Karnataka High Court takes note of income tax exemption disparity in laws pertaining to land acquisition

The Karnataka High Court has allowed an appeal by the Income Tax Department against tax exemption allowed in certain land acquisition cases.

The order, passed on October 29 by a division bench of the Dharwad Bench consisting of Justices Krishna S Dixit and Vijaykumar Patil, nevertheless noted a certain imbalance in the different laws regarding the benefits that the land losers were eligible for.

In this case, a previous high court judgment from April 2023 had granted relief from paying income tax for compensation of land acquisition, based on Section 96 of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Appealing this judgment before the division bench, the I-T Department argued that this could only be applied if the acquisition was made under the 2013 act itself and not through some other law, such as the Karnataka Highways Act.

On the other hand, the opposing side argued that when the 2013 Act was enacted, all the other competing laws were implied to have been repealed, among other arguments. The high court accepted the I-T Department’s appeal, striking down the earlier order.