AI Drafter 
TaxTMI 
TaxTMI 
2025 (5) TMI 978
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....e case of the Petitioner that, for the Assessment Year (A.Y.) 2017-18, land belonging to the Petitioner was acquired on 11.08.2016 by the National Highways Authority of India (NHAI). Pursuant thereto, the Petitioner received compensation amounting to Rs. 10,11,60,371/-.From the said compensation, an amount of Rs. 1,01,16,037/- was deducted by the deductor towards Tax Deducted at Source (TDS).The Petitioner contends that the said income was exempted u/s. 10 (26AAB) of the Income Tax Act, 1961, and therefore, the deduction of TDS was unwarranted. Consequently, the Petitioner became entitled to a refund of the said amount. It is further contended that although the deduction of TDS was effected on 13.02.2017, the same was communicated to the Petitioner only in December 2018. 3.2 The due date for filing the return of income for the relevant Assessment Year was 31.07.2017, which stood extended to 05.08.2017. The Petitioner submits that, having been apprised of the TDS deduction only in December 2018, which was subsequent to the due date for filing the return of income, it was not feasible to file the return within the stipulated period. Accordingly, the Petitioner preferred an applica....
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....th statutory interest. C. The Hon'ble Court may issue directions to Respondent to direct the concerned Assessing Officer to allow Petitioner to file the return the of income by exercising the power u/s 119 (2) (b) and grant the refund subject to verification of the claims made by the Petitioner. D. Award the cost of this petition. E. Grant such other and further reliefs as this Hon'ble Court deems fit." 5. Mr. Darshan R. Patel, learned advocate appearing for the Petitioner has submitted that the Petitioner's application to condone the delay in filing the Income Tax Return (ITR) for the Assessment Year 2017-18 has the inevitable effect of the Department being unjustly enriched at the cost of the Petitioner, inasmuch as, on merits, the refund to the Petitioner is due and payable and yet the same cannot be processed because the return for the Assessment Year 2017-18 is delayed and the delay has been refused to be condoned only on the ground that "no documentary evidence has been brought on record by the Assessee to establish that there was indeed a genuine hardship faced by the Assessee in filing of the ROI". 6. Mr. Karan G.Sanghani, learned Se....
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.... of the land in question by the Surat Municipal Corporation as per the award passed by the Civil Judge, Senior Division under the provisions of the Land Acquisition Act, 1894. It is also apparent from the material place on record that the Petitioner received the compensation in the month of September 2021 after the order of determining the share of the Petitioner passed by the Court on 04.09.2021. The Petitioner therefore could not show the amount of compensation in the original return filed on 04.01.2021. The Petitioner therefore was prevented by sufficient cause to claim the refund of the amount of tax deducted at source by the Surat Municipal Corporation at the time of deposit of the compensation with the Court. In such circumstances, the Respondents-authorities ought to have allowed the application of the Petitioner to condone the delay in filing the revised return to claim the refund of the TDS of Rs. 37,40,330/- deposited by the Surat Municipal Corporation. The reasoning given by the Respondents-authorities while rejecting the application do not commensurate with the facts of the case inasmuch as the Respondents have failed to consider that the compensation received by the Pe....
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....er to issue refund with interest on the amount of refund claim from the date of deposit by the Executive Engineer, Irrigation department till the date of granting of refund. 10. For passing such direction of issuance of the refund with interest under section 244A of the Act, similar reasons as given by this Court in case of Special Civil Application No.12466/2021 and other allied matters are adopted and reproduced as under: "8. The Hon'ble Apex Court in case of Union of India v. Hari Singh and others (Judgment dated 15.09.2017 passed in Civil Appeal No. 15041/2017) reported in (2018) 15 SCC 201, observed as under: "2. An admitted fact which is common in all these appeals is that while disbursing the compensation, the Land Acquisition Collector had deducted the tax at source and deposited the same with the Income Tax Department. These appellants preferred the writ petition in the High Court stating that no such deduction at source was permissible in view of the provisions of Section 194-LA of the Income Tax Act, 1961, since the land which was acquired was agricultural land and this provision categorically mentions that in respect of agricultural land, tax ....
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....that the compensation was received in respect of agricultural land, the tax deposited with the Income Tax Department shall be refunded to these Respondents. 7.2 While determining as to whether the compensation paid was for agricultural land or not, the Assessing Officer(s) will keep in mind the provisions of section 28 of the Land Acquisition Act and the law laid down by this Court in Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) [2009 (8) SCC 412] in order to ascertain whether the interest given under the said provision amounts to compensation or not" 10. In view of the above decision, the Income Tax department has allowed the application made by the applicant to condone the delay in filing the return of the income to claim the refund and also issued the refund. However, the Respondent did not grant any interest on the amount of refund though the delay cannot be said to be attributable to the Petitioners in the facts of the case. 11. Instruction No. 7/2013 dated 15.07.2013 was issued pursuant to the directions issued by the Delhi High Court in the case of Court On its Own Motion v. Commissioner of Income Tax (supra), that in no case interest u....
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.... Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar benefit to a resident/ deductor who has deducted tax at source and deposited the same before remitting the amount payable to a non-resident/ foreign company. 38. Providing for payment of interest in case of refund of amounts paid as tax or deemed tax or advance tax is a method now statutorily adopted by fiscal legislation to ensure that the aforesaid amount of tax which has been duly paid in prescribed time and provisions in that behalf form part of the recovery machinery provided in a taxing Statute. Refund due and payable to the assessee is debt-owed and payable by the Revenue. The Government, there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. T....
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....ceedings resulting in the refund are not delayed for reasons attributable to the assessee whether wholly or in part, the period of the delay so attributable only can be excluded from the period for which interest is payable under sub-sections (1) or (1A) or (1B) to section 244A of the Act, 1961. In the facts of the case, the words "or the deductor, as the case may be," which is inserted with effect from 01.04.2017 would not be applicable as the Petitioners have been permitted to file the refund claim for the AY 2013-2014 after condonation of delay and such delay in claiming the refund cannot be said to be attributable to the Petitioners as the Petitioners were not made aware about the deduction of tax at source by the deductor in absence of issuance of Form No.16-A which was mandatorily required as per Rule 31 (3) of the Rules." In view of the foregoing reasons, the petitions succeed and are accordingly allowed. The Respondents are directed to pass the order to condone the delay in filing the return for the Assessment Year 2013-2014 and to issue the refund with interest under section 244A of the Act, 1961 from the date of deposit of the amount of TDS till date of payment o....