOME TAX (TDS) OFFICE OF THE COMMISSIONER OF INCOME TAX,

¶137

KOCHI C.R. BUILDINGS, I.S PRESS ROAD,

¶138

KOCHI - 682018.

¶139

BY ADV SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶140

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶141

1 V.S. LALAN AGED 55 YEARS, S/O. VELIYIL SANKUNNY,

¶142

SRUTHINIDHILAYAMN,

¶143

NEAR MEDICAL CENTRE HOSPITAL, PALARIVATTOM,

¶144

ERNAKULAM. 682 025

¶145

2 K.H.JAYAPRAKASH AGED 52 YEARS, S/O. HARI SHENOY, G-3, KENT PARADISE,

¶146

MAYFEST ROAD, THAMMANAM P.O. 682 032

¶147

WA NO. 1250 OF 2014 & connected cases

¶148

¶149

3 THE DISTRICT COLLECTOR ERNAKULAM COLLECTORATE, CIVIL STATION, KAKKANAD - 682 030.

¶150

4 SPECIAL TAHSILDAR (LA) NO.1, KOCHI RAIL PROJECT, CIVIL STATION, KAKKANAD - 682 030.

¶151

5 KOCHI METRO RAIL CORPORATION REP. BY ITS MANAGING DIRECTOR, VYTTILA, ERNAKULAM - 682 019. BY ADV SRI.K.R.VINOD

¶152

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶153

WA NO. 1250 OF 2014 & connected cases

¶154

¶155

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶156

PRESENT

¶157

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶158

¶159

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶160

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶161

WA NO. 1728 OF 2014

¶162

AGAINST THE JUDGMENT IN WP(C) NO.9231/2014 OF HIGH COURT OF

¶163

KERALA, ERNAKULAM

¶164

APPELLANT/4TH RESPONDENT:

¶165

COMMISSIONER OF INCOME TAX (TDS), OFFICE OF THE COMMISSIONER OF INCOME TAX,

¶166

KOCHI C.R. BUILDINGS, I.S.PRESS ROAD,

¶167

KOCHI - 682 018.

¶168

BY ADV SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶169

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶170

1 M.D. JOSE AGED 62 YEARS, S/O.DEVASSY,

¶171

MALIYEKAL HOUE,

¶172

BEENA-ANCHUMANA ROAD, EDAPPALLY ROAD,

¶173

KOCHI-24.

¶174

2 THE DISTRICT COLLECTOR ERNAKULAM COLLECTORATE, CIVIL STATION,

¶175

KAKKANAD, PIN - 682 030.

¶176

3 SPECIAL TAHASILDAR (L.A) NO.1

¶177

WA NO. 1250 OF 2014 & connected cases

¶178

¶179

KOCHI RAIL PROJECT, CIVIL STATION, KAKKANAD, PIN - 682 030.

¶180

4 KOCHI METRO RAIL CORPORATION REPRESENTED BY ITS MANAGING DIRECTOR, VYTTILA, ERNAKULAM, PIN - 682 019. BY ADVS. SRI.T.B.HOOD SMT.M.ISHA

¶181

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶182

WA NO. 1250 OF 2014 & connected cases

¶183

¶184

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶185

PRESENT

¶186

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶187

¶188

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶189

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶190

WA NO. 1729 OF 2014

¶191

AGAINST THE JUDGMENT IN WP(C) NO.14914/2014 OF HIGH COURT OF KERALA, ERNAKULAM

¶192

APPELLANT/4TH RESPONDENT:

¶193

COMMISSIONER OF INCOME TAX (TDS) OFFICE OF THE COMMISSIONER OF INCOME TAX,

¶194

KOCHI, C.R.BUILDINGS, I.S.PRESS ROAD,

¶195

KOCHI - 682 018.

¶196

BY ADV SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶197

RESPONDENTS/PETITIONERS/RESPONDENTS:

¶198

1. P.S. ABDUL RAHIMAN

¶199

AGED 65 YEARS, S/O SAYID MOHAMMED

¶200

33/124C, MARHABA

¶201

SOUMYA NAGAR, VENNALA

¶202

ERNAKULAM

¶203

2. THE DISTRICT COLLECTOR COLLECTORATE, CIVIL STATION, KAKKANAD, ERNAKULAM - 682 030.

¶204

3. THE SPECIAL TAHSILDAR (LAND ACQUISITION)

¶205

WA NO. 1250 OF 2014 & connected cases

¶206

¶207

NATIONAL HIGHWAY NO.3, VYTILLA,

¶208

ERNAKULAM- 682 019.

¶209

4. KOCHI METRORAIL CORPORATION BY MANAGING DIRECTOR, VYTILLA,

¶210

ERNAKULAM - 682 019.

