The main legal point established in the judgment is that the income received for the property acquired through private negotiations and sale deed is exempted from tax under Sec. 96 of the Act, 2013, and the procedure for claiming refund of TDS.

JUDGMENT

1. Rule. Rule made returnable forthwith by consent of the parties.

2. The petitioner assails an action on the part of the respondent No.1 in deducting income tax at source from the compensation paid to the petitioner by the respondent No.1 for the acquisition of his land.

3. The petitioner claims to be the owner of certain plots of land situated at Bhiwandi, Thane. The respondent No.1 acquired the land of the petitioner purportedly under an agreement. The respondent No.1 deducted income tax at source from the compensation paid to the petitioner. The same appears to have been deducted on 23/10/2019. On or about 8/5/2020, a supplementary deed was entered into between the petitioner and the respondent under which some additional amount was paid to the petitioner and income tax was deducted at source from the said part of the compensation also. On or about 4/12/2020, the petitioner requested the respondent No.1 to reverse the tax deducted at source on the ground that no tax was deductable. On or about 24/12/2020, the respondent No.1 replied to the petitioner that exemption from income tax is not applicable in case of the land acquired from the petitioner and in any case, the income tax deducted at source from the petitioner was duly deposited with the Income Tax Department.

4. The learned Advocate for the petitioner submits that Sec. 96 read with Sec. 46 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as 'the Act, 2013') specifcally exempts payment of income tax on an amount of compensation paid under the award and/or agreement.

5. The learned Counsel submits that Sec. 46 of the Act, 2013 is not applicable in the present matter as the land is not purchased by a specifed person. The learned Counsel submits that the respondent No.1 ought not to have deducted the tax at source because the deduction of tax at source is applicable only where the amount is taxable in the hands of the recipient.

6. The learned Counsel further submits that no distinction is made between the compulsory acquisition resorting to the provisions of the Act, 2013 by issuing notifcation or by an acquisition through an agreement. The learned Counsel to buttress his submission relied upon the judgment of the Apex Court in the case of Balkrishnan Versus Union of India (2017) 80 taxmann.com 84 (SC) . Further reliance is placed on the judgment of the Division Bench of Kerala High Court in the case of K. Sreekumar Versus District Collector (Writ Application No. 1422 of 2015, dt. 18/1/2018) . Reliance is also placed upon the CBDT Circular dtd. 25/10/2016 to contend that the Central Board has also clarifed that the compensation received in respect of award or agreement is exempted from levying of income tax vide Sec. 96 of the Act, 2013 and shall not be taxable under the provisions of the Income Tax Act, 1961 (hereinafter referred to as, "IT Act"), even if there is no specifc provision of exemption for such compensation in the IT Act. It is further submitted that as the respondent No.1 was not supposed to deduct the tax at source, it is the respondent No.1 who should furnish a correction statement for rectifcation of the mistake. The learned Counsel relies upon Sec. 200 (3) of the IT Act. According to him, under Sec. 200(3), the deductor can furnish a correction statement for rectifcation. Sec. 200A (1) of the IT Act provides for processing of statement of tax deducted at source furnished by the deductor. Subclause (d) of Clause (1) of Sec. 200A of the IT Act, further provides for refund of excess tax deducted at source by the deductor. It is submitted that after processing the statement or correction statement furnished by the deductor, the refund can be granted. The respondent No.1 be directed to furnish the correction statement of the tax deducted at source and the amount deducted be paid to the petitioner.

7. The learned Advocate for respondent No.1 submits that amount