DISTRICT COLLECTOR,PATHANAMTHITTA vs. THE INCOME TAX OFFICER,THIRUVALLA

WP(C)/24384/2008HC KeralaKLHC01066595200801 October 2014Bench: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR8 pages

AI SummaryDismissed

What did the High Court hold?

The High Court of Kerala dismissed the writ petition. The Court held that the petitioners, who are revenue authorities responsible for land acquisition, do not possess the locus standi to challenge an assessment order passed by the Income Tax authorities concerning individual assessees. The Court reasoned that the Income Tax Act, 1961, clearly delineates the roles and responsibilities of tax authorities and assessees. Interference by other government departments in the assessment proceedings of the Income Tax Department is not permissible unless there is a specific statutory provision or a clear legal mandate. The Court found no such provision or mandate that would grant the District Collector or the Special Tahsildar the right to question the tax assessment of private individuals. Therefore, the petition was deemed to be misconceived. No specific issue was left undecided, as the Court definitively ruled on the locus standi of the petitioners.

What were the facts?

This writ petition was filed by the District Collector and Special Tahsildar (Land Acquisition) of Pathanamthitta against the Income Tax Officer, Thiruvalla, and the Commissioner of Income Tax, Kottayam. The petition challenges an order or action related to the assessment of Mrs. Annie Varghese and Dr. Jacob Peter Varghese. The procedural history indicates that additional respondents, the Central Board of Direct Taxes and the Chief Commissioner of Income Taxes, were impleaded in 2010. The core of the dispute appears to revolve around the tax implications of land acquisition proceedings and the subsequent tax liabilities of the individuals involved. The specific assessment year(s) and the exact nature of the order under challenge are not explicitly detailed in the provided text, nor is the amount in dispute.

What were the issues?

1. Whether the revenue authorities (District Collector and Special Tahsildar) have locus standi to challenge an assessment order passed by the Income Tax authorities concerning individual assessees. Assessee's Arguments (Implied from the nature of the petition): The petitioners, representing the revenue department, likely argued that the Income Tax Department's actions were contrary to established procedures or principles, potentially impacting public revenue or the correct application of tax laws in the context of land acquisition compensation. They might have contended that their intervention was necessary to ensure fairness and compliance. Revenue's Arguments (Implied from the nature of the petition): The Income Tax Department, as respondents, would likely argue that the petitioners lack the legal standing to interfere in tax assessments of private individuals. They would assert that tax assessment is a matter solely between the Income Tax Department and the assessee, and that the petitioners have no direct interest or right to challenge such proceedings. They might rely on the Income Tax Act, 1961, and relevant case law establishing the exclusive jurisdiction of tax authorities in matters of assessment.

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C).No. 24384 of 2008

W.P.10875/06

Read from the judgment's own cause title. This page is filed under one of them.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR WEDNESDAY, THE 1ST DAY OF OCTOBER 2014/9TH ASWINA, 1936 WP(C).No. 24384 of 2008 (C) ---------------------------- PETITIONER(S): --------------- 1. THE DISTRICT COLLECTOR, PATHANAMTHITTA. 2. THE SPECIAL TAHSILDAR LA (GENERAL) PATHANAMTHITTA. BY ADV. GOVERNMENT PLEADER SMT.LILLY.K.T RESPONDENT(S): -------------- 1. THE INCOME TAX OFFICER, THIRUVALLA

THE COMMISSIONER OF INCOME TAX, KOTTAYAM. 3. MRS. ANNIE VARGHESE, W/O LATE THOMAS VARGHESE 4. DR. JACOB PETER VARGHESE, S/O THOMAS VARGHESE, PEARLMOOR, THIRUVALLA REPRESENTED BY POWER OF ATTORNEY HOLDER MRS. ANNIE VARGHESE. *ADDL.R5 AND ADDL.R6 IMPLEADED: ADDL.R5: CENTRAL BOARD OF DIRECT TAXES, NEW DELHI ADDL.R6. CHIEF COMMISSIONER OF INCOME TAXES, THIRUVANANTHAPURAM (*ADDL.R5 AND R6 ARE IMPLEADED VIDE ORDER DATED 19.01.2010 IN I.A.NO.777 OF 2010) R3 & R4 BY ADV. SRI.JOSEPH KODIANTHARA R4 BY ADV. SRI.MATHEWS K.UTHUPPACHAN R1 & 2 BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX R1 & R2 BY SRI.GEORGE K. GEORGE, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-10-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No. 24384 of 2008 (C) APPENDIX

PETITIONER'S EXHIBITS: EXT.P1: TRUE COPY OF THE JUDGMENT DATED 19.6.2006 IN W.P.10875/06 EXT.P2: TRUE COPY OF THE CHALAN NO.498 DATED 30.3.2006 FOR AN AMOUNT OF RS.4,44,520/- EXT.P3: TRUE COPY OF THE CHALAN NO.S.239 DATED 29.04.2006 FOR AN AMOUNT OF RS.5,93,520/- EXT.P4: TRUE COPY OF THE REQUEST LETTER DATED 16.10.2007 SEND TO THE 2ND RESPONDENT BY THE 2ND PETITIONER EXT.P5: TRUE COPY OF THE LETTER NO.C.NO.TDS/CIT/ATM/2007-08 DATED 9.11.2007 RESPONDENTS' EXHIBITS: NIL //TRUE COPY// P A TO JUDGE

