ORDER :

The present writ petition is filed under Article 226 of the Constitution of India for the following relief :

“....pleased to issue Writ of Mandamus to declare the proceedings of the 2nd respondent issued in G.O.Rt.No.525 Water Resources (LAA2) Dept., dated 13.08.2015 so far as directing the 4th and 5th respondents to deduct Income tax from the decretal amounts of the petitioners in O.P. Nos.543/2003, O.P. No.544/2003 and O.P. No.545/2003 on the file of the Learned Principal Senior Civil Judge, Nandyal, Kurnool District as illegal, arbitrary, discriminatory and contrary to the circular dated 13.04.2011 issued by the 1st respondent and consequently to direct the 4th and 5th respondents to deposit the entire decretal amounts of the petitioners in their accounts in O.P. No.543/2003, O.P.No.544/2003 and O.P. No.545/2003 on the file of the learned Principal Senior Civil Judge, Nandyal, Kurnool District to the tune of Rs.4,89,65,362/- without deducting Income tax and pass such other order or orders...”

2. The brief facts of the case are that the 4th respondent herein had acquired the properties of the petitioners as mentioned above and also passed an award vide No.34/2001-02 dated 03.12.2001. It is the further case of the petitioners that against the award, the petitioners sought for reference under Section 18 of the Land Acquisition Act. The said application was numbered as L.A.O.P. No.543/2003 of the petitioners herein, in which the award amount was enhanced by the Court below. Against the said application, the 5th respondent preferred the first appeals. Thereafter, the cross-appeals filed by the petitioners herein are allowed and appeals filed by the respondents were set aside vide common judgment dated 26.9.2008, in which the award amount is enhanced to Rs.4,00,000/-per acre from Rs.2,78,000/-per acre by the Court below. Against the same, the 5th respondent preferred Special Leave Petition before the Hon'ble Apex Court. The said SLP was ended by way of dismissal vide orders dated 14.11.2014. At last, the 2nd respondent issued G.O.Rt.No.525 Water Resources (LA.A2) Department, dated 13.08.2015, in which an amount of Rs.4,89,65,362/-was sanctioned as decretal charges out of 3 cases of the petitioners. It is further the case of the petitioners that while depositing the said amount, respondent Nos.4 and 5 are directed to deduct income tax at the rate of 10.3% against the decretal amount as stated above. It is the further case of the petitioners that the said deduction is against the provisions of the Income Tax Act, 1961. Hence, the writ petition.

3. The learned counsel for the petitioners would submit that the amount which was paid towards the acquisition of agricultural land of the petitioners is not a capital asset as defined under Section 2 (14)(iii) of the Income Tax Act and therefore, the said amount is not liable for deduction of Tax under the provisions of the Income Tax Act. The other contention of the petitioners is that Section 194 of the Fair Compensation in Land Acquisition, Rehabilitation and Resettlement (Act 30 of 2013) Act, 2013 specifically envisages that no tax can be levied against the rates of agricultural lands under land acquisition proceedings. Then, the other contention of the petitioners is that even though there is no specific provision under the provisions of the old Land Acquisition Act, 1894, but there is no specific authorization under the provisions of the Income Tax Act authorizing the respondents herein for deduction of tax from the land acquisition proceeds against the agricultural lands. It is further contended that there is a specific bar under Act 30 of 2013 for imposing any tax from the acquisition proceeds in respect of agricultural lands. Therefore, the same analogy can be drawn even for the acquisition proceedings which were initiated under the provisions of Act, 1894. The learned counsel for the petitioners also relied upon a judgment rendered by this Hon'ble Court in C. Nanda Kumar V. Un