Smt. Surti Devi, Panchkula V. ITO, Ward -3, Panchkula

ITA 57/CHANDI/2023

AI Insights

The case involves Smt. Surti Devi, who appealed against the order of the CIT(A) NFAC, Delhi, concerning the assessment year 2017-18. The primary contention was regarding the addition of Rs. 98,11,949 as income from enhanced compensation and interest under the Land Acquisition Act, which the assessee argued is exempt from tax. The CIT(A) had remanded the matter to the AO for re-assessment, which the assessee contested, leading to this appeal. The Tribunal agreed with the assessee that the CIT(A) overstepped his jurisdiction and set aside the order, directing the CIT(A) to decide the matter afresh.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127504 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 09-02-2023
• Laws Referred To: Income Tax Act, Land Acquisition Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 28; 154; 143(1); 250; 251

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’ CHANDIGARH BEFORE: SHRI A.D.JAIN, VICE PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 57/CHD/2023 नधा रण वष / Assessment Year : 2017-18 Smt. Surti Devi, House No. 154, Devi Nagar, Sector 3, Panchkula. VS ITO, Ward 3, Panchkula. थायी लेखा सं./PAN /TAN No: CMZPD अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Shri B.M.Monga, Advocate & Shri Rohit Kaura,Advocate राज व क ओर से/ Revenue by : Shri Akashdeep, JCIT, Sr.DR तार ख/Date of Hearing : 19.06.2023 उदघोषणा क तार ख/Date of Pronouncement : 21.06.2023 आदेश/ORDER PER VIKRAM SINGH YADAV,A.M. This is an appeal filed by the assessee against the order of ld. CIT(A) NFAC, Delhi dated 14.12.2022 pertaining to assessment year 2017-18 wherein the assessee has taken the following grounds of appeal: 1. That the order of Ld. CIT(A) is against the law and facts of the case. 2. That the Learned CIT(A) has exceeded the jurisdiction while passing the order u/s 250 by remanding the intimation order passed u/s 143(1) to ITA 57/CHD/2023 A.Y.2017-18 Page 2 of 6 the Assessing Officer overreaching the powers as enumerated u/s 251 of the income Tax Act 3. That the Learned CIT(A) has grossly erred in remanding the illegal order passed by the Assessing Officer wherein an addition amounting to Rs. 98,11,949 /- was made on account of amount received by the assessee as enhanced compensation alongwith the interest u/s 28 of the Land Acquisition Act, as income from other sources, whereas the enhanced compensation and interest received u/s 23(I-A), 23(2) and 28 is exempt as held by the Hon'ble Supreme Court and various Hon'ble Courts. 4. That the Ld. CIT(A) has grossly erred in upholding the intimation order passed u/s 143(1) by the AO, CPC, Bangalore without appreciating the fact that intimation order is without proper jurisdiction and passed beyond the scope and powers enshrined u/s 143(1). 5. Without prejudice to the aforesaid grounds of appeal and strictly in the alternative the Ld. AO and CIT(A), has grossly erred in not allowing the benefit of 50% deduction of said sum duly allowable u/s 57 of the Income Tax Act. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off. 2. Briefly the facts of the case are that the assessee individual filed her return of income declaring total income of Rs.1,70,490/- and agriculture income of Rs.3,51,200/-. Return was processed u/s 143(1) by CPC, Bangalore wherein the AO determined the total income at Rs.99,82,340/- and agriculture income of Rs.3,51,200/-. The AO made an addition of Rs.98,11,949/- in respect of amount received by the assessee as enhanced compensation alongwith interest u/s 28 of the Land Acquisition Act for the land acquired in the year 1989. 3. Against the said addition, the assessee has went in appeal before the ld. CIT(A) NFAC, Delhi wherein various grounds raised by the assessee were set aside to the file of the AO for ITA 57/CHD/2023 A.Y.2017-18 Page 3 of 6 taking appropriate action as per law and the relevant findings of the ld. CIT(A) NFAC, Delhi are contained in para 5.2, which reads as under : 5.2 I have perused the Intimation u/s. 143(1)(a) dated 26/03/2019 wher4ein the appellant had disclosed total income after deductions under Chapter VIA of Rs.1,70,490/- and the total income computed by the CPC, Bangalore at Rs. 99,82,340/-, though agricultural income of Rs. 3,51,200/- as disclosed by the appellant had been considered and accepted in the said Intimation. Accordingly, as against net tax payable shown by the appellant at Rs. Nil in the Intimation the same was shown payable at Rs.28,69,822/-. From the submission of the appellant as quoted above and further various judicial decisions cited by the appellant, apparently, the contention of the appellant is found to be correct. However, neither the CPC, Bangalore