ITO Vs Smt. Supriya S. Shetty (Karnataka High Court)
Karnataka HC Sets Aside Order Granting TDS Refund on Land Acquisition Compensation Due to Suppression of Material Facts; ₹5 Lakh Costs Imposed
The Karnataka High Court allowed the Department’s writ appeal and set aside the order of the Single Judge directing refund of TDS deducted from land acquisition compensation. The assessee had contended that compensation received for acquisition of land under the National Highways Act was exempt from income tax in view of Section 96 of the RFCTLARR Act, 2013, and therefore the TDS deducted should be refunded.
However, the Department demonstrated that the assessee had already claimed the TDS as refund in her return for AY 2022-23, and the refund along with interest had been processed u/s 143(1) and credited to her bank account in November 2022. Despite this, the writ petition was filed in 2024 seeking refund again.
The Court held that the order of the Single Judge was obtained on the basis of misleading and incorrect facts. Since the refund had already been granted, the direction to refund would have resulted in double refund of the same amount. The explanation that the refund was processed by the Chartered Accountant without the assessee’s knowledge was rejected by the Court.
Accordingly, the Division Bench set aside the Single Judge’s order and imposed costs of ₹5,00,000 on the assessee for suppression of material facts and wastage of judicial time, directing that the amount be paid to the Karnataka State Legal Services Authority.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
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.
