AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 1077
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the interest of the revenue, is without jurisdiction, bad in law and void-ab-initio 2 That having regard to the facts and circumstances of the case and in law, the Ld PCIT erred in passing order u/s 263 of the Act, so much so that, the assessment order passed by the Assessing officer do not satisfy the statutory twin conditions prescribed under section 263 of the Act. viz., (i) that the assessment order is erroneous; and (ii) that the assessment order is prejudicial to the interest of Revenue, which are to be cumulatively satisfied. 3 That having regard to the facts and circumstances of the case and in law, the PCIT erred in exercising the revisionary jurisdiction under section 263 of the Act by not appreciating that the assessment order was passed by the assessing officer in accordance with the decisions of the Hon'ble Supreme Court in the cases of CIT v. Ghanshyam (HUF) [2009] 182 Taxman 368/315 ITR 1(SC); CIT, Rajkot v Govindbhai Mamaiya [2014] 52 taxmann.com 270/[2015] 229 Taxman 138/2014) 367 ITR 498(SC), UOI v. Hari Singh [2018] 91 taxmann.com 20 (SC) Being so the assessment order passed under section 143(3) r.w.s. 143(3A) & 143(3B) of the Act dated 22.01.2021 was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ab & Haryana High Court dated 19.02.2020 in the case of Mahender Pal Narang vs. CBDT (2020) 423 ITR 13 (P&H) wherein the Hon'ble High Court has dealt with the controversy arising from the judgment of Hon'ble Supreme Court in the case of CIT vs. Ghanshyam HUF dated 16th July, 2009 relating to the taxability of interest received on compensation or enhanced compensation and also the amendments/provisions of section 56(2)(viii) introduced through Finance Act, 2009 effective from 01.04.2010 on the above issue, which the Ld. AO failed to do. The Ld. PCIT pointed out that the SLP filed against the order of the decision (supra) of the Hon'ble P&H High Court has been dismissed by the Hon'ble Supreme Court vide its order dated 4th March, 2021 in Mahender Pal Narang vs. CBDT (2021) 279 Taxman 74 (SC). He, therefore, set aside the impugned assessment order with a direction to pass an order afresh after making requisite enquiries and proper verification with regard to taxability of interest on enhanced compensation. 5. Aggrieved, the assessee is in appeal before the Tribunal and all the grounds relate thereto. 6. The Ld. AR submitted that the assessment order was neither erroneous nor prejudi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ferred to the decisions in the cases of Shri Manjeet Singh HUF v. UOI & Others in CWP No. 15506 of 2013; Shri Puneet Singh vs. CIT (2019) 110 taxman.com 116 and Shri Mahendra Pal Narang vs. CBDT in CWP No. 17971 of 2019. The Ld. AR contended that the order of the Ld. PCIT is merely based on the audit objection without applying his independent mind and without considering the subsequent decisions of Hon'ble Supreme Court in the cases of (i) CIT vs. Govindbhai Mamaiya (2014) 52 taxmann.com 270 (SC) ; (ii) UOI vs. Hari Singh (2018) 91 taxmann.com 20 (SC); and (iii) ITO, TDS v. Muktanangiri Maheshgiri in Civil Appeal No. 18475 of 20I7 dated 10.11.2017, wherein the ratio of decision of CIT vs. Ghanshyam (HUF) (2009) 181 Taxman 368 (SC) has been affirmed. The Ld. AR cited decisions wherein assumption of jurisdiction under section 263 on the basis of audit objection by the Audit wing of the Department has been held to be invalid. 6.3 The Ld. AR explained that the enhanced compensation awarded by the appellate authority/court to an assessee on acquisition of capital asset is chargeable to tax as capital gain in the year of receipt as per section 45(5) of the Act. However, in the case of a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion or enhanced compensation under Land Acquisition Act, 1894 is to be treated as 'income from other sources' and not under the head 'capital gains'. The Ld. CIT-DR drew our attention to para 9 and 10 of the decision (supra). 8. We have given our careful thought to the rival submissions and perused the records. The facts are not in dispute. The assessee received interest of Rs. 3,97,56,460/- on enhanced compensation from HUDA after the compulsory acquisition of his agricultural land on which TDS amounting to Rs. 39,75,646/- @ 10% was also deducted. The assessee claimed the said interest as exempt. On perusal of case records, the Ld. PCIT gathered that the Ld. AO had completed the assessment without carrying out necessary and proper enquiry which should have been made regarding applicable judgments on the taxability of interest on enhanced compensation. The Hon'ble Punjab & Haryana High Court has given the finding that interest received on compensation or enhanced compensation will be taxed as per amended provisions introduced through Finance (No.2) Act, 2009 w.e.f. 01.04.2010 and the judgment of the Hon'ble Supreme Court in the case of CIT vs. Ghanshyam HUF would not come to the r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....preme Court. This is not so. During assessment proceedings in response to notice under section 143(2) and 142(1) of the Act, with reference to specific query on receipt of interest under section 28 of Land Acquisition Act, the assessee explained vide letter at pages 3-5 of Paper Book that interest received under section 28 of the Land Acquisition Act has been held to be part of compensation by Apex Court in the case of CIT vs. Ghanshyam HUF reported as (2009) 315 ITR 1, the same being exempt under section 10(37) of the Act has not been included in the total income of the assessee while filing return of income. The Ld. AO accepted the explanation of the assessee. 11. The issue of amended provisions of section 56(2)(viii) by the Finance Act, 2009 and the decision of Hon'ble P & H High Court in Mahender Pal Narang's case was raised by the Ld. PCIT in notice under section 263 on the basis of audit objection (copy of audit memo of ITO Hisar at pages 399-402 of Paper Book). Before the Ld. PCIT the assessee explained that the amended provisions were not in connection with the decision of Hon'ble Supreme Court in Ghanshyam HUF's case but to make simple the taxation of interest income as e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ute to nullify the effect of Hon'ble Supreme Court's ruling in the case of Rama Bai and not Ghanshyam HUF. Moreover, it is brought to our notice by the Ld. AR that the decision in Ghanshyam HUF was pronounced in July, 2016 and the Finance Bill proposing amendment to section 56 was laid in February 2016. So the intention of the legislature could never be the overruling of the ratio laid down in Ghanshyam HUF case. The issue in Rama Bai case involved the taxability in the year of receipt. The facts and questions for determination in Rama Bai's case were different from those of Ghanshyam HUF's case. The position in Ghanshyam HUF'a case has been affirmed by the Hon'ble Supreme Court in Hari Singh's case. Further, the Ld. AR submitted before us that SLP filed by the Revenue in Hari Singh's case has been withdrawn by the Revenue meaning thereby that now the issue has attained certainty. 13. We have gone through the decision of the Hon'ble P & H High Court in the case of Mahender Pal Narang (supra). In that case the land of the assessee was acquired in AY 2007-08 and 2008-09. The enhanced compensation was received on 21.03.2016. In his return filed for AY 2016- 17 he treated the interest....