TaxTMI 
TaxTMI 
2025 (7) TMI 1840
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.... 2. The Learned CIT(A) ought not to have dismissed the appeal filed by the assessee, when assessee placed a reasonable claim for exemption of capital gains, arising on account of compulsory acquisition, from Income-tax in view of section 96 of REFTLAR Act and Section 2(37) of Income-tax Act, 1961. 3. The Learned CIT(A) ought not to have appreciated that as per provisions of section 96 of REFTLAR Act and Section 2(37) of Income-tax Act, 1961, the land compulsorily acquired by the Government is exempt from income-tax and hence not taxable. 4. The Learned CIT(A) ought to have appreciated and followed the CBDT Circular No. 14 (XL-35) dated 11/04/1955, wherein it is clearly mentioned that ignorance of assessee cannot be taken advantage by officers and it is one of the duties of officers to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. Without prejudice to the above grounds: 5. Kind attention is drawn to the Hon....
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....on of his lands under the National Highways Act, 1956. The Ld. AR submitted that the CPC, Bangalore, vide its intimation issued u/s 143(1) of the Act dated 28.02.2024, had recomputed the subject "Long Term Capital Gains" (LTCG) on the subject transfer transaction disclosed by the assessee in his return of income at Rs. 35,72,240/-. The Ld. AR submitted that thereafter the assessee as per the advice of his aforementioned tax consultant filed an appeal before the CIT(A)/NFAC wherein he had sought for exemption of the profit/income arising from the subject transaction of transfer of his land from levy of income-tax as per the provisions of the RFCTLARR Act, 2013 and u/s 10(37) of the Act. However, on dismissal of the appeal the assessee as per the advice of his tax consultant filed a rectification application through the grievance portal seeking withdrawal of the "capital gains" on the compulsory acquisition of the subject lands that was offered by him as his income in the return of income. In the meantime, the tax consultant advised the assessee to file another appeal before the CIT(A) assailing the impugned intimation passed u/s 143(1), dated 28.02.2023. Accordingly, the assessee fi....
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.... application filed by an appellant seeking condonation of the delay involved in filing the appeal is supported by the recent judgment of the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31st January, 2025, wherein the Hon'ble Apex Court while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of delay of 166 days by the Income Tax Appellate Tribunal, Raipur Bench, had observed that a justice oriented and liberal approach should be adopted while considering the application filed by an appellant seeking condonation of the delay in filing the appeal. We thus, in terms of our aforesaid observations, condone the delay involved in filing of the present appeal. 5. The assessee has filed with us an application for admission of certain additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963, which comprises of the following documents: (i). Order issued by NHAI for Award under compulsory acquisition of land from assessee dt. 04.02.2022. (ii). Purchase....
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....ssee that the compensation received on compulsory acquisition of his land under the National Highways Act, 1956 was not exigible to tax fell beyond the scope and ambit of the appeal before him. Accordingly, the CIT(A), based on his aforesaid observations declined to deal with the claim of the assessee that the compensation received on compulsory acquisition of his land under the National Highways Act, 1956 could not have been brought to tax. 9. The assessee, being aggrieved with the order of CIT(A) has carried the matter in appeal before us. 10. We have heard the learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home her contentions. 11. Smt. Hema Latha K., C.A. the learned Authorized Representative (for short "ld.AR") for the assessee, at the threshold of hearing of the appeal, submitted that the compensation received by the assessee as per - Award No. 8 of 2022, dated 04.02.2022 on the compulsory acquisition of his agricultural land u/s 3E(1) of the National Highways Act, 1956, was....
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....r a bounden duty to assist them in every reasonable way, particularly in the matter of claiming and clearing reliefs/refunds to which they are legally entitled, had drawn support from the CBDT Circular No. 14 XL-35, dated 11.04.1955. The Ld. AR, based on her aforesaid contention, submitted that the Tribunal in all fairness and in the interest of justice vacate the action of the lower authorities which have wrongly brought the amount of compensation received by the assessee on the compulsory acquisition of his land under the National Highways Act, 1956 to tax. 12. Per contra, Dr. Aparna Villuri, the Senior Departmental Representative (for short "Ld. DR") submitted that as the assessee had disclosed the profits/gains on the compulsory acquisition of his land under the National Highways Act, 1956 as his income in the revised return of income for the subject year, therefore, no infirmity emerges from the intimation issued by the CPC, Bangalore, which had rightly brought the same to tax in his hands. Elaborating further on her contention, the Ld. DR submitted that the remedy available with the assessee for seeking the profit/gain on the transfer of the subject land as exempt was by f....
