BALKAR SINGH,HARYANA vs. ITO. WARD-1, SIRSA, HARYANA

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ITA 1844/CHANDI/2025Status: DisposedITAT Chandigarh14 July 2026AY 2018-194 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the AO was justified in taxing the interest income as the issue was settled by the jurisdictional High Court's judgment. The AO had to follow the binding precedent.

What were the facts?

The Assessing Officer (AO) initiated proceedings under Section 154 to tax interest income on enhanced compensation, which was initially treated as exempt. The CIT(A) dismissed the assessee's appeal, upholding the AO's order.

What were the issues?

Whether the AO was justified in rectifying the original order under Section 154 to tax interest income on enhanced compensation, given a binding High Court judgment.

Which sections of the Income-tax Act were involved?

Section 154,Section 56(2)(vii),Section 143(3),Section 145B

AI-generated summary — verify with the full judgment below

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “A” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE �ी लिलत कुमार, �ाियक सद� एवं �ी मनोज कुमार अ�वाल, लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 1844/Chd/2025 �नधा�रण वष� / Assessment Year : 2018-19 बनाम Balkar Singh, ITO, House no. 13/1189, Ward-1, Near Huda Chowk, Sirsa, Sirsa Haryana 125055 �ायी लेखा सं./PAN NO: AINPD5343C अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Sh. Parikshit Aggarwal, CA राज� की ओर से/ Revenue by : Sh. Vivek Vardhan, Addl. CIT, Sr.DR सुनवाई की तारीख/Date of Hearing : 05.07.2026 उदघोषणा की तारीख/Date of Pronouncement : 14.07.2026 आदेश/Order PER LALIET KUMAR, J.M: This appeal has been preferred by the assessee against the order dated 13.10.2025 passed by the learned Addl./JCIT(A)-4, Mumbai for Assessment Year 2018-19, passed u/s 250 of the Income Tax Act, 1961 (in short 'the Act').

2.

Brief facts are that in this case order u/s. 154 of the I.T.Act was passed by the ITO, Ward-1, Sirsa on 24.01.2025 wherein the interest income of Rs.70,02,060/- on enhanced compensation received on

2 1844/Chd/2025 compulsory acquisition of agriculture land treated as exempt in the order u/s.143(3) of the Act has been charged to tax u/s.56(2)(vii) of the Act by invoking the provisions of section 154 of the Act suo-moto by the AO. Being aggrieved, the Assessee preferred by the order of the AO, the Assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal of the Assessee observing that in the present case there was a mistake apparent from record in the original order passed u/s. 143(3) read with sections 143(3A) & 143(3B) of the Income-tax Act passed on 09.01.2021. The Ld. CIT(A) dismissed the appeal of the Assessee by upholding the order passed by the Assessing Officer and the hence the Assessee is in appeal before the Tribunal.

3.

The Ld. Counsel for the Assessee reiterated the submissions made before the lower authorities and the Ld. DR relied on the orders passed by the CIT(A).

4.

We have heard the rival submissions and perused the material available on record. The solitary issue arising for our consideration is whether the Assessing Officer was justified in declining to grant the relief sought by the assessee in proceedings under section 154 of the Income-tax Act, 1961.

5 It is an admitted position that, on the date of passing the impugned order, the issue relating to the taxability of interest

3 1844/Chd/2025 received on enhanced compensation stood concluded by the judgment of the Hon'ble Jurisdictional Punjab & Haryana High Court in the case of Manjit Singh Narang, wherein it has been categorically held that the interest received on enhanced compensation is chargeable to tax under the provisions of section 56(2)(viii) read with section 145B of the Act. Once the law has been declared by the Hon'ble Jurisdictional High Court, the same becomes binding upon all authorities functioning within its territorial jurisdiction. Consequently, the Assessing Officer had no option but to follow the law so declared and could not have passed any order allowing or modifying the relief claimed by the assessee contrary to the binding judgment of the Hon'ble Jurisdictional High Court.

6.

In this regard, we find that in the recent order passed in a group of seven appeals filed by the different aseessees, with leading appeal ITA No. 217/Chd/2023 for the A.Y. 2015-16 in the case of Sudarshan Kumar Garg and Others, Sangrur, this issue has been dealt upon by the Coordinate Bench of this Tribunal, dt. 14.7.2026, and the Tribunal has decided the issue against the Assessee. Since the issue raised is squarely covered by the aforesaid decision of the Tribunal, therefore, respectfully following the ratio laid down by the

4 1844/Chd/2025 Coordinate Chandigarh Bench of the Tribunal, this appeal is decided against the Assessee. 7. In the result, appeal of the Assessee stands dismissed. Order pronounced in the Open Court on 14. 07.2026.

Sd/- Sd/- (MANOJ KUMAR AGGARWAL ) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER rkk आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar

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