Section 96 income-tax exemption limited to acquisitions under the 2013 land law; Karnataka Highways Act compensation remained taxable.

Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was held to apply only to awards or agreements made under that Act itself, so compensation for land acquired under the Karnataka Highways Act, 1964 did not qualify for income-tax exemption merely because payment was made after the 2013 Act commenced. The relevant acquisition date remained the initial 2012 notification, and later awards or Government orders could not retrospectively bring the matter within section 96. Refund of tax deducted at source did not render the Revenue's appeals infructuous, because refund did not extinguish the pending challenge.

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Issues: (i) Whether section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 exempts compensation from income tax when the acquisition was made under the Karnataka Highways Act, 1964; (ii) whether the acquisition became governed by the 2013 Act because the awards and Government Order came after its commencement; (iii) whether the appeals had become infructuous because the tax deducted at source had been refunded.

Issue (i): Whether section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 exempts compensation from income tax when the acquisition was made under the Karnataka Highways Act, 1964.

Analysis: The exemption in section 96 is confined to awards or agreements made under the 2013 Act itself. The provision is textually clear and cannot be expanded to cover acquisitions made under other enactments. The 2013 Act does not repeal State acquisition laws; rather, sections 103, 105 and 107 preserve their operation. The land acquired under the Karnataka Highways Act, 1964 therefore does not fall within the exemption merely because compensation is paid after the 2013 Act came into force.

Conclusion: The exemption under section 96 is not available to acquisitions made under the Karnataka Highways Act, 1964.

Issue (ii): Whether the acquisition became governed by the 2013 Act because the awards and Government Order came after its commencement.

Analysis: The relevant point of time is the initial notification initiating acquisition. Since the acquisition was notified in 2012, before the 2013 Act commenced, the later awards and executive instructions could not retrospectively attract section 96. Executive action cannot enlarge fiscal exemption where the statute does not permit it, and the doctrine of reading down cannot be used to rewrite an express taxing exemption.

Conclusion: The acquisition remained governed by the earlier State statute and section 96 of the 2013 Act did not apply.

Issue (iii): Whether the appeals had become infructuous because the tax deducted at source had been refunded.

Analysis: Refund of tax in some cases, especially where made under compulsion or for parity, does not extinguish the Revenue's right to pursue pending appeals. Compliance with an order does not make an appeal legally void, and restitution remains possible if the appeal succeeds. The plea of infructuousness therefore failed.

Conclusion: The appeals did not become infructuous on account of refund of TDS.

Final Conclusion: The compensation paid for land acquired under the Karnataka Highways Act, 1964 was held taxable, the exemption under section 96 of the 2013 Act was denied, and the land-losers' writ petitions stood dismissed.

Ratio Decidendi: Section 96 of the 2013 Act applies only to awards or agreements made under that Act and cannot be extended by interpretation or executive action to acquisitions made under other statutes.

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