DCIT (TDS), GURGAON V. LAND ACQUISTION OFFICE, GURGAON

MA 292/DEL/2022

AI Insights

The case involves the Revenue's Miscellaneous Applications seeking rectification of an ITAT order that had ruled on the non-taxability of interest received on enhanced compensation under section 28 of the Land Acquisition Act, 1894. The Revenue contended that the ITAT had overlooked a subsequent overruling of a relied-upon judgment by the Punjab & Haryana High Court. However, the ITAT clarified that its decision was based on a comprehensive consideration of relevant Supreme Court judgments, which supported the non-taxability of such interest. The Tribunal dismissed the Revenue's applications, affirming the original decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652771 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Other Referred Cases: CIT Vs Ghanshyam (HUF), Jagmal Singh and Ors. Vs State of Haryana & Ors., Attar Singh and others Vs State of Haryana and others, CIT v. Chet Ram (HUF), Union of India v. Hari Singh & others, Land Acquisition Officer, Urban Estate, Panchkula Vs. Assistant Commissioner of Income-tax, TDS
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1963, Land Acquisition Act, 1894
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUNISH RAJANI
• Assessee Lawyers: JITENDER WADHWA
• Keywords: TDS
• Section: 56; 28

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D, NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER M.A. Nos.- 291, 292 & 293/Del/2022 Arising Out of ITA Nos:- 39,40 & 41/Del/2021 (Assessment Years: 2010-11 TO 2012-13) DCIT, (TDS), Gurgaon, Haryana-122001. Vs. Land Acquisition Office, Gurgaon. Huda Complex, sector-14, Gurgaon, Haryana-1220001. PAN No: RTKL00706G APPELLANT RESPONDENT Revenue by : Sh. Munish Rajani, Sr. DR Assessee by : Sh. Jitender Wadhwa, CA Date of Hearing : 21.03.2025. Date of Pronouncement : 18.06.2025. ORDER PER: SUDHIR PAREEK, JM: In the present case, the Revenue has filed the Miscellaneous Applications (‘MA’) u/s 254(2) of the Income Tax Act, 1961 (‘the Act’) read with rule 35A of the Income Tax Rules, 1963, seeking rectification of the order dated 22.03.2022 passed by the Co-ordinate MA Nos.- 291, 292 & 293/Del/2022 Land AcquisiƟon Office 2 Bench of ITAT, Delhi, vide ITA Nos.- 39,40 & 41/Del/2021 for the Assessment Year 2010-11, 2011-12 & 2012-13 respectively. 2. In the impugned order, the Tribunal has held in para 8 as that “In the light of the legal provisions set out above and following the judgment of the Hon'ble Supreme Court in Ghanshyam (HUF) (supra), we hold that interest received by the land owners on enhanced compensation awarded to them by the court under section 28 of the LA Act is not in the nature of income from other sources in the hands of the recipient land owners under section 56 of the Act and therefore, the LAO was not under any legal obligation to comply with the TDS provisions of section 194A of the Act. Accordingly, we allow the grounds raised by the assessee by way of additional grounds taken before the Tribunal. The assessee succeeds. The original grounds become infructous.” 3. The Revenue in the present MAs has contended that the ITAT Delhi has passed the order relying upon the decision of the Hon'ble Punjab & Haryana High Court in the case of Jagmal Singh and Ors. MA Nos.- 291, 292 & 293/Del/2022 Land AcquisiƟon Office 3 Vs State of Haryana & Ors., Civil Revision No. 7740 of 2012 decision dated 18.07.2013, which according to the Revenue ITAT Delhi did not consider the fact that the judgement of Jagmal Singh and Ors. Vs State of Haryana & Ors. has been overruled by the Jurisdictional High Court in the case of Attar Singh and others Vs State of Haryana and others CWP No. 10125 of 2015, decision dated 03.09.2015 wherein the Hon'ble High Court has stated inter alia that \"The Judgement of Learned Single Judge in Jagmal Singh's Case (Supra) on which reliance has been placed by the petitioners being contrary to the aforesaid pronouncements cannot be taken to be interpreting the legal provisions correctly and is thus, overruled. 4. It has been submitted by the Revenue that this abovementioned fact was not considered by the ITAT, and there has been an error crept in the order passed by the Tribunal. 5. In response, the Ld. AR submitted that the Tribunal did not pass the order solely relying upon the judgment of the Hon’ble Jurisdictional High Court, i.e. the the Hon'ble Punjab & Haryana High Court in the case of Jagmal Singh and Ors. Vs State of Haryana MA Nos.