C I T vs. TEK RAM

ITA No.491 of 2007 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.491 of 2007 Date of decision: 20.2.2008 Commissioner of Income tax, ......Appellant Faridabad Versus Shri Tek Ram, HUF s/o Shri Asha Ram, Vill. Jharsaintly, Ballabgarh, Faridabad

......Respondent CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Yogesh Putney, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . The revenue has filed the present appeal under Section 260-A of the Income Tax Act against the order dated 19-04-2007 passed by the Income Tax Appellate Tribunal, Delhi Bench 'H' New Delhi in ITA No.327/DEL/2006 for the Asstt. Year 1996-97 raising the following substantial questions of law:- (a) Whether the Hon'ble ITAT was right in law in deleting the penalty levied u/s 271(1)(c) of Income Tax Act, 1961 whereas it had already confirmed the addition made u/s 45(5) of the Income Tax Act on account of enhanced compensation received during the previous year relating to Asstt. Year 1998-99 ? (b) Whether on the facts and circumstances of the case, the Hon'ble ITAT was right in holding that the view of assessee regarding non taxability of enhanced

ITA No.491 of 2007 2 compensation was bona fide particularly in view of provisions of Section 45(5) of Income Tax Act?” On the basis of information received from HUDA office, Faridabad that the assessee-respondent received additional compensation as well as interest on additional compensation on acquisition on land by the State Government, proceedings were initiated u/s 148 on 21.10.98 in the case of Sh.Tek Ram, HUF for the assessment year 1996-97. In response, the assessee filed return declaring an income of Rs.47,310/- on 30.03.99 in the status of Individual. The assessment was completed u/s 143(3) of Income Tax Act in the status of HUF by the then ITO Ward-8, Faridabad vide order dated 31.1.2001 at an income of Rs.47,90,850/-. This order was later on set aside by Ld.CIT(A) vide consolidated order for the assessment years 1996-97, 1997-98 and 1998-99 dated 20.4.2001. Thereafter the assessment was framed again vide assessment order dated 21.1.2003 and it was held that enhanced compensation and interest on the enhanced compensation is taxable. Vide this order, penalty proceedings under Section 271(1)(c) of the Act were also ordered to be intiated separately. The Income Tax Officer, Ward-1(3), Faridbad vide his order dated 28.3.2005 held that he is satisfied that the assessee has concealed the particulars of his income amounting to Rs.49,04,535/- for assessment year 1998-99 and therefore, the assessee is liable to pay penalty under Section 271(1)(c) of the Act, equal to 100% of tax sought to be evaded. The appeal filed by the assessee against the order of the penalty proceedings was accepted by the Commissioner of Income Tax (Appeals), Faridabad vide his order dated 25.11.2005. While allowing the appeal, the Commissioner of Income Tax (Appeals) held that the taxability of the enhanced compensation and interest thereon is the matter of litigation and the issue has not been finally

ITA No.491 of 2007 3 settled and therefore, there was a bona fide belief on the part of the appellant that this income could not be subjected to tax and under these circumstances, no penalty under Section 271(1)(c) could be imposed. The appeal filed by the Revenue before the Tribunal against the order of the Commissioner of Income Tax(Appeals) was also dismissed on 19.4.2007. Mr. Yogesh Putney, Advocate, learned counsel for the Revenue-appellant has very fairly conceded that the present appeal is covered by a judgement (ITA No.579 of 2007 ) of this Court dated 4.2.2008 wherein similar question of law on the similar facts were raised by the revenue and the appeal filed by the Department-revenue has been dismissed by this Court and it has been held no question of law arises. In view of the fair stand taken by the learned counsel for the appellant, we find no ground to interfere in the findings of fact given by the Tribunal. Thus, no substantial question of law arises in the present appeal and the same is dismissed. (RAKESH KUMAR GARG) JUDGE February 20, 2008 (SATISH KUMAR MITTAL) ps

JUDGE