¶211

BY ADVS. SRI.T.B.HOOD SMT.M.ISHA

¶212

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶213

WA NO. 1250 OF 2014 & connected cases

¶214

¶215

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶216

PRESENT

¶217

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶218

¶219

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶220

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶221

WA NO. 1818 OF 2014

¶222

AGAINST THE JUDGMENT IN WP(C) NO.9056/2014 OF HIGH COURT OF

¶223

KERALA, ERNAKULAM

¶224

APPELLANT/4TH RESPONDENT:

¶225

COMMISSIONER OF INCOME TAX (TDS) OFFICE OF THE COMMISSIONER OF INCOME TAX,

¶226

KOCHI C.R.BUILDINGS, I.S.PRESS ROAD,

¶227

KOCHI - 682 018.

¶228

BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶229

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶230

1 PAULSON PAULOSE AGED 38 YEARS, S/O.PAULOSE,

¶231

RESIDING AT CHAKYATH HOUSE,

¶232

CHERANALLORE P.O., KOCHI - 682 024.

¶233

2 THE DISTRICT COLLECTOR ERNAKULAM COLLECTORATE CIVIL STATION,

¶234

KAKKANAD, PIN - 682 030.

¶235

3 SPECIAL TAHASILDAR (L.A.) NO.1

¶236

WA NO. 1250 OF 2014 & connected cases

¶237

KOCHI RAIL PROJECT, CIVIL STATION, KAKKANAD, PIN - 682 030.

¶238

4 KOCHI METRO RAIL CORPORATION REPRESENTED BY ITS MANAGING DIRECTOR, VYTTILA, ERNAKULAM, PIN - 682 019.

¶239

BY ADV SELMA JANNATH FOR R1

¶240

BY SRI.R.SANJITH

¶241

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶242

WA NO. 1250 OF 2014 & connected cases

¶243

¶244

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶245

PRESENT

¶246

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶247

¶248

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶249

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶250

WA NO. 1819 OF 2014

¶251

AGAINST THE JUDGMENT IN WP(C) NO.4209/2014 OF HIGH COURT OF

¶252

KERALA, ERNAKULAM

¶253

APPELLANT/4TH RESPONDENT::

¶254

COMMISSIONER OF INCOME TAX (TDS) OFFICE OF THE COMMISSIONER OF INCOME TAX,

¶255

KOCHI C.R. BUILDINGS, I.S.PRESS ROAD,

¶256

KOCHI 682 018

¶257

BY ADV SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶258

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶259

1 JOSE P.SIMON AGED 52 YEARS, S/O.SIMON,

¶260

POWATH HOUSE,

¶261

KUMARAKOM P.O,

¶262

KOTTAYAM DISTRICT, PIN-686 563

¶263

2 DAISY SIMON AGED 47 YEARS, W/O.JOSE SIMON,

¶264

KUMARAKOM P.O,

¶265

KOTTAYAM DISTRICT, PIN-686 563.

¶266

WA NO. 1250 OF 2014 & connected cases

¶267

18 3 JOSE M.D. AGED 62 YEARS, S/O.DEVASSY, MALIYEKAL HOUSE, BEENA-ANCHUMANA ROAD, EDAPPALLY ROAD, KOCHI-682 024 4 THE DISTRICT COLLECTOR ERNAKULAM COLLECTORATE, CIVIL STATION, KAKKANAD, PIN- 682 030 5 SPECIAL TAHSILDAR (L.A.) NO.1 KOCHI RAIL PROJECT, CIVIL STATION, KAKKANAD, PIN-682030 6 KOCHI METRO RAIL CORPORATION REP.BY ITS MANAGING DIRECTOR, VYTTILA, ERNAKULAM, PIN 682019 BY ADVS. MS.JENCY SUSAN JOSE SMT.M.S.LETHA SRI.V.SRI NATH SRI.K.R.VINOD

¶268

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶269

WA NO. 1250 OF 2014 & connected cases

¶270

¶271

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶272

PRESENT

¶273

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶274

¶275

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

¶276

THURSDAY, THE 8^TH DAY OF JULY 2021 / 17TH ASHADHA, 1943

¶277

WA NO. 170 OF 2015

¶278

AGAINST THE JUDGMENT IN WP(C) NO.12207/2014 OF HIGH COURT OF

¶279

KERALA, ERNAKULAM

¶280

APPELLANT/4TH RESPONDENT::

¶281

COMMISSIONER OF INCOME TAX (TDS),

¶282

OFFICE OF THE COMMISSIONER OF INCOME TAX

¶283

KOCHI C.R. BUILDINGS, I.S.PRESS ROAD,

¶284

KOCHI 682 018

¶285

BY ADVS.

