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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
M/s. Hegde And Golay Pvt Ltd, Represented By Its Managing Director Rashme Hegde Gopi. – Appellant
Versus
Special Land Acquisition Authority – Respondent
Writ Petition No. 22773 of 2021 (LA-KIADB)
Decided on : 02-08-2022
Karnataka Industrial Areas Development Act - Section 28(4) - Income Tax Act, 1961 - Section 194-LA, 260A, 2 (15), 199, LA - Land Acquired - Compensation - Whether amount deducted under Section 194-LA of Income Tax Act and remitted to account of respondent would constitute income of respondent - Whether respondent can delay payment of amounts due to petitioner on ground that there is a dispute pending between respondent and Income tax department. [Para 15.4]
Finding of the Court: While making payment, Tax was deducted at Source in terms of Section 199-LA and remitted to tax account of KIADB - Provisions of Section 199 of Income Tax Act is clear inasmuch as any amount deducted as tax and remitted to Income tax department would form income of assessee on whose behalf tax has been deducted and remitted - Thus, for purpose of calculation of income both amount actually received and amount remitted to Income tax department after deduction at source would also amount to income of assessee, in this case assessee being KIADB - In view of above, not only is amount remitted as part of income but assessee could always seek for refund of amounts if in excess of income tax dues - Thus, Court is of considered opinion that amount though remitted to income tax department, amount stands to credit of KIADB and as such, would form part of income of KIADB – Court is unable to accept ‘out of pocket’ argument since amount already stands to credit of KIADB and there would be no question of being ‘out of pocket’- If KIADB is right in its submission, amount standing to its credit will be refunded - If KIADB is wrong in its submission, amount standing to its credit will be appropriated for income tax dues - Thus, concept of ‘pay when paid’ is alien to transaction at hand and is unacceptable or sustainable - Hence, Court answer point No.2 by holding that respondent KIADB cannot delay payment of amounts due to petitioner on ground that there is a dispute pending between respondent and Income Tax Department - Respondent No.2 is directed to make payment of a sum of Rs.1,36,86,042/-to petitioner within a period of eight weeks from date of receipt of copy of this order.
Result: Petition allowed.
ORDER :
1. The petitioner is before this Court seeking for following reliefs:
b) Pass any other order and issue any other Writ or direction that this Hon’ble Court deems fit, in the interest of justice and equity.
2. The petitioner claims to be a lease cum sale agreement holder for 7 acres 1 gunta of land in Sy.Nos.81/1, 81/2A, 81/2B 82/4A and 82/2P situated at Doddakallasandra Village, Uttarahalli Hobli, Bangalore South Taluk, Bangalore Urban District. The said lease cum sale agreement has been executed by respondent No.3-KIADB in favour of the petitioner on 13.01.2014. One other survey number in Sy.No.82/4B(P) being omitted in the lease cum sale agreement, a rectification deed came to be executed on 10.12.2014. Both the lease cum sale agreement as well as rectification deed has been registered before the jurisdictional Sub-Registrar.
3. A portion of the property was sought to be acquired for the project of Bengaluru Metro established by the Bengaluru Metro Rail Corporation Limited under the provision of The Karnataka Industrial Areas Development Act (KIADB Act). The final notification under Section 28(4) of KIADB Act came to be issued acquiring 13.40 sq.mtrs in Sy.No.81/1, 171.40 sq.mtrs in Sy.No.81/2B, 921.84 sq.mtrs in Sy.No.81/2A and 1049.82 sq.mtrs in Sy.No.8/1. Certain errors having been crept in the said errors were rectified in another final notification dated 16.06.2015.
4. The respondent No.1-Special Land Acquisition Officer has determined the compensation payable towards the above acquisition at Rs.13,68,60,419/-and made payment of the same to respondent No.3-KIADB on account of the fact that KIADB was shown as owner of the land being the lessor of the said property in favour of the petitioner.
5. The petitioner has at that time requested compensation amount be paid to respondent No.3-KIADB which is also made note of by respondent No.1 and respondent No.1 had directed payment of the said compensation to the petitioner vide order dated 23.03.2017 at Annexure – D to the petition in the event of the sale deed being executed in favour of the petitioner.
6. A sale deed came to be executed in respect of the aforesaid land on 06.07.2017 and registered in the jurisdictional Sub Registrar office on 10.07.2017. There being a mistake in the said sale deed a rectification deed came to be executed on 11.08.2017.
7. The petitioner contending that the petitioner’s land has been acquired would be entitled for the entire compensation of Rs.13,68,60,419/-as determined by respondent No.1 and laid a claim for the same, however, only an amount of Rs.12,31,74,377/-was paid by respondent No.3-KIADB to the petitioner on the ground that there is a TDS amount of Rs.1,36,86,042/-deducted by respondent No.1 in terms of Section 194-LA of the Income Tax Act, 1961 which cannot be paid at that relevant point of time.
8. The petitioner having received an amount of Rs.12,31,74,377/-requested for the balance payment also to be made, however, the same was not made and by letter dated 28.03.2018, the respondent No.3 has stated that amount of Rs.1,36,86,042/-had been remitted to the department of the income tax on behalf of the KIADB and that if the department of income tax after assessment refunds the TDS amount to the KIADB, the Board may consider to reimburse the same at that point of time.
9. It is aggrieved by the said letter dated 23.08.2018
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