KARNAIL SINGH,PATIALA vs. INCOME TAX OFFICER, WARD NO. 4,, PATIALA

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ITA 1110/CHANDI/2024Status: DisposedITAT Chandigarh19 August 2025AY 2020-21Bench: SHRI RAJPAL YADAV (Vice President), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal accepted the assessee's appeal, setting aside the impugned order and restoring the assessment to the file of the Assessing Officer for a de novo assessment. This allows the assessee a fresh opportunity to present evidence and arguments to substantiate the claim for exemption.

What were the facts?

The assessee received compensation for compulsory acquisition of land and interest thereon. The Assessing Officer framed an assessment under Section 144 read with Section 144B, considering it taxable, as the assessee failed to make submissions. This assessment was upheld by the CIT(A). The assessee now contends that the land is rural agricultural and therefore, the compensation received should be exempt from tax.

What were the issues?

Whether compensation for compulsory acquisition of rural agricultural land and interest thereon is exempt from tax, and whether the assessee should be granted another opportunity to submit evidence and arguments before the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2020-21 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 27-03-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s. 144 r.w.s. 144B of the Act on 06-09-2022. The registry has noted delay of 160 days in the appeal, the condonation of which has been sought by Ld. AR.

2.

In the assessment order, Ld. AO brought to tax compensation received by the assessee on compulsory acquisition of assessee’s land by appropriate authority as well as interest received on such compensation. The assessee failed to make any submissions during assessment proceedings. The position remained the same during first appeal which led to confirmation of assessment order against which the assessee is in further appeal before us. The Ld. AR stated that the land in question is a rural agricultural land and therefore, the compensation so received would be exempt from tax. The Ld. AR stated that the assessee is in a position to substantiate its case and accordingly, sought another opportunity of hearing before lower authorities which ash been opposed by Ld. Sr. DR.

3.

Accepting the prayer of Ld. AR, we admit the appeal and set aside the impugned order and restore the assessment back to the file of Ld. AO for de novo assessment with a direction to the assessee to plead and prove its case forthwith. 4. The appeal stand allowed for statistical purposes. Order pronounced on 19-08-2025. (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 19-08-2025. आदेश की "ितिलिप अ"ेिषत /Copy of the Order forwarded to : 1. अपीलाथ"/Appellant 2. ""थ"/Respondent 3. आयकरआयु"/CIT 4. िवभागीय"ितिनिध/DR 5. गाड"फाईल/GF

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