Bengaluru: It was high time the union government addressed the issue of discrimination between land losers who are compensated under local statutes and those under the 2013 Act, the High Court of Karnataka has said.
A division bench of Justices Krishna S Dixit and Vijayakumar A Patil noted that the benefits of compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, are pretty attractive compared to those under state legislations.
“In the new Act, the amount of compensation payable to the land losers is much higher. Added to the above, under Section 96 of the 2013 Act, the compensation is exempted from the levy of income tax. There are other rehabilitatory facilities, too. It is quite obvious that there is a lot of heartburning in the class of persons who have lost lands in acquisitions accomplished under the statutes other than 2013 Act,” the bench said.
The bench gave this suggestion while allowing the appeal filed by the Commissioner of Income Tax (TDS) challenging the single-bench order in favour of land losers on the issue of levy of income tax on the compensation paid.
The lands were acquired for a road-widening project in the Dharwad district and the compensation was also paid. The land losers moved the single bench questioning the demand notice for deduction of TDS on the compensation. The single bench relieved the land losers from paying income tax in terms of section 96 of the 2013 Act, which exempts compensation from the income tax.
In its appeal, the income tax department argued that exemption from income tax can be invoked only when land is acquired under the the 2013 Act and not under any other statutes such as the Karnataka Highways Act, as done in the instant case.
On the other hand, the land losers contended that the provisions of all local statutes stand impliedly repealed by the enactment of the 2013 Act. They also argued that all land losers constitute one homogenous class for bane or benefits and therefore section 96 of the 2013 Act is applicable even when the acquisition is done under the local laws.
However, the division bench observed that the 2013 Act is not in derogation of all the existing legislations pertaining to the acquisition of property but is in addition to existing state legislations. It conceded that compensation under the state legislations is comparatively less than what is being awarded under the 2013 Act. In addition, Section 96 of the 2013 Act also exempts compensation from income tax.