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.... in Goetze (India) Limited v. Commissioner of Income Tax. 11(A). In Jute Corporation of India Limited v. CIT, for the assessment year 1974-75 the appellant did not claim any deduction of its liability towards purchase tax under the provisions of the Bengal Raw Jute Taxation Act, 1941, as it entertained a belief that it was not liable to pay purchase tax under that Act. Subsequently, the appellant was assessed to purchase tax and the order of assessment was received by it on 23rd November, 1973. The appellant challenged the same and obtained a stay order. The appellant also filed an appeal from the assessment order under the Income Tax Act. It was only during the hearing of the appeal that the assessee claimed an additional deduction in respect of its liability to purchase tax. The Appellate Assistant Commissioner (AAC) permitted it to raise the claim and allowed the deduction. The Tribunal held that the AAC had no jurisdiction to entertain the additional ground or to grant relief on a ground which had not been raised before the Income Tax Officer. The Tribunal also refused the appellant's application for making a reference to the High Court. The High Court upheld the d....
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....the order of assessment passed by the Income Tax Officer." [emphasis supplied] (B) It is clear, therefore, that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. 12. At page 694, after referring to certain observations of the Supreme Court in Additional Commissioner of Income-tax v. Gurjargravures P. Ltd., (1978) 111 ITR 1, the Supreme Court observed at Page 694 as under :- "The above observations do not rule out a case for raising an additional ground before the Appellate Assistant Commissioner if the ground so raised could not have been raised at that particular stage when the return was filed or when the assessment order was....
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....category viz. where "the ground became available on account of change of circumstances or law." 14. The facts in Jute Corporation of India Ltd., various judgments referred to therein as well as in subsequent cases, which we will refer to, establishes this beyond doubt. In many of the cases, the grounds were, in fact, available when the return was filed and/or the assessment order was made. In Jute Corporation of India Ltd., the ground was available when the return was filed. The assessee did not claim any deduction of its liability to pay purchase tax as "it entertained a belief that it was not liable to pay purchase tax under the Bengal Raw Jute Taxation Act, 1941". Thus, the ground existed when the return was filed. The assessment order was even made and received by the assessee. It is only after the appeal was filed that the assessee claimed a deduction in respect of the amount paid towards the purchase tax under the said Act. It is also significant to note that the assessee's entitlement to claim deduction had been held to be valid in view of an earlier judgment of the Supreme Court in Kedarnath Jute Manufacturing Company Limited v. Commissioner of Income-tax, (197....
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.... decisions, placed the papers before the Hon'ble Chief Justice for constituting a larger bench to resolve the controversy. The Full Bench answered the reference in the affirmative and in favour of the assessee. The Full Bench held :- "Thus, the Appellate Assistant Commissioner has very wide powers while considering an appeal which may be filed by the assessee. He may confirm, reduce, enhance or annul the assessment or remand the case to the Assessing Officer. This is because, unlike an ordinary appeal, the basic purpose of a tax appeal is to ascertain the correct tax liability of an assessee in accordance with law. Hence an Appellate Assistant Commissioner also has the power to enhance the tax liability of the assessee although the Department does not have a right of appeal before the Appellate Assistant Commissioner. The Explanation to subsection (2), however, makes it clear that for the purpose of enhancement, the Appellate Assistant Commissioner cannot travel beyond the proceedings which were originally before the Income-tax Officer or refer to new sources of income which were not before the Income-tax Officer at all. For this purpose, there are other separ....