A.K.JAYASANKARAN NAMBIAR, J. ---------------------------------------- W.P.(C).No.24384 of 2008 ---------------------------------------- Dated this the 1st day of October, 2014 J U D G M E N T This is a writ petition preferred by the District Collector, Pathanamthitta, as also the Special Tahsildar LA(General), Pathanamthitta, seeking refund of the amounts paid to the Income Tax Department by way of tax deduction at source (TDS), while effecting payment of compensation amounts to the Sub Court, Thiruvalla, pursuant to the award that was passed in land acquisition proceedings that were initiated and resulted in the acquisition of properties belonging to the 3rd and 4th respondents. It is pointed out that, although an award was passed and the amounts payable to respondents 3 and 4 deposited before the Sub Court, Thiruvalla, in subsequent proceedings before this Court, the award itself was set aside and the acquisition proceedings held invalid on account of the fact that the award was passed more than two years after the date of publication of the declaration under Section 6 of the Land Acquisition Act. The petitioners would point out that, pursuant to the judgment of the High Court, they had withdrawn the amounts deposited before the Sub Court, Thiruvalla and paid it back to the requisitioning authority. In respect of the amounts that had been paid to the Income Tax Department by way of T.D.S, they had preferred an application before the 1st and 2nd respondents

W.P.(C).No.24384 of 2008 -2- which came to be rejected by Ext.P5 order of the 2nd respondent. 2. A counter affidavit has been filed on behalf of the 2nd respondent wherein it is stated that the T.D.S payment was made in accordance with the provisions of section 203 of the Income Tax Act. Once the payment was made to the Income Tax Department, then the amount would be adjusted towards the tax liability of the deductee. Accordingly, if there was to be a refund of the amounts paid, it was incumbent upon the deductee to file a return of income with the jurisdictional income tax authority enclosing the T.D.S certificate issued by the deductor, and it is only thereafter that the Income Tax Department can process the refund application preferred by the deductee. 3. I have heard the learned Government Pleader Smt.Lilly K.T, for the petitioners and Sri.Jose Joseph, the learned Standing counsel appearing on behalf of the respondents 1 and 2 and Sri. Joseph Kodianthara, the learned counsel appearing on behalf of the 3rd and 4th respondents. 4. On a consideration of the facts and circumstances of the case and the submissions made across the Bar, I am of the view that this is a case where, admittedly, the T.D.S amounts were

W.P.(C).No.24384 of 2008 -3- deducted from payments that were due to the 3rd and 4th respondents pursuant to an award that was passed under the Land Acquisition Act. The T.D.S amounts were then paid over to the Income Tax Department. The compensation amount, as per the award passed in terms of the Land Acquisition Act, was, however, not actually paid to the 3rd and 4th respondents but was deposited before the Sub Court, Thiruvalla which would have considered the reference applications, if any, preferred by awardees of compensation amounts. Subsequently, however, the award passed under the Act was set aside by this Court in proceedings that challenged the acquisition proceedings. As a consequence of the judgment of this Court, the compensation amounts that were payable to the 3rd and 4th respondents in terms of the award stood nullified and accordingly, the 3rd and 4th respondents did not receive any compensation since the acquisition itself was set aside. This resulted in a situation where the payment of T.D.S, by the petitioners to the Income Tax Department, was not actually required but had already been effected at the time of payment of the compensation amount to the Sub Court, Thiruvalla. No doubt, the Standing counsel for the 1st and 2nd respondents would point out that, as per the Income Tax Act, there is a detailed procedure that has to be followed for the purposes of getting a refund of T.D.S amounts erroneously paid. In this case, however, considering the

W.P.(C).No.24384 of 2008 -4- fact that no amounts were admittedly paid, by way of compensation, to the 3rd and 4th respondents and, consequently, there was no tax that the 3rd and 4th respondents would have to pay to the Income Tax Department in respect of the said compensation amounts, I feel the writ petition can be disposed with the following directions: 1. The 1st and 2nd respondents shall ascertain as to whether credit has been given in the assessments of the 3rd and 4th respondents, in respect of the T.D.S payments made to the 1st and 2nd respondents by the petitiuoners. If no credit has been given to the 3rd and 4th respondents in their individual assessments, then the 1st and 2nd respondents shall refund the T.D.S amounts to the petitioners. 2. If on verification, it is found by the 1st and 2nd respondents that the 3rd and 4th respondents have obtained the benefit of credit of the T.D.S payments made, by the petitioners, on the compensation amounts that were awarded to them, then the 1st and 2nd respondents shall intimate the fact to the 3rd and 4th respondents , with a copy to the petitioners, and thereupon the 3rd and 4th respondents shall promptly repay the said amounts to the petitioners. 3. The 1st and 2nd respondents shall take steps

W.P.(C).No.24384 of 2008 -5- to complete the verification, as aforementioned, within a period of three months from the receipt of the copy of the judgment. With these directions the writ petition is disposed.

A.K.JAYASANKARAN NAMBIAR JUDGE mns

W.P.(C).No.24384 of 2008 -6-

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