2024 (4) TMI 878

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....thus, deserves to be quashed as such. 3. That initiation of proceedings u/s 263 of the Act on the basis of unsigned show cause notice by learned Pr. Commissioner of Income Tax, Rohtak is void-ab-initio therefore both initiation and consequent order u/s 263 of the Act without jurisdiction and thus, deserves to be quashed as such. 4. That the learned Pr. Commissioner of Income Tax has failed to appreciate that action u/s 263 of the Act is not permissible on intimation/orders passed by learned Assistant Director of Income Tax, CPC u/s 154 of the Act 5. That the learned Pr. Commissioner of Income Tax has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had accepted claim of the appellant then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Commissioner of Income Tax had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible or unsustainable view. 6. That the learned Principal Comm....

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....of the Act is contrary to the provision as the Section u/s 263 of the Act is not permissible on an intimation/order passed by the Assistant Director of Income Tax, CPC u/s 154 of the Act. Further submitted that, the issue of taxability of the interest on the enhanced compensation is subject to two views by the Judicial Orders and when the two views are plausible, the Ld. PCIT cannot pass order u/s 263 of the Act, therefore, sought for allowing the present Appeal. 6. Per contra, the Ld. Departmental Representative made following written submission:- "The assessee has cited ITAT's order in ITA No.1391/Del/2017 and 1389/Del/2017 in case of Manjeet Singh and Puneet Singh wherein ITAT has relied on the decision of Apex Court in the case of Ghanshyam HUF (2nd last para of Pg 14 of ITAT Order). The said decision of Apex Court is dt. 16.07.2009 and deals with A.Y. 1999-2000. Subsequently to said judgment of Apex Court, special provision has been made by way of Finance Act, 2009 applicable w.e.f. AY 2010-11, introducing clause (viii) in Section 56(2) and as such, Ghanshyam HUF case is no longer applicable. Further, subsequent to above amendment, Hon'ble Punjab a....

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....tion 56(2) and as such, Ghanshyuam HUF case is no longer applicable. The similar contention of the Department has been considered in detail by the Coordinate Bench of the Tribunal in the case of Gulshan Kumar Vs. PCIT in ITA 1676/Del/2023 (A.Y 2018-19) vide order dated 13/02/2024 wherein held against the Department as under:- "12. We have notice that the CBDT Circular No. 5, dated 03.06.2010 reported in (2010) 324 ITR (St.) 293, it is stated that the Hon'ble Supreme Court in the case of Rama Bai Vs. CIT (supra) has held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. This has caused undue hardship to the taxpayers. With a view to mitigate the hardship section 145A has been substituted and clause (viii) in sub- section (2) of section 56 has been inserted by the Finance (No.2) Act, 2009 so as to provide that the interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A shall be assessed as income from other sources in the year in which it is received. It is thus evident that the amended provisions of section 56(2)(viii) of the Act r.w. section 145A were brought on the s....

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....ecisions of the Hon'ble Supreme Court in the case of Ghanshyam (HUF) and the decision of Hon'ble Gujrat High Court in Movaliya Bhikhubhai Balabhai vs ITO TDS (2016) 388 ITR 343 were relied upon. 14. It may be mentioned that the Hon'ble Supreme Court has affirmed its view taken in Ghanshyam HUF's case and the decision of Gujrat High Court in Movaliya's case in its decision in the case of UOI vs. Hari Singh (2018) 91 taxmann.com 20 (SC). The decision of the Hon'ble Supreme Court in Hari Singh's case (supra) was not brought to the notice of Hon'ble P & H High Court while rendering decision in Mahender Pal Narang's case (supral Hon'ble P&H High Court has thus rendered the decision in Mahender Pal Narang's case in its peculiar facts and circumstances. Accordingly, the opinion of the Ld. PCIT that the Ld. AO should have passed the assessment in accordance with the amended law and binding decision in Mahender Pal Narang's case (supra) overlooking the decision of Hon'ble Supreme Court in Ghanshyam's HUF's case is not sustainable. Reliance of the Ld. CIT-DR on the decision in Mahender Pal Narang's case is misplaced. Ne....