High Court Orders Timely Decision on Rectification Application

The High Court directed the Jurisdictional Assessing Officer to decide on the pending rectification application within six weeks from the date of the judgment. The petitioner was granted liberty to seek further legal remedies if the decision by the JAO was unfavorable. The pending application was to be closed, and parties were instructed to act based on the digitally signed copy of the order.

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Issues involved:
The judgment concerns a writ petition related to the Assessment Year (AY) 2020-21 involving the imposition of income tax on compensation and interest received by the petitioner from the National Highways Authority of India (NHAI) under the National Highways Act, 1956.

Details of the Judgment:

Issue 1: Tax Deduction at Source (TDS) on Compensation and Interest:
The petitioner received compensation and interest from NHAI for the acquired land, which NHAI subjected to TDS. Initially, there was an error in depositing TDS for the principal amount for AY 2020-21, but NHAI rectified this mistake. The petitioner had also filed a rectification application seeking credit for TDS amounts of Rs. 8,48,84,800 and Rs. 2,25,352 for the relevant year.

Issue 2: Processing of Return under Section 143(1) of the Act:
The petitioner's return for AY 2020-21, claiming exemption from tax on the compensation and interest received, was processed under Section 143(1) of the Act. However, the intimation served on the petitioner raised a demand of Rs. 2,95,490 without giving credit for TDS on compensation.

Issue 3: Pending Rectification Application:
The petitioner had filed a rectification application seeking various reliefs, including giving credit for TDS amounts, rectifying the outstanding demand, and granting a refund. The application was pending consideration, and a previous rectification application had led to the scaling down of the demand to Rs. 16,440.

Decision:
The High Court directed the Jurisdictional Assessing Officer (JAO) to decide on the pending rectification application dated 18.08.2022 within six weeks from the date of the judgment. The petitioner was granted liberty to seek further legal remedies if the decision by the JAO was unfavorable. The pending application was to be closed, and parties were instructed to act based on the digitally signed copy of the order.

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