Case Law Details
Subhash Chander Kathuria Vs ITO (Delhi High Court)
Introduction: In the recent case of Subhash Chander Kathuria Vs ITO, the Delhi High Court dealt with a situation where the tax authorities failed to provide credit for Tax Deducted at Source (TDS) on compensation received from the National Highways Authority of India (NHAI).
Analysis: The case arose from the acquisition of the petitioner’s land by NHAI, which paid compensation and interest to the petitioner. NHAI deducted tax at source for both the principal amount and the interest. However, an error was noted in the TDS deposited for the principal amount, which was not for the assessment year (AY) 2020-21 but for a different year. NHAI acknowledged this mistake and corrected it, as reflected in the revised Form 26-AS.
The petitioner had already claimed the compensation and interest as tax-exempt in the return for AY 2020-21. However, a demand was raised against the petitioner, without giving credit for the TDS on the compensation.
In response, the petitioner filed a rectification application to resolve this issue. The Delhi High Court directed the Jurisdictional Assessing Officer (JAO) to decide on the pending rectification application as soon as possible, not exceeding six weeks from the receipt of the judgment.
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