Mohan vs Government of India and Another

Anoop v. Mohta, J.—The State of Maharashtra acquired the lands and the Land Acquisition Officer by an order dt. 8-2-1988 passed the award. The petitioner preferred reference u/s 18 of the Land Acquisition Act sometime in the year 1989. By its judgment dt. 13-1-1993 enhanced compensation was awarded by the Civil Court. Sometime in April, the State of Maharashtra preferred appeals in the High Court. Same have been admitted and pending. The petitioners, however, were permitted to withdraw the decretal amount on furnishing solvent security to the satisfaction of the Civil Court. There is no finality attained to the said award as appeal is still pending. Therefore, the right to receive the amount of compensation and interest is still unsettled.

Respondent No. 2, pending this, sometime in June, 1995 issued notice to the petitioner directing him to file the returns of the Income Tax as petitioner received the amounts pursuant to the award dt. 13-1-1993. The petitioner accordingly filed return and paid the Income Tax under protest and thereafter filed the present writ petition as in view of already decided cases such demand ought not to have been made by respondent No. 2.

Therefore, considering the fact that this Court in identically placed matters, where the issues are also same, by relying on the various judgments of Supreme Court, as well as this Court, which are as:

I. Writ Petn. No. 938/1998 : Smt Kironbai v. CIT and Anr. decided on 27-9-2007.

II. Commissioner of Income Tax, West Bengal-II, Calcutta Vs. Hindustan Housing and Land Development Trust Ltd.,

III. Director of Income Tax (Exemption), New Delhi Vs. Goyal Charitable Trust,

IV. Harish Chandra and others Vs. Commissioner of Income Tax, ,

principally observed that when the Government has appealed against the award and the additional amount of compensation is deposited in the Court, it is not taxable at that stage as the additional compensation would not accrue as income, when it is specifically disputed by the Government in appeal. The demand, therefore, as raised by notice dt. 8-10-1998 (Annex. I) is unsustainable. The demand is, therefore, impermissible as it is premature also. It is quashed accordingly.

So far as prayer Clause (ii) is concerned, the petitioner is not pressing as he has already preferred appeal against those assessment orders.

In view of this, the present petition is allowed in terms of prayer Clause (i) only, which reads as under:

(i) it be held that, the proceedings for recovery of amount from the petitioner towards the payment of Income Tax initiated by the respondent No. 2 is illegal and invalid being premature.

Rule is made absolute accordingly with no order as to costs.