ATAMJIT SINGH vs. COMMR. OF INCOME TAX-II, CENTRAL REV.

ITA/267/2005HC Punjab & HaryanaPHHC01075805200509 February 2016Author: MR. JUSTICE R.C. KATHURIA (RETD.),MS. JUSTICE NAVITA SINGH17 pages
AI SummaryDismissed

What were the facts?

The assessee, an individual, appealed against the order of the Income Tax Appellate Tribunal (Tribunal) for assessment year 1991-92. The appeal was admitted on the substantial question of law regarding the chargeability of interest under Sections 234A and 234B of the Income Tax Act, 1961. The assessee's land was acquired in 1979, and compensation was enhanced by the District Judge and the High Court. The enhanced compensation of ₹11,56,299 and interest of ₹15,78,607 for the period from 19.5.1982 to 27.10.1991 were received in November 1991. Tax deducted at source (TDS) of ₹1,72,861 was made on this interest. The Assessing Officer assessed the interest at ₹1,74,450 and directed the charging of interest under Sections 234A and 234B. The credit for TDS was allowed in assessment year 1992-93. The Commissioner of Income Tax (Appeals) and the Tribunal dismissed the assessee's appeals.

What did the High Court hold?

The High Court held that interest under Sections 234A and 234B of the Income Tax Act, 1961, was exigible in the facts and circumstances of the case. The Court referred to the Constitution Bench judgment in Commissioner of Income-Tax v. Anjum M.H. Ghaswala and others (2001) 252 ITR 1, which established that the levy of interest under Sections 234A, 234B, and 234C is mandatory, unlike the previous provisions where discretion existed. The Court noted that the use of the word 'shall' in these sections indicates a legislative intent to make the collection of statutory interest mandatory. The Court also distinguished the case of Commissioner of Income Tax, West Bengal-II, Calcutta v. Hindustan Housing and Land Development Trust Ltd. (1986) 161 ITR 524 (SC), stating that in the present case, the assessee had received payment of enhanced compensation along with interest in pursuance to the High Court's order, and it was not shown that the payment was conditional or that the right to receive compensation was in jeopardy. The quantification of compensation was assailed by the State, but there was no challenge to the legality of the acquisition proceedings. Therefore, the assessee could not derive any advantage from the cited pronouncements. The substantial question of law was decided against the assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, interest under Sections 234A and 234B of the Income Tax Act, 1961 was payable by the assessee in respect of assessment year 1991-92? Assessee's Contentions: The assessee argued that no taxable income accrued until the lis relating to the right to receive enhanced compensation along with interest attained finality, relying on Commissioner of Income Tax, West Bengal-II, Calcutta v. Hindustan Housing and Land Development Trust Ltd. (1986) 161 ITR 524 (SC). The assessee also relied on judgments like State of Punjab v. Amarjit Singh and another (2011) 2 SCR 617 (SC) and Commissioner of Income Tax v. Govindbhai Mamaiya (2014) 367 ITR 498 (SC), which were based on Commissioner of Income Tax v. Ghanshyam (HUF) (2009) 315 ITR 1 (SC). Revenue's Contentions: The revenue contended that interest under Sections 234A and 234B is mandatory and not waivable, citing the Constitution Bench judgment in Commissioner of Income-Tax v. Anjum M.H. Ghaswala and others (2001) 252 ITR 1. The revenue also pointed out that a judgment relied upon by the assessee, Commissioner of Income Tax v. Nahar Spinning Mills Ltd. (2011) 339 ITR 557 (P&H), was decided against the assessee on a similar issue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 234A,Section 234B,Section 143(3),Section 156,Section 28,Section 34,Section 115J,Section 234C

AI-generated summary — verify with the full judgment below

ITA No. 267 of 2005 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 267 of 2005 (O&M) Date of Decision: 9.2.2016 Atamjit Singh ....Appellant. Versus Commissioner of Income Tax-II, Jalandhar ...Respondent.

1.

Whether the Reporters of the local papers may be allowed to see the judgment?

2.

To be referred to the Reporters or not? YES

3.

Whether the judgment should be reported in the Digest? CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MRS. JUSTICE RAJ RAHUL GARG. PRESENT: Mr. Ravish Sood, Advocate for the appellant. Mr. Rajesh Sethi, Advocate for the respondent. AJAY KUMAR MITTAL, J.

1.

This order shall dispose of two appeals bearing ITA Nos. 267 and 268 of 2005 as according to learned counsel for the parties, the issue involved is identical. For brevity, the facts are being extracted from ITA No. 267 of 2005. 2. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 11.11.2004 (Annexure A-1) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as “the Tribunal”) in ITA No. 540(ASR)/1998, for the assessment year 1991- G

The order continues below.

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