had the opportunity to go into the nitty-gritty of the issue raised by the appellant relating to enhanced compensation along with interest received by it claimed as exempt u/s. 28 of the Land Acquisition Act added by the AO, CPC as income from other sources in the Intimation issued u/s. 143(1 )(a) nor the issue had been considered or duly represented by the appellant while filing the rectification petition and so also not considered in the Rectification Order passed u/s. 154 of the Act. The appellant's contention that the enhanced compensation and interest received u/s. 23(1 A), 23(2) and 28 of the Land Acquisition Act was exempt as held by the Hon'ble Supreme Court and the various High Courts for which the citations had been made along with filing of compendium of judgements, could not be the subject matter of examination either while processing the return u/s. 143(1)(a) or while passing the rectification order u/s. 154 of the Act. .Further, the issue mainly based on the judicial decisions cited by the appellant pertaining to Land Acquisition Act and therefore the eligibility of exemption in pursuance to such judicial decisions since were not examined by the Assessing Officer, I am of the considered opinion that the claim of the appellant should be examined and verified by the Assessing Officer with reference to the appellant's contention and various citations and thereafter he should allow the appellant's claim of exemption of enhanced compensation and interest received by the appellant as per Land Acquisition Act. If it is found otherwise and the claim is not in accordance with the various judicial decisions cited by the appellant with reference to the facts of such land acquired and compensation received etc., after giving due opportunity to the appellant, shall deny the appellant's claim. The appellant is to provide all necessary details in this regard before the Assessing Officer for taking appropriate ITA 57/CHD/2023 A.Y.2017-18 Page 4 of 6 action by him as indicated above and as per law. Ground Nos. 1 to 3 raised by the appellant are accordingly allowed for statistical purpose. 4. Against the said findings and directions of the ld. CIT(A) NFAC, the assessee is in appeal before us. 5. During the course of hearing, the ld. AR submitted that the ld. CIT(A) has exceeded his jurisdiction in terms of remanding the matter to the file of the AO instead of deciding the same by himself. It was submitted that u/s 251 of the Act, the ld. CIT(A) does not have the power to remand the matter to the file of the AO. It was, accordingly, submitted that the matter may be set aside to the file of ld. CIT(A) with a direction to decide the same afresh after providing an opportunity to the assessee. 6. The ld. DR fairly submitted that the ld CIT(A) doesn’t have the power of remand and at the same time, he can call for the report from the AO and thereafter, decide the matter. 7. After hearing both the parties and perusing the material available on record, we find that this is clearly a situation where the ld. CIT(A) NFAC Delhi has failed to taking into consideration the powers as provided to him u/s 251 of the Act which reads as under : “Powers of the Joint Commissioner (Appeals) or the Commissioner(Appeals) Section-251: (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers – ITA 57/CHD/2023 A.Y.2017-18 Page 5 of 6 (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA,he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. 8. As it is clear from the plain reading of the provisions of Section 251(1) of the Act, the ld. CIT(A) has the power to confirm, revise, enhance or annul the assessment, however, there is no such power of setting aside the matter to the file of the AO which has been conferred by the Statute on the ld. CIT(A). As rightly pointed out by the ld DR, the ld CIT(A) while adjudicating the matter can call for the remand report from the Assessing officer on any matters he deems appropriate and require any further verification, however, the matter has to be finally decided upon by the ld CIT(A) and cannot be remanded to the AO. In view of the same, we find that the impugned order manifestly suffers from the defect wherein the ld. CIT(A) NFAC has failed to take into consideration the powers given to him u/s 251(1) of the Act. In view of the same, the matter is set aside to the file of the ld. ITA 57/CHD/2023 A.Y.2017-18 Page 6 of 6 CIT(A) NFAC, Delhi to decide the same afresh as per law after providing reasonable opportunity to the assessee. 9. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 21.06.2023. Sd/- Sd/- आकाश द प जैन !व#म %संह यादव (AAKASH DEEP JAIN) (VIKRAM SINGH YADAV) उपा(य) / VICE PRESIDENT लेखा सद+य/ ACCOUNTANT MEMBER “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar