ITO, W-2, Panchkula V. Sh. Kanhaiya Lal, Panchkula

ITA 77/CHANDI/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5073 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-11-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 25-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P DWIVEDI
• Keywords: Difference of opinion
• Section: 271(1)(c); 143(3); 201; 148; 56; 28

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH . . , ! ' , # '$ BEFORE: SHRI N.K.SAINI, VP & SHRI RAJPAL YADAV, JM ./ ITA NO. 77/CHD/2019 # % &% / ASSESSMENT YEAR : 2007-08 ITO, WARD-2 PANCHKULA. '( VS. SHRI KANHAIYA LAL NO.99, SECTOR 4 PANCHKULA 134 109 PAN :ABXPL 6331 M ( )* / APPELLANT) ( +,)* / RESPONDENT) # %-. / 0 / ASSESSEE BY : NONE !$ / 0 / REVENUE BY : : SHRI M.P. DWIVEDI, SR.DR 1 2 / .3 / DATE OF HEARING : 05/11/2019 '45& / .3 / DATE OF PRONOUNCEMENT : 06/11/2019 / ORDER PER RAJPAL YADAV, JUDICIAL MEMBER : PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF REVENUE AGAINST ORDER OF THE LD.C IT(A), PANCHKULA DATED 12.12.2018 PASSED FOR THE ASSTT.YEAR 20 07-08. 2. THOUGH THE REVENUE HAS TAKEN FOUR GROUNDS OF APPEAL, BU T ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE LD.CIT(A) HA S ERRED IN DELETING THE PENALTY OF RS.54,53,760/- WHICH WAS IMPOSED BY T HE LD.AO UNDER SECTION 271(1)(C) OF THE INCOME THE ASSESSEE ACT, 1 961. ITA NO NO.77/CHD/2019 2 3. IN RESPONSE TO THE NOTICE OF HEARING NONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE. WITH THE ASSISTANCE OF THE LD.DR, WE HAVE GONE THROUGH THE RECORD CAREFULLY, AND PROCEED TO DECIDE THE APP EAL EX PARTE QUA THE ASSESSEE. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 19.3.2010 DECLARING INCOME AT RS.1,63,44,514/- P LUS AGRICULTURE INCOME OF RS.1,00,000/-. NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 31.3.2011 AND ASSESSMENT O RDER WAS PASSED ON 29.12.2011 WHEREBY THE TAXABLE INCOME OF THE ASSESSEE WAS DETERMINED AT NIL. HOWEVER, ON SUBSEQUENT REVIEW OF CAS E RECORD BY THE COMMISSIONER OF INCOME-TAX, PANCHKULA, IT WAS NOTICED THA T THE ASSESSING OFFICER HAS NOT EXAMINED THE ISSUE/POINT ON THE BASIS OF REASONS RECORDED FOR ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. A FRESH ASSESSMENT ORDER HAS BEEN PASSED ON 25.3.2015 UNDE R SECTION 143(3) R.W.S. 147 OF THE ACT. THE LD.AO HAS DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.1,64,03,967/-. IT EMERGE S OUT FROM THE RECORD THAT A SUM OF RS.2,57,04,200/- WAS RECEIVED B Y THE ASSESSEE ON ACCOUNT OF ENHANCED COMPENSATION. SIMILARLY, HE RECEIVED A SU M OF RS.1,64,03,967/- AS INTEREST ON ENHANCED COMPENSATION. A DISPUTE AROSE, WHETHER THIS INTEREST INCOME ON ENHANCED COMPENSATION IS ASSESSA BLE AS INCOME FROM OTHER SOURCES OR IT ALSO QUALIFIES FOR EXEMPTION. THE LD.AO HAS HELD THAT THIS AMOUNT IS TO BE ASSESSED AS INCOME FROM OT HER SOURCES AND HE INITIATED PENALTY PROCEEDINGS AGAINST THE ASSESSEE FOR FU RNISHING INACCURATE PARTICULARS OF INCOME. HE ULTIMATELY IMPOSED PENA LTY OF RS.54,53,360/- WHICH IS EQUIVALENT TO THE TAX SOUGHT TO BE EVADED ON THIS ITA NO NO.77/CHD/2019 3 INTEREST INCOME. DISSATISFIED WITH THE PENALTY ORDER DATED 21.3.2018, THE ASSESSEE HAS CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT (A). AFTER DETAILED EXAMINATION, THE LD.CIT(A) HAS DELETED THE PENALTY BY R ECORDING FOLLOWING FINDING: 4.3 I HAVE GONE THROUGH THE FACTS OF THE CASE AND WRITTEN SUBMISSION FILED BY THE APPELLANT. IN THIS CASE, THE APPELLAN T HAD CLAIMED THE 4ENTIRE AMOUNT OF INTEREST ON ENHANCED COMPENSATION RECEIVE D U/S 28 OF THE LAND ACQUISITION ACT FROM LAND ACQUISITION OFFICER UPON AWARD OF COURT TO BE EXEMPT RELYING UPON THE DECISION OF HON'BLE APEX CO URT IN GHANSHYAM DASS (HUF) 315 ITR 1 WHEREIN IT V THAT INTEREST REC EIVED U/S 28 OF LAND ACT FORMED PART OF ENHANCED VALUE OF LAND IS A PART OF COMPENSATION U/S 45(5)(B) OF THE ACT AND THEREFORE THE APPELLANT CLA