¶286

SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX

¶287

RESPONDENTS/PETITIONERS/RESPONDENTS 1 TO 3:

¶288

1. AHEMMED

¶289

AGED 62 YEARS, S/O KUNJAMMU

¶290

CHENNAMBILLIL HOUSE

¶291

KARIMBIN PURAYIDATHIL, CHOORNIKKARA KARA

¶292

THAIKKATTUKARA P.O.

¶293

WA NO. 1250 OF 2014 & connected cases

¶294

¶295

ALUVA WEST VILLAGE, ALUVA TALUK 683 106

¶296

2. THE DISTRICT COLLECTOR ERNAKULAM COLLECTORATE, CIVIL STATION,

¶297

KAKKANAD, ERNAKULAM - 682 030.

¶298

3. SPECIAL TAHSILDAR (LA) NO.1 KOCHI RAIL PROJECT, CIVIL STATION KAKKANAD PIN 682 030

¶299

4. KOCHI METRORAIL CORPORATION REP. BY ITS MANAGING DIRECTOR, VYTILLA,

¶300

ERNAKULAM - 682 019.

¶301

BY ADVS. SRI.T.B.HOOD SMT.M.ISHA

¶302

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08.07.2021, ALONG WITH WA.1250/2014 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶303

WA NO. 1250 OF 2014 & connected cases

C.R.

JUDGMENT

[WA Nos.1250/2014, 1295/2014, 1296/2014, 1538/2014, 1539/2014, 1728/2014, 1729/2014, 1818/2014, 1819/2014 & 170/2015]

¶308

Dated this the 8^th day of July,2021

¶309

Bechu Kurian Thomas, J.

¶310

The issue that arises for consideration in this batch of writ appeals relate to the question whether tax is liable to be deducted at source for amounts paid as compensation arrived at under negotiated settlements during acquisition of property. The learned Single Judge held that tax cannot be deducted at source under Section 194LA of the Income Tax Act, 1963 (for short, 'the Act') in respect of compensation paid to the land owners which was arrived at based on negotiated settlements.

¶311

The above question springs from proceedings for acquisition of land initiated under Section 11 of the Land Acquisition Act, 1894 (for short, 'the LA Act') for implementing the Kochi Metro Rail Project. After proceedings were initiated for the acquisition of property under the L.A.Act, negotiations were held and settlements

¶312

WA NO. 1250 OF 2014 & connected cases

¶313

¶314

were arrived at with the respective land owners by the District Level Purchase Committee. In effect consent awards were passed by the District Collector under Section 11(2) of the LA Act, pursuant to the agreement between the parties on the price payable for the land acquired as compensation. The writ petition was filed contending that the lands having been purchased by the Government, on the basis of negotiated settlements, there is no compulsory acquisition and hence Section 194LA of the Act was not applicable. Reliance was placed on the decisions reported in Info Park Kerala v. Asst. Commissioner of Income Tax [2008 (4) KLT 782] as well as in Thomas v. District Collector [2013 (3) KLT 941] .

¶315

The learned Single Judge upheld the claim of the writ petitioners and allowed the writ petitions by restraining the revenue officials from deducting any tax at source under Section 194LA of the Act, in respect of the compensation paid to the writ petitioners.

¶316

The learned counsel for the appellant at the threshold submitted that the issue involved in these appeals was considered by the Supreme Court in the decision reported in Balakrishnan v. Union of India and Others [(2017) 3 SCC 634] and held in favour of the appellants.

¶317

WA NO. 1250 OF 2014 & connected cases

¶318

¶319

Before we consider the aforesaid submission of the

¶320

learned counsel for the appellant, we wish to mention that the impugned judgment was rendered on 03.06.2014 and even though the appeal was admitted in 2014, there was no stay of operation of the judgment and accordingly the compensation amounts would have already been disbursed to the writ petitioners, in tune with the impugned judgment.

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Be that as it may, Section 194LA was inserted in the statute book by Finance Act 2004 With effect from 01-10-2004. The section reads as below:

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S.194LA. Payment of compensation on acquisition of certain immovable property :-

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Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten percent of such sum as income-tax thereon.

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Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed two lakh and fifty thousand rupees:

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Provided further that no deduction shall be made under this section where such payment is made in respect of any award or agreement which has been exempted from levy of income-tax under section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013).

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Explanation-For the purposes of this section,-

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(i) “agricultural land” means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;

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(ii) “immovable property” means any land (other than agricultural land) or any building or part of a building.

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A reading of the above section clearly shows that when compensation or consideration, as the case may be, for compulsory acquisition of any immovable property other than agricultural land becomes payable, the person responsible for paying such compensation or consideration shall be bound to deduct ten percent of such sum as income tax at the time of payment. The proviso to the section, as it then stood, further stipulated that the deduction need not be made, if the aggregate amount of such payment to the person during a financial year, does not exceed two hundred thousand rupees. It is obvious that the emphasis in the section is on the words ‘compulsory acquisition’. If the nature of acquisition is compulsory, then, irrespective of whether the amounts are paid as compensation or as consideration, the deduction becomes mandatory, provided the other conditions are applicable.

