TaxTMI 
TaxTMI 
2025 (6) TMI 1308
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....24 "1) The Learned CIT(A) erred in confirming penalty of Rs. 20,10,01,733/- u/s 271(1)(c) for concealment of income. 2) The Learned CIT(A) erred in confirming penalty of Rs. 20,10,01.733/-u/s 271(1)(c) for concealment of income on the addition of Rs. 43,08,61,042/- as income from other sources and Rs. 22,49,01,802 as income from capital gains being amounts received on account of compensation for acquisition of land without appreciating that there is no concealment of income as Assessee has made all bonafide disclosures w.r.to the addition and in fact reopening was done on the basis of information given by the Assessee about said income and that penalty is not automatic and hence penalty u/s 271(1)(c) of Rs. 20,10,01,733/- may be deleted. 3) The Learned CIT(A) erred in confirming penalty of Rs. 20,10,01,733/-u/s 271(1)(c) for concealment of income without appreciating that in the facts of the present case there was a bonafide dispute w.r.to the year of taxability and said issue is a legal and debatable issue and thus there is no concealment of income and hence penalty u/s 271(1)(c) of Rs. 20,10,01,733/- may be deleted." ITA NO. 4662/Mum/2024 1)....
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.... the issue is in respect of addition made by the ld. Assessing Officer u/s. 45(5)(b) towards additional compensation received by the assessee and interest on additional compensation u/s. 56(2)(viii) which according to the assessee was received on account of interim order by the Hon'ble High Court of Bombay in the appeal filed by the State Government of Maharashtra not accepting the award passed by the Civil Court. 4. Brief facts of the case are that assessee is a non-resident and a senior citizen residing in Australia as an Overseas Citizen of India (OCI). Assessee owned a land admeasuring 2,76,500 sq. mtrs at village Panaje, Taluka Uran, District Raigad. These lands were acquired by the Special Land Acquisition Officer (SLAO) during the year 1986 for which an order was passed u/s. 11 of the Land Acquisition Act (LAA), 1894, awarding compensation of Rs. 14,49,531/-. Aggrieved by the order of SLAO, assessee made a reference u/s. 18 of the LAA before the Court of Civil Judge, Senior Division, Raigad at Alibag on 25.07.1990 bearing Land Acquisition Reference No. 620/2000 (old L.A.R. No.2661 of 1990). Against the said reference made by the assessee, the Court of Civil Judge, Sen....
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....l Application No.1410 of 2014. Submission made by the State of Maharashtra through its appeal before the Hon'ble High Court of Bombay states- "1) That the Trial Court has committed an error in holding that the compensation awarded by S.L.A.O. to the claimant is inadequate and improper. 2) That the Reference Court erred in partly allowing the reference preferred by the claimant u/s. 18 of the Land Acquisition Act. 3) That the Reference Court erred in coming to the conclusion that the claimant is entitled to get market value of the acquired land @ Rs. 500/-PSM and all other statutory benefits." 4.4. In the said application filed by the State of Maharashtra, in para-3 it mentioned about the uncertainty of getting back of the excess payment if the applicant succeeds in its appeal. It prayed that in order to avoid multiplicity of proceeding in execution and restitution, the order passed by the Civil Court be stayed for its operation, execution and implementation until the hearing and final disposal of the appeal so filed. The submission so made in this respect is reproduced as under: "3. In the event of the Applicant-State succeeding in the Fir....
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.... consideration, assessee filed his return of income on 31.07.2016, reporting total income at Rs. 1,42,95,590/- claiming refund of prepaid taxes and TDS amounting to Rs. 8,25,78,755/-. In the said return, assessee did not offer the additional compensation received by him in view of proviso to section 45(5)(b). However, he intimated the details of the said transaction to the concerned Assessing Officer by way of a submission dated 09.08.2016. This letter formed the basis for initiating re-assessment proceeding by issuing notice u/s.148, dated 26.03.2019. Ld. Assessing Officer recorded the reasons to believe for invoking the re-assessment proceedings referring to the amount of additional compensation received by the assessee not offered to tax in the return filed by him. 5.1. Assessee made various submissions before the ld. Assessing Officer contending that additional compensation received by him during the year is not taxable since the order passed by the Hon'ble High Court of Bombay is not the final order but an interim one. Further, it was submitted that Hon'ble High Court of Bombay had stayed the operation, execution and implementation of the order of ld. Civil Court an....
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....essee had made a request for early hearing before the Chief Commissioner of Income Tax (IT), West Zone, Mumbai, the same was granted and thereafter he took up the appeal for adjudication on merit. 6.1. It is thus noted that on one hand, ld. CIT(A) holds that the delay is not condoned and the appeal is liable to be dismissed, however, on the other hand he took up the appeal for adjudication on merit which he has done so by passing a speaking order on the grounds raised by the assessee on the merits of the case sustaining the addition made by the ld. Assessing Officer. 6.2. In this respect, we take note of section 249 of the Act. To address the issue in hand before us, we need to delve into the understanding of the expression "sufficient cause". Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a "sufficient cause" for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Suprem....
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....ust be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the l....