IMED THAT INTEREST RECEIVED BEING PART OF COMPENSATION IS EXEMPT U/S 1 0(37) OF THE ACT. HOWEVER THE AO AND LD.CIT(A) IN QUANTUM PROCEEDINGS HAVE RELIED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. BIR SINGH HUF, ITA NO.209 OF 2004 DATED 27.10.2010 AND IN THE CASE OF MANJEET SINGH (HUF) VS. UOI IN CWP NO. 15506 OF 201 3 FOR HOLDING THAT INTEREST U/S 28 OF LAND ACQUISITION ACT IS TAX ABLE U/S 56 OF THE IT ACT AS INCOME FROM OTHER SOURCES. THUS AT THE TIME OF ASSESSMENT PROCEEDINGS THERE WAS CLEARLY A DEBATABLE ISSUE INV OLVED REGARDING TAXABILITY OF INTEREST RECEIVED U/S 28 OF LAND ACQU ISITION ACT ALONGWITH THE ENHANCED COMPENSATION AWARDED TO THE APPELLANT BY THE COURT. SO THIS IS A CASE OF DIFFERENCE OF OPINION ON THE BASIS OF DIFFERENT JUDGMENTS OF THE COURTS RELIED UPON BY APPELLANT AND THE AO. IT IS A LSO NOTED THAT APPELLANT HAD DISCLOSED THE ENTIRE RECEIPTS OF ENHA NCED COMPENSATION AND INTEREST RECEIVED THEREUPON IN THE RETURN OF INCOME WHILE CLAIMING EXEMPTION U/S 10(37) OF THE ACT. THUS PENALTY U/S 2 71(L)(C) FOR FILING INACCURATE PARTICULARS OF INCOME, LEVIED ON THE APP ELLANT FOR MAKING A CLAIM WHICH WAS NOT FOUND SUSTAINABLE DUE TO DIFFER ENCE OF OPINION, IS NOT JUSTIFIED AS HAS BEEN HELD IN A PLETHORA OF JUDGEME NTS INCLUDING THE APEX COURT'S DECISION IN CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. THE CLAIM MADE BY APPELLANT WAS BONAFIDE EVEN IF THE SAME WAS REJECTED IN QUANTUM PROCEEDINGS BY THE CIT(A). 4.4 FURTHER, THE HON'BLE APEX COURT SUBSEQUENT TO I TS DECISION IN THE CASE OF GHANSHYAM (HUF) (SUPRA) HAS REITERATED ITS FINDINGS IN THE CASES OF GOVINDBHAI MAMAIYA IN CIVIL APPEAL NO.8103 OF 20 09, UOI VS. HARI ITA NO NO.77/CHD/2019 4 SINGH AND OTHERS IN CIVIL APPEAL NO. 1504 OF 2017 A ND CIT VS. CHET RAM (HUF) IN CIVIL APPEAL NO. 13053 OF 2017. THE JU RISDICTIONAL IT AT CHANDIGARH IN ITS RECENT DECISION IN THE CASE OF SU RINDER KUMAR & OTHERS IN ITA NO.539/CHD/2016 DATED 04.10.2018 HAS ALSO STATED THAT PROPOSITION LAID DOWN IN GHANSHYAM HUF (SUPRA) REMA INS AND WHICHHAVING BEEN LAID DOWN BY THE HON'BLE APEX COUR T IS THE LAW OF THE LAND AND HAS TO BE FOLLOWED BY ALL LOWER AUTHORITIE S. IN VIEW OF THE ABOVE DISCUSSION, I HOLD THAT PENALT Y LEVIED BY AO U/S 271(L)(C) IS NOT SUSTAINABLE AND IS ACCORDINGLY ORD ERED TO BE CANCELLED. THIS GROUND OF APPEAL IS ALLOWED. 5. ON DUE CONSIDERATION OF THE ABOVE FACT, AND IN THE LIGHT OF T HE RECORD AVAILABLE WITH US, IT EMERGES OUT THAT THE CORE ISSUE IS, WHETHER THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME OR NOT. IT IS PERTINENT TO NOTE THAT WHEN THE ASSESSEE FILE D HIS RETURN OF INCOME ON 19.3.2010, THE POSITION OF LAW, WHETHER INTEREST INC OME RECEIVED ON ENHANCED COMPENSATION IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES OR IT WILL TAKE CHARACTER AKIN TO THE ENHANCED COMPENSATION, WAS NOT CLEAR. JUDGMENT OF HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF CITY VS. BIR SINGH HUF, ITA NO NO.20 9 OF 2004 CAME MUCH LATER. HENCE, WHEN THE ASSESSEE HAS FILED RETURN O N THAT POINT OF TIME, THE ISSUE WHETHER INTEREST INCOME ON ENHANCED COMPENSATION IS TO BE ASSESSED AS INCOME FROM OTHER SOURCE S WAS DEBATABLE ISSUE. THIS CONTROVERSY HAS BEEN SILENCED AFTER FILING OF THE RETURN BY THE ASSESSEE. THE ASSESSEE HAS NOT FURNISHED INAC CURATE PARTICULARS. HIS STAND COULD NOT BE ACCEPTED ON ACCOUNT OF CHANGE OF POSITION OF LAW EXPLAINED BY THE HONBLE JURISDICTIONAL HIGH COU RT SUBSEQUENT TO THE FILING OF THE RETURN OF INCOME. THE LD.CIT(A ) HAS ITA NO NO.77/CHD/2019 5 CONSIDERED THIS ASPECT ELABORATELY IN THE FINDING EXTRACTED (S UPRA), AND AFTER GOING THROUGH WELL REASONED FINDING, WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE REVENUE. IT IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER, 2019. SD/- SD/- (N.K. SAINI) VICE-PRESIDENT (RAJPAL YADAV) JUDICIAL MEMBER CHANDIGARH; DATED, 06/11/2019