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Acquisition of property becomes compulsory in nature whenever and wherever property is obtained by the government,

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pursuant to proceedings initiated for land acquisition under the relevant land acquisition laws. Negotiated settlements arrived at with government or governmental bodies for transfer of property, after proceedings for acquisition have been initiated remain in the realm of compulsory acquisition. The decision to part with the property, which is the subject matter of a negotiated settlement, does not originate from any exercise of a free mind of the owner of the property. It stems from the compulsion imposed by proceedings for acquisition. The transfer of property remains in the nature of compulsory acquisition.

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The learned Single Judge relied upon a decision of the Division Bench of this Court in WA 2243 of 2008. We are afraid that the said decision no longer holds the field in view of the decision of the Supreme Court in Balakrishnan v. Union of India and others

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(2017) 3 SCC 634. In the said decision it was held that a land owner would have been compelled to divest himself of his land because of the compulsory acquisition and to avoid possible litigations, he would have entered into negotiation and settlement. The court also observed that, merely because the compensation amount payable for the land is agreed upon between the parties, the same will not change the

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character of the acquisition from that of compulsory acquisition to a voluntary sale. The decision which was relied upon by the learned Single Judge i.e. Info Park v. Asst. Commissioner of Income Tax [2008 (4) KLT 782] was overruled by the Supreme Court in the aforesaid case.

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For a better comprehension the observations of the Supreme Court in Balakrishnan 's case (supra) are extracted as below :

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It is in the aforesaid factual backdrop, this Court is to determine as to whether it can be treated that the land of the appellant was compulsorily acquired. From the facts mentioned above, it becomes apparent that the acquisition process was initiated by invoking the provisions of the LA Act by the State Government. For this purpose, not only Notification under Section 4 was issued, it was followed by declaration under Section 6 and even award under Section 9 of the LA Act. With the award, the acquisition under the LA Act was completed. Only thing that remains thereafter was to pay the compensation as fixed under the award and take possession of the land in question from the appellant. No doubt, in case, the compensation as fixed by the Land Acquisition Collector was not acceptable to the appellant, the LA Act provides for making a reference under Section 18 of the Act to the District Judge for determining the compensation and to decide as to whether the compensation fixed by the Land Acquisition Collector was proper or not. However, the matter thereafter is only for quantum of

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compensation which has nothing to do with the acquisition. It is clear from the above that insofar as acquisition is concerned, the appellant had succumbed to the action taken by the Government in this behalf. His only objection was to the market value of the land that was fixed as above. To reiterate his grievance, the appellant could have either taken the aforesaid adjudicatory route of seeking reference under Section 18 of the LA Act leaving it to the Court to determine the market value. Instead the appellant negotiated with Techno Park and arrived at amicable settlement by agreeing to receive the compensation in the sum of Rs.38,42,489. For this purpose, after entering into the agreement the appellant agreed to execute the sale deed as well which was a necessary consequence and a step which the appellant had to take.

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8. In our view, insofar as acquisition of the land is concerned, the same was compulsorily acquired as the entire procedure under the LA Act was followed. The settlement took place only qua the amount of the compensation which was to be received by the appellant for the land which had been acquired. It goes without saying that had steps not been taken by the Government under Sections 4 and 6 followed by award under Section 9 of the LA Act, the appellant would not have agreed to divest the land belonging to him to Techno Park. He was compelled to do so because of the compulsory acquisition and to avoid litigation entered into negotiations and settled the final compensation. Merely because the compensation amount is agreed upon would not change the character of acquisition from that of compulsory acquisition to the voluntary sale. It may be mentioned that this is now the procedure which is laid down

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even under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as per which the Collector can pass rehabilitation and resettlement award with the consent of the parties/landowners. Nonetheless, the character of acquisition remains compulsory.

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Thus it is ineludible that once the proceedings for acquisition are initiated under law, whatever be the nature of payment, whether as compensation for acquisition or as consideration for a negotiated settlement, the character of the acquisition remains compulsory in nature and hence Section 194LA of the Act will apply. The judgement in Balakrishnans’ case clearly covers situations of this nature. In the above circumstances, the judgment of the learned Single Judge is liable to be set aside. We do so, in all these appeals.

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As observed by us earlier, after the impugned judgment there was no stay of operation of the judgment and the compensation or consideration as the case may be would have been paid without deducting the TDS. We clarify that in cases where TDS was deducted before payment of consideration, the same is liable to be made over to the Income Tax Department. In cases where the consideration was paid without deduction of tax as per the

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judgment, it is needless to state that the judgment had worked itself out.

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With the above observations these appeals are disposed of.

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Sd/-

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S.V.BHATTI, JUDGE

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