TaxTMI 
TaxTMI 
2026 (2) TMI 1193
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...., Senior Standing Counsel). For the Respondents (By Sri Ojaswi, Advocate for Sri K. V. Dhananjay, Advocate For R1). ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE K. V. ARAVIND) Heard Sri Aravind V. Chavan, learned Senior Standing Counsel for the appellants and Sri Ojaswi, learned counsel for Sri K.V. Dhananjay, learned counsel for respondent No. 1. 2. This intra-court appeal is filed under Section 4 of the Karnataka High Court Act by the Income-tax Department, challenging the order dated 20.11.2025 passed in Writ Petition No. 30804/2024. 3. Respondent No. 1 filed writ petition with the following prayers; "a) Issue a writ of mandamus or any other appropriate writ declaring that Section 96 of the Right to Fair Compens....
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....red by the Special Land Acquisition Officer for the purpose of formation of a National Highway, and tax was deducted at source (TDS) to the extent of Rs. 16,00,000/- from the compensation amount paid. It was further contended that, in view of Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short, 'the 2013 Act'), the compensation awarded is exempt from payment of income tax, and consequently, the amount deducted towards TDS is liable to be refunded. 4.1 The learned Single Judge, following the earlier orders passed by this Court in similar matters, held that the compensation paid by the National Highways Authority towards acquisition of land under th....
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....nal Highways Act is not eligible to income tax and that no TDS is liable to be deducted thereon, respondent No. 1 had proceeded on a bona fide belief that the TDS deducted had remained with the Department. On such belief, the writ petition came to be filed seeking refund of the said amount along with a declaration that the compensation is not exigible to income tax. It is therefore contended that the writ petition was filed by respondent No. 1 under a bona fide belief that no refund had been issued by the appellants. 7. We have considered the submissions of learned counsel for the parties and perused the record. 8. Respondent No. 1 preferred the writ petition on 06.11.2024 seeking a direction to refund the TDS deducted from the compen....
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....e said refund on 23.11.2022 has been confirmed by respondent No. 1 in the email dated 12.12.2025. 11. Despite such confirmation of credit of the TDS amount, no steps were taken by respondent No. 1 to seek recall of the order passed by the learned Single Judge, which had been obtained on the basis of incorrect and misleading facts, until the filing of the memo on 09.01.2026 and the listing of the matter before this Court on 09.02.2026. 12. It appears that, had the appellants not placed on record the memo along with the material evidencing confirmation of the refund, respondent No. 1 would have proceeded to avail the benefit of the order passed by the learned Single Judge. The direction issued by the learned Single Judge, in effect, res....
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.... having presented the writ petition on the basis of misleading or incomplete facts. Moreover, the contents of the said memo are conditional in nature. 16. We find sufficient material on record to reasonably infer that, despite having knowledge of the refund already credited, respondent No. 1 attempted to secure a second refund of the tax amount by placing reliance on the pronouncements of this Court regarding the taxability, or otherwise, of compensation awarded on acquisition of land. 17. In view of the foregoing, the order of the learned Single Judge, having been obtained on the basis of misleading and incorrect facts, cannot be sustained in law and is accordingly set aside. We are constrained to make the above observation, as the o....