IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 21ST JUNE 2010 / 31ST JYAISTHA 1932 WP(C).No. 12347 of 2010(P) -------------------------- LAR.260/2007 of ADDL.SUB COURT,PARAVUR .................... PETITIONER: --------------- GEORGE, S/O.PATHROSE, AGED 52 YEARS, UTHUPPAN HOUSE, ERUMELI KARA, KUNNATHUNADU VILLAGE KUNNATHUNADU TALUK, ERNAKULAM DISTRICT. BY ADV. SRI.ALEXANDER JOSEPH RESPONDENTS: --------------- 1. STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, ERNAKULAM. 2. THE REVENUE DIVISIONAL OFFICER, MUVATTUPUZHA. 3. THE CHIEF MANAGER,POWER GRID CORPORATION OF INDIA LTD., NEAR POLICE STATION, KAKKANADU, ERNAKULAM. 4. COMMISSIONER OF INCOME TAX, ERNAKULAM. GOVERNMENT PLEADER SRI. MATHEW GEORGE VADAKKEL R3 BY ADV. SRI.MILLU DANDAPANI R4 BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. ................................................... WP (C) No. 12347 of 2010 ............................................... Dated this the 21st day of June, 2010 J U D G M E N T ------------------------ The petitioner is aggrieved of the deduction of 10% of the compensation deposited by the requisitioning authority in the Land Acquisition Court towards the income tax, which according to the petitioner is not permissible to be deducted, the land in question being an 'agricultural land' and is clearly excluded from the provisions of deduction of tax under Section 194 LA of the Income Tax Act. 2. The sequence of the events as narrated in the Writ Petition shows that, the property of the petitioner was acquired in connection with the establishment of 'Sub station for the Power Grid Corporation of India', who is the third respondent herein. The property is situated in Pallikkara Village in Ernakulam District. On acquisition of the property pursuant to the notification issued under the 2 WP (C) No. 12347 of 2010 relevant provisions of the Land Acquisition Act, the compensation was awarded by the Land Acquisition Officer. Being aggrieved of the inadequacy of the quantum, it was caused to be referred under Section 18, pursuant to which the matter was considered by the reference Court and the compensation was enhanced. The entire compensation so enhanced by the reference Court was deposited by the third respondent along with the compensation payable in other cases as well (which were considered and dealt with by the reference Court, by passing a common verdict in 33 cases). However, while submitting Exhibit P1 letter along with the statement as to the particulars of the compensation payable, the third respondent also made a stipulation to deduct the income tax payable as per the statute, which according to the petitioner is not correct or sustainable and is under challenge in this Writ Petition. 3. The learned counsel for the petitioner submits that, pursuant to the deposit of the compensation 3 WP (C) No. 12347 of 2010 amount, the petitioner preferred a cheque application for the entire amount, which however was not accepted by the Execution Court, observing that it was not proper. This made the petitioner to submit a subsequent cheque application limiting the same to 90% of the compensation and got it disbursed. Subsequently, the petitioner preferred Exhibit P2 cheque application for the remaining 10%, which is the subject matter of dispute and the petitioner has come up with a prayer to direct the Sub Court to consider and pass orders on Exhibit P2, also seeking to declare that the compensation amount deposited in LAR 260/07 as per Exhibit P1 is not liable to be withheld towards the payment of income tax. 4. Learned counsel for the petitioner submits that, the contentions of the petitioner are mainly two folds, firstly that, the income tax can only be in respect of the interest amount and not on the entire compensation. Since the interest portion has been separately dealt with and given by the third respondent as per Exhibit P1, it is 4 WP (C) No. 12347 of 2010 not a matter of ambiguity, which ought to have been considered and acted upon without any delay. The next contention is that the property belonging to the petitioner, which was acquired on behalf of the third respondent, is an 'agricultural property' and hence the mandate under Section 194 LA of the Income Tax Act is not applicable, by virtue of the exemption provided in the said provision. It is also stated that the term 'agricultural land' is defined under Section 2[(14)(iii)]a and b. According to the petitioner, the exclusion stipulated therein is not applicable to the case in hand, the property not being situated in a Municipal area and not within 8 kilometers as specified therein, or no notification has been issued by the Central Government as specified otherwise. This being the position, it is not correct or proper to relegate the petitioner to approach the Income Tax authorities to get necessary certificates, which hence is sought to be interfered by this Court. 5 WP (C) No. 12347 of 2010 5. Learned standing counsel submits with reference to the contents of the statement that, whether the land in question is an 'agricultural land' or not, is a 'question of fact', which is to be considered by the Income Tax authority with reference to the actual materials in connection with the issue. It is also stated that the power to adjudicate upon such issue is never vested with the land acquisition officer as made clear by this Court in the decision reported in Nalini Vs. Deputy Collector, Land Acquisition (294 ITR 423), which involved a similar circumstance. The learned Government Pleader appearing for the acquisitioning authority submits that the compensation was claimed for by the petitioner stating the property was a 'dry land' and not a wet land. It was accordingly that the enhancement was sought for and obtained from the reference Court. The matter is stated as still pending in appeal before this Court for further enhancement of the compensation. After obtaining the compensation by describing the property as a 'dry 6 WP (C) No. 12347 of 2010 land' and also after obtaining the enhanced compensation, the petitioner is now trying to have the benefit of categorizing the land as an 'agricultural land ' under Section 2[(14)(iii)] a and b of the Income Tax Act which is not correct or proper and it requires to be considered by the appropriate authority, on the basis of the relevant facts, figures and evidence. 6. Considering the rival submissions, this Court finds that the primary question to be considered and dealt with is, whether the property of the petitioner is an 'agricultural land' or not as defined under Section 2[(14) (iii)] a and b of the Income Tax Act, so as to avail the exemption provided under Section 194 LA of the Income Tax Act. Eventhough there is no case for the respondents that the property is situated in a Municipal area or within 8 kilometers as specified, whether there is any notification issued by the Central Government or not, is not discernible from any of the materials on record. That apart, whether any such notification is there or not is a 7 WP (C) No. 12347 of 2010 matter to be considered by the concerned authority after calling for the requisite materials. The Central Government who is the concerned authority to issue notification as above, is not a party to the present proceedings. 7. This Court is not in a position to adjudicate the matter with regard to the merits and holds that, it requires to be considered by the appropriate authority of the Income Tax department with reference to the materials on record. 8. In the above circumstance, it is for the petitioner to approach the Income Tax authorities by filing necessary proceedings and to get necessary certificates with regard to the nature and character of the land concerned and to have it produced before the concerned authority. Once the petitioner produces the certificate as to the nature of the property showing it as an agricultural land as contended, the Sub Court shall consider the same and appropriate orders shall be passed on Exhibit P2 8 WP (C) No. 12347 of 2010 cheque application. If the amount has already been parted with and deposited with the Income Tax Department, it will be open to the petitioner to submit such certificate before the Income Tax authority ,to get necessary refund. The writ petition is disposed of, accordingly. P.R. RAMACHANDRA MENON, JUDGE. rkc