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....f Income-tax (Appeals) had erred and failed in their duty in adjudicating the matter correctly and by mechanically including the amount in the total income. It is pertinent to note that the assessee contended that it was entitled to the deduction in view of two orders of the Special Benches of the Tribunal and the assessee further stated that it had raised these additional grounds on learning about the legal position subsequently. The Tribunal declined to entertain these additional grounds. The Supreme Court did not answer the question on merits, but framed the following question and held as under :- "4. The Tribunal has framed as many as five questions while making a reference to us. Since the Tribunal has not examined the additional grounds raised by the assessee on merit, we do not propose to answer the questions relating to the merit of those contentions. We reframe the question which arises for our consideration in order to bring out the point which requires determination more clearly. It is as follows: "Where on the facts found by the authorities below a question of law arises (though not raised before the authorities) which bears on the ta....
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....ited. This is clear from the fact that these judgments have been expressly referred to in detail by the CIT(A) and by the Tribunal. 20. We wish to clarify that both the appellate authorities have themselves considered the additional claim and allowed it. They have not remanded the matter to the Assessing Officer to consider the same. Both the orders expressly direct the Assessing Officer to allow the deduction of Rs. 40,00,000/- under section 43B of the Act. The Assessing Officer is, therefore, now only to compute the respondent's tax liability which he must do in accordance with the orders allowing the respondent a deduction of Rs. 40,00,000/- under section 43B of the Act. 21. The conclusion that the error in not claiming the deduction in the return of income was inadvertent cannot be faulted for more than one reason. It is a finding of fact which cannot be termed perverse. There is nothing on record that militates against the finding. The appellant has not suggested, much less established that the omission was deliberate, mala-fide or even otherwise. The inference that the omission was inadvertent is, therefore, irresistible. 22. It was then submitt....
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....negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254. 24. A Division Bench of the Delhi High Court dealt with a similar submission in Commissioner of Income-tax v. Jai Parabolic Springs Limited, (2008) 306 ITR 42. The Division Bench, in paragraph 17 of the judgment held that the Supreme Court dismissed the appeal making it clear that the decision was limited to the power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the powers of the Tribunal. In paragraph 19, the Division Bench held that there was no prohibition on the powers of the Tribunal to entertain an additional ground which, according to the Tribunal, arises in the matter and for the just decision of the case. 15. Considering the aforesaid settled position of law, we are of the firm conviction that the assessee remained well within his right to raise the claim that the compensation received by him on the compulsory acquisition of his land unde....
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....x Act, 1961. For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: "7.21 Viewed from this angle also, I am of the considered opinion that Section 96 of the RFCTLARR Act is applicable to compensation for land acquired under the N.H. Act and the said compensation is exempted from TDS/ payment of income tax under the I.T. Act and the impugned order deserves to be set aside on this score also. 7.22 A perusal of the impugned order will indicate that the respondent has come to the conclusion that in view of Section 105(1) of the RFCTLARR Act is not applicable to acquisition of land under the N.H. Act, which is excluded in the Fourth Schedule, since the land of the petitioner was acquired under the N.H. Act and not under the RFCTLARR Act. 7.23 As stated hereinbefore, I have already come to the conclusion that by virtue of the Three Ordinances, Removal of difficulties order, Notification, Correspondence etc., Section 96 of the RFCTLARR Act is applicable to compensation paid / payable for acquisition of land under the N.H. Act, as a result of which, the compensation would not be exigible to income tax and therefore, the oblig....
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.... High Court of Calcutta in the case of PCIT, Asansol Vs. M/s. The Durgapur Projects Ltd., ITA No. 282 of 2022, dated 24.02.2023. It was observed by the Hon'ble High Court that as per Section 96 of the RFCTLARR Act, 2013 no distinction has been made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income tax under the said Act. 19. Considering the aforesaid settled position of law, we principally concur with the Ld. AR that the compensation received on the compulsory acquisition of the land under the National Highways Act, 1956 would be exempt from levy of income tax. However, we cannot remain oblivion of the fact that the aforesaid contention has been raised by the assessee for the first time in the course of the proceedings before us. We thus, in terms of our aforesaid deliberations and in all fairness, set aside the matter to the file of the A.O. for the limited purpose of verifying the veracity of the factual matrix of the claim raised by the assessee. In case, the claim of the assessee that he had received the compensation on compulsory acquisition of his land under the National ....