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Facts
The assessee received compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Re-settlement Act, 2013, which they claimed as Long Term Capital Gain and offered for tax. Later, they realized this compensation was exempt under Section 96 of the Act and CBDT Circular No. 36/2016. They sought rectification of the initial order under Section 154 of the Act to treat the compensation as exempt, but their application was rejected.
Held
The Tribunal held that the appeal was erroneously transferred and decided by the Addl/JCIT(A) as the issue involved the rejection of a Section 154 application, and the appeal was filed under Section 246A, not Section 246. Therefore, the order passed by the Addl/JCIT(A) was beyond their jurisdiction.
Key Issues
Whether the appeal against the rejection of a Section 154 rectification application filed under Section 246A of the Income Tax Act, 1961, was correctly adjudicated by the Addl/JCIT(A) Ahmedabad.
Sections Cited
154, 234C, 96, 246A, 246
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA&
Date of Hearing 30.03.2026 Date of Pronouncement 08.04.2026 O R D E R PER ANUBHAV SHARMA, JM: Thisappealis preferred by the assessee against the order dated 12.11.2025 of the Ld. Addl/JCIT(A)-1 Ahmedabad (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN& Order No.: ITBA/APL/S/250/2025-26/1082508666(1) arising out of the order dated P a g e | Pepup Sports Ltd. (AY: 2016-17) 20.07.2020 u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the AO for AY: 2016-17.
On hearing both sides we find that assessee’s return was processed u/s 143(1) of the Act and a rectification application was filed challenging the levy of interest u/s 234C of the Act which was rejected by the CPC vide order dated 21.01.2017. Then assessee came to know of the fact and law that compensation received under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Re-settlement Act, 2013 reported as Long Term Capital Gain in the return filed, was an exempt income u/s 96 of the said Act and CBDT Circular No. 36 dated 25.10.2016. However,the revised ITR filing date has expired on 31.03.2018 so assessee preferred an application u/s 154 of the Act before assessing officer on 22.06.2020 and thereafter on 01.07.2020 requiring assessing officer to rectify the intimation order dated 04.01.2017 so as to treat compensation received as exempt from tax and refund the income tax paid by the assessee offered as same as LTCG. As the application was rejected by impugned order dated 20.07.2020 for which assessee preferred appeal before ld. CIT(A) u/s 246A of the Act on 13.08.2020 which has been dismissed by the impugned order P a g e | Pepup Sports Ltd. (AY: 2016-17) dated 12.11.2025passed by ld. Additional/JCIT-1, Ahmedabad holding that the same is inadmissible in terms of the provisions of Section 246(1)(h) of the Act.
On hearing both sides we find that the impugned order has been passed by ld. First Appellate Authority Addl/JCIT(A)-1 Ahmedabad while the issue involved was the challenge of impugned rejection of application u/s 154 of the Act and the appeal was filed u/s 246A of the Act and not u/s 246 of the Act. Therefore, the appeal was supposed to be heard and decided by ld. CIT(A) and the transfer of the appeal to ld. Addl/JCIT(A)-1 Ahmedabad was beyond jurisdiction.
In the light of aforesaid facts and circumstances we are of the considered view that the appeal needs to be restored to the ld. First Appellate Authority to be decided afresh by ld. CIT(A).In aforesaid terms the appeal of assessee is allowed.