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.... terms of Section 250 which deals with procedure in appeals by fixing dates for hearing of the appeal and passed the order on the merits of the case dismissing the appeal. 6.8. Upon perusing the provisions contained in section 249(2), it states that the appeal has to be presented within 30 days of the relevant date. Further, by way of sub section (4) of section 249, no appeal shall be admitted unless prescribed conditions are fulfilled. Sub section (3) of 249 provides for admitting the appeal even if the appeal is filed after the prescribed limitation, if assessee is able to demonstrate sufficient cause for not presenting it within the prescribed period to the satisfaction of the Appellate Authority. It is only after the admission of the appeal, that the procedure in appeal as prescribed u/s.250 are followed with. This section provides for fixing of day and place for the hearing of the appeal among other procedures. Thereafter, section 251 lists down the powers of the Appellate Authority in disposing of the appeal. 6.9. In the present case, ld. CIT(A) has despite holding that the appeal is dismissed on account of delay has proceeded to adjudicate upon the merits of the case b....
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....ced compensation awarded by the Court of Civil Judge, Senior Division, Raigad at Alibag, is not acceptable to the Government of State of Maharashtra which may vary depending upon the outcome of the appeal yet to be decided by the Hon'ble High Court of Bombay. Since the uncertainty prevails, assessee was permitted to withdraw subject to providing the bank guarantee of 60% of the said amount and an indemnity bond for the balance 40%. Assessee had to keep 60% of the said compensation in the bank to obtain bank guarantee and thus asserted that he did not have access to the entire amount of compensation so awarded. The compensation so awarded is not final as assessee may be required to bring back the amount if he loses the appeal, which in the present scenario is subjected to furnishing of bank guarantee and indemnity bond. 7.2. Further, it was strongly submitted that order of Hon'ble High Court of Bombay is an interim order as the stay of the award is till the final disposal of the appeal filed by the Government of State of Maharashtra. Having considered the submissions of the assessee, ld. CIT(A) placed reliance on the decision of Hon'ble Supreme Court in the case of CI....
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....t by which the compensation or consideration is enhanced or further enhanced by the court, Tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which such amount is received by the assessee. [Provided that any count of compensation received in pursuance of an interim order of a court. Tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which the final order of such court Tribunal or other authority is made] [(c) where in the assessment for any year, the capital gain arising from the transfer of a capital asset is computed by taking the compensation or consideration referred to in clause (a) or, as the case may be, enhanced compensation or consideration referred to in clause (b), and subsequently such compensation or consideration is reduced by any court, Tribunal or other authority, such assessed capital gain of that year shall be recomputed by taking the compensation or consideration as so reduced by such court, Tribunal or other authority to be the full value of the consideration] Explanation-For the purposes of th....
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.... arising from transfer of a capital asset. Sub-section (5) of the said section provides for dealing with capital gains arising from transfer by way of compulsory acquisition where the compensation is enhanced or further enhanced by the court. Tribunal or any other authority. Clause (b) of the said sub-section provides that where the amount of compensation is enhanced or further enhanced by the court it shall be deemed to be the income chargeable of the previous year in which such amount is received by the assessee. There is uncertainty about the year in which the amount of compensation received in pursuance of an interim order of the court is to be charged to tax, due to court orders. Accordingly, it is proposed to provide that the amount of received in pursuance of an interim order of the court, Tribunal or other authority shall be deemed to be income chargeable under the head 'Capital gains' in the previous year in which the final order of such court, Tribunal or other authority is made. This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent assessment years." ....
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....ty bond for the balance 40%. The permission to withdraw the amount of compensation given to the assessee based upon security obtained by the Hon'ble Court itself indicates the uncertainty which prevails on the final outcome which shall be determinative of the amount of compensation ultimately reaching the hands of the assessee. On making assessee deposit the income-tax in the year under consideration on the enhanced compensation, there exist a possibility of a situation which may arise requiring the Department to refund the amount of tax upon the final outcome in the appeal by the State of Maharashtra if it is unfavourable to the assessee. It is a situation where the assessee does not have full access to the entire amount for his use and enjoyment and at the same time, going by the stand taken by the authorities below, he is required to cough out money from his coffers to meet the tax liability on the said amount. Provisions of the Act discussed above does not envisage putting assessee in such a situation. 9.1. Reference was made to section 144 of the Code of Civil Procedure, 1908 which provides for restitution. According to this, where an order of Court is modified in appea....
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....ell say if the text is the texture, context is what gives it the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match with the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at in the context of its enactment, with the glasses of the statute maker provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place..." 9.5. In view of the above deliberation, stand taken by the authorities below that even after the insertion of pr....
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....iew in such a scenario taken by the Courts is that till the case is decided finally by the judicial forum, it cannot be said that the assessee has acquired a right to receive the income for the purposes of section 5 of the Act. According to the Hon'ble Court, the time of accrual for taxing income gets postponed till the dispute is adjudicated by the Civil Court. 10.1. While making these observations, Hon'ble Court referred to the decision of Hon'ble Supreme Court in the case of E.D. Sassoon and Co. Ltd. [1954] 26 ITR 27 (SC), whereby it observed that there was no absolute right to receive the amount at the time of withdrawing the sum because if the appeal of the State Government was allowed in its entirety, the right to payment of the enhanced compensation would fall altogether. Further, Hon'ble Supreme Court referred to the observation of the Hon'ble Andhra Pradesh High Court in the case of Khan Bahadur Ahmed Alladin and Sons vs. CIT [1969] 74 ITR 651 (AP) whereby it held that "Income-tax is not levied on a mere right to receive compensation; there must be something tangible, something in the nature of debt, something in the nature of an obligation to pay an....