SUKHDEV RAJ,SIRSA vs. INCOME TAX OFFICER, SIRSA

Ld. DR strongly opposed the condonation of delay.

We have carefully considered the application filed by the assessee for condonation of delay of 181 days in filing the appeal against the order of the learned CIT(A) dated 30.08.2024. As per section 253 of the Income-tax Act, the appeal was required to be filed within sixty days from the date of service of the impugned order. However, due to the unfortunate circumstances explained by the assessee namely that his Chartered Accountant, Late Shri

In the present appeal the assessee has raised following grounds: 1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147/144B of the Act without appreciating that the same were without juri iction and hence deserved to be quashed as such.

That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre has also erred both in law and, on facts in upholding an addition of Rs. 20,46,383/- of interest received on enhanced compensation on compulsory acquisition of agricultural land received u/s 28 of Land Compensation Act' 1894 and eligible for exemption u/s 10(37) of the Act.

1 That while sustaining the aforesaid addition the learned Commissioner of Income Tax (Appeals) has further erred both in law and on fact in not following the binding judgments of Apex Court: v) C.A.No. 18475/2017 dated 10.11.2017 ITO v. Muktanandgiri Maheshgiri

That the learned Commissioner of Income Tаx (Appeals) has further erred both in law and on fact in sustaining the view taken by learned Assessing Officer of making addition by invoking section 56(2)(viii) read with section 57(iv) of the Act and 145A(b) of the Act to sustain the impugned addition.

That even otherwise the learned Commissioner of Income Tax (Appeals) passed the order without granting sufficient proper opportunity to the appellant and therefore the same is contrary to principle of natural justice and hence vitiated.

That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the levy of interest of Rs. 1,00,521/- u/s 234A of the Act, interest of Rs. 6,38,604/- u/s 234B of the Act which are not leviable on the facts of the appellant.

In the present appeal, the assessee has filed a petition seeking permission to raise and argue additional grounds, which are purely legal in nature. The proposed additional grounds are reproduced below: 1. "That the order of assessment u/s 147/144B of the Act passed by the National Faceless Assessment Centre is without juri iction in as much as notice dated 09.02.2022 u/s 143(2) of the Act and other notices u/s 142(1) of the Act including show cause notice dated 19.03.2022 issued by National Faceless Assessment Centre, Delhi, on the contrary faceless regime for income escaping assessment stood notified only on 29-3-2022

That the notice issued on 09.02.2022 u/s 143(2) of the Act is not in accordance with CBDT notification dated 23.6.2017 vide F. No. 225/157/2017/ITA-II"

Upon careful consideration, we find that all relevant facts necessary for adjudication of these grounds are already available on record, and therefore no further investigation of facts is warranted. It is a well-settled legal position that a legal ground can be raised at any stage of appellate proceedings, provided it arises from the facts already on record. The Hon’ble Supreme Court, in the landmark decision of National Thermal Power Co. Ltd. vs. CIT (229 ITR 383), has held that where the Tribunal is required to consider a question of law arising from facts available in the assessment records, there is no reason to deny admission of such ground if it assists in determining the correct tax liability. Further, the Hon’ble Bombay High Court in CIT vs. Pruthvi Brokers & Shareholders (P) Ltd. (349 ITR 336) has affirmed that appellate authorities possess juri iction not only to entertain additional legal submissions but also to consider fresh claims that were not raised before the Assessing Officer, and that such authority must be exercised liberally in the 4

Briefly the facts of the case are that the Assessee, filed his original Return of Income (ITR) for Assessment Year (A.Y.) 2013-14 on 28.03.2015, declaring a taxable income of Rs. 4,26,650/- and claiming an exempt income of Rs. 86,60,631/-, which included enhanced compensation and interest thereon from the Land Acquisition Officer, Hisar. Crucially, the Assessee received interest income amounting to Rs. 40,92,765/- during the year, on which Tax Deducted at Source (TDS) was effected and reflected in Form 26AS, but this amount was not offered for taxation in the ITR. Consequently, the case was reopened under Section 147 of the Income-tax Act, 1961, and a notice under Section 148 was issued on 24.04.2020. The Assessee subsequently furnished a return declaring the same income and arguing that the interest received under Section 28 of the Land Acquisition Act, 1894, on compulsory acquisition of agricultural land, was a capital receipt exempt from tax, relying primarily on the Hon'ble Supreme Court decision in CIT vs. Ghanshyam Dass HUF (2009) 315 ITR (SC). 8.1 The AO rejected the Assessee's contention, holding that the statutory amendments introduced by the Finance Act, 2009, specifically the insertion of Section 56(2)(viii) and Section 145A(b), superseded the judicial precedent cited by the Assessee. The AO found that, effective from A.Y. 2010-11, interest received on compensation or enhanced compensation is statutorily chargeable to tax under the head 'Income from Other Sources' in the year of 5

Per contra, the Ld. DR supported the orders of the authorities below and submitted that the issue is squarely covered against the assessee by the decision of the Chandigarh Bench in Ajay Kumar vs ITO (ITA No. 463/Chd/2023), forming part of the consolidated order in land-acquisition matters.

1 It was argued that after insertion of sections 56(2)(viii) and 145B(1), all interest received on compensation or enhanced compensation whether under section 28 or 34 is taxable in the year of receipt, and the earlier judgments relied upon by the assessee relate to the pre-amendment position. It was further submitted that the assessee cannot claim TDS credit without offering the corresponding income to tax.

We have carefully considered the rival submissions and examined the record. We observe that the Coordinate Chandigarh Bench, in the case of Ajay Kumar (supra), has already adjudicated identical arguments. The Bench ruled that interest on compensation falls within the ambit of Section 56(2)(viii) and is taxable in the year of receipt pursuant to Section 145B(1). The Bench explicitly rejected the applicability of Section 10(37) to the interest component and clarified that claiming TDS credit is contingent upon the income being offered to tax. The facts in the instant case are materially identical.

1 In respectful adherence to the binding precedent of the Coordinate Bench in Ajay Kumar, we affirm the Ld. CIT(A)'s decision to sustain the addition. The assessee has failed to adduce any distinguishing features or contrary legal propositions that would justify a departure from the settled view of this Bench.

In the result, the appeal of the assessee is dismissed.

During the proceedings before us the assessee has taken the additional ground regarding issuance of notice under section 142(1) and 143(2) of the Act by the NFAC, Delhi.

The Ld. AR argued that the notice were issued on 09/02/2022 under section 143(2) was not in accordance with CBDT notification dt. 23/06/2017 vide F. No. 225/157/2017/ITA-II.

We have considered this issue and we find that the notification issued by the CBDT as referred by the Ld. AR is clarificatory in nature. In fact, the 8

In the result, both the appeal of the assessee and the additional ground raised therein stand dismissed.

अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File