- 291, 292 & 293/Del/2022 Land AcquisiƟon Office 4 & Ors. The Hon'ble ITAT Delhi has equally considered the judgement of the Hon'ble Supreme Court in the case of CIT Vs Ghanshyam (HUF) (2009) 182 Taxman 368 wherein it was held that interest under section 28 of the Act of 1894 is part of the amount of compensation whereas interest under section 34 thereof is only for delay in making payment after the compensation amount is determined. Interest under section 28 is a part of the enhanced value of the land which is not the case in the matter of payment of interest under section 34. 6. The Ld. AR further submitted that the other decisions of the Hon’ble Supreme Court in the case of (i) CIT v. Chet Ram (HUF) dated 12.09.2017 in Civil Appeal No.13053/2017 and (ii) Union of India v. Hari Singh & others in Civil Appeal No. 1504 of 2017 dated 15.09.2017. 6.1 Further, he submitted that after the judgement of Union of India v. Hari Singh, the Hon'ble Supreme Court has not passed any other judgment on the matter of taxability of interest received U/s 28 of the Land Acquisition Act, 1894. Therefore, the propositions laid down in MA Nos.- 291, 292 & 293/Del/2022 Land AcquisiƟon Office 5 the judgement of Union of India v. Hari Singh, will prevail till the date any other judgement of the supreme court is passed on this issue. Further, when the judgement of the apex court is available on the matter and the other High Courts including the jurisdictional High Court, is taking different opinion then the decision of the Apex Court should be considered first. 6.2 Furthermore, it is also submitted that the Hon'ble Punjab & Haryana High Court in its recent judgement in the case of Land Acquisition Officer, Urban Estate, Panchkula Vs. Assistant Commissioner of Income-tax, TDS [2024] 166 taxmann.com 325 (dated August 9, 2024) have also relied on the judgement of CIT Vs Ghanshyam (HUF) and held that there is to liability no deduct tax at source U/s 194A on the amount of interest paid U/s 28 of the Land Acquisition Act, 1894. 7. We have heard the rival contentions and perused the material available on record and finds material substance in the submissions of the Learned AR that the impugned order not solely relied upon the judgment of the Hon’ble Jurisdictional High Court, i.e. the Hon'ble MA Nos.- 291, 292 & 293/Del/2022 Land AcquisiƟon Office 6 Punjab & Haryana High Court in the case of Jagmal Singh and Ors. Vs State of Haryana & Ors and also equally considered the judgement of the Hon'ble Supreme Court in the case of CIT Vs Ghanshyam (HUF) (2009) 182 Taxman 368. On the basis of foregoing fact situation, we do not find any mistake apparent from record in the impugned orders which enables us to rectify the same u/s 254(2) of the Act as prayed and hence applications are liable to be dismissed accordingly. 8. Consequently, Miscellaneous Applications of the Revenue are hereby dismissed. Order pronounced in the open court on 18/ 06 /2025 Sd/- Sd/- (S RIFAUR RAHMAN) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18.06.2025 Pooja/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT MA Nos.- 291, 292 & 293/Del/2022 Land AcquisiƟon Office 7 ASSISTANT REGISTRAR ITAT NEW DELHI MA Nos.- 291, 292 & 293/Del/2022 Land AcquisiƟon Office 8 Sr. No. Particulars Date 1 Date of dictation of Tribunal Order 04.06.25 2 Date on which the typed draft Tribunal Order is placed before the Dictation Member 04.06.25 3 Date on which the typed draft Tribunal Order is placed before the other Member 4 Date on which the approved draft Tribunal Order comes to the Sr. P.S. /P.S. 5 Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6 Date on which the signed order comes back to the Sr. P.S. /P.S 7 Date on which the final Tribunal Order is uploaded by the Sr. P.S. /P.S. on official website 8 Date on which the file goes to the Bench Clerk along with Tribunal Order 9 Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10 Date on which the file goes to the Supervisor (Judicial) 11 Date on which the file goes for Xerox 12 Date on which the file goes for endorsement 13 Date on which the file goes to the superintendent for checking 14 The date on which the file goes to the Assistant Registrar for signature on the tribunal order 15 Date on which the file goes to dispatch section 16 Date of Dispatch of the Order "