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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. N. K. Saini, Hon’ble & Sh. Sudhanshu Srivastava
ORDER
Per N. K. Saini, Vice President:
This is an appeal by the department against the order dated 17.12.2014 of ld. CIT, Hisar u/s 263(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act).
2. Following grounds have been raised in this appeal:
1. On the facts and in the circumstances of the case and in law the order u/s 263 of the Income-tax Act, 1961 dated 17-12-2014 passed by the Commissioner of Income- tax, Hisar is devoid of jurisdiction as no error prejudicial to' the interest of the Revenue has neither been identified nor brought on record and so must be quashed.
Additionally the order u/s 263 of the Income-tax Act, 1961 based on doubts, suspicion, assumptions, presumptions and conjectures and not on the material on record of the proceedings is erroneous and vitiated and not being according to law must be quashed.
3. That the order of revision passed u/s 263 of the Income-tax Act, 1961 proposing a. redoing of the assessment merely because certain material connected with the issues in assessment are not on record and so, in the opinion of the Commissioner, necessary or proper enquiry/verification has seemingly not been made is untenable on facts and law and unsustainable as such, and must be quashed. 4. That Commissioner of Income-tax, Hisar had passed the order u/s 263 of the Income tax Act, 1961 on 17-12- 2014 holding the order of assessment u/s 143(3) passed by A.O. on 23-12-2010 was restored (back) to the Assessing Officer for making fresh assessment. A.O. has framed fresh assessment on 26-03-2014 Appeal against the order u/s 263 of the Commissioner of Income tax is pending before the ITAT, Delhi and appeal against the order u/s 143(3)/263 of the A.O. is pending before the Commissioner of Income tax (Appeals). Therefore, order again passed u/s 263 and order passed u/s 263 during the pendency of appeal is ab initio, illegal and invalid and must be quashed. 5. That the finding u/s 263 of the Income-tax Act, 1961 of the Commissioner of Income- tax that the assessment needs be redone because Assessing Officer had completed the assessment u/s 143(3)/263 and AO reached the conclusion that interest received by assessee is taxable as discussed in the assessment order dated 26-03-2014. However, while computing taxable income, the AO failed to make the addition in respect of the said interest income is per se erroneous and untenable and must be quashed.
6. That the opinion of the Commissioner of Income-tax that the interest has been received u/s 28 of Land Acquisition Act, which is part of enhanced compensation as per judgement of Hon'ble Supreme Court in the case of Ghanshyam (HUF), therefore, he had to intercede u/s 263 of the Act is ab initio erroneous and unsustainable because the point at issue having already merged into the order of the CIT (Appeals) was statutory barred from his consideration and further then on merits also the CIT’s observations are erroneous and untenable and so must be quashed.
That the issue regarding exemption of interest from taxation having already been considered by the CIT (Appeals) was statutorily beyond the powers of the Commissioner u/s 263 of the Act and so his intervention on this ground is ab initio illegal and invalid and must be quashed. 8. That the action of the Commissioner of Income-tax in calling for various extraneous documents and material for examination and investigation during the course of the proceedings u/s 263 of the Income-tax Act, 1961 and in thereafter holding that the assessment is erroneous and prejudicial to the interest of the Revenue is erroneous and bad and must be quashed. 9. That interest received on enhanced compensation is not taxable till the final decision c; appeal, tiled by the Estate Officer, Haryana Urban Development Authority (HUDA) Supreme Court of India regarding enhanced compensation. Therefore, during the pendency of appeal in Supreme Court, order passed by Commissioner of Income tax u/s 263 of the Income tax Act is ab initio, illegal and invalid and must be quashed. 10. That as per finding of the Commissioner of Income tax, interest u/s 28 of Land Acquisition Act is part of compensation/enhanced compensation. Then enhanced compensation is not taxable, as it is exempt u/s 10(37) of the Income tax Act, 1961. Therefore, order passed u/s 263 by the Commissioner of Income Tax is illegal, invalid and must be quashed.”
During the course of hearing, the ld. Counsel for the assessee submitted that earlier also the ld. CIT, Hisar passed the order u/s 263 of the Act and directed the AO to reframe the assessment, consequently the AO passed the assessment order dated 26.03.2014. However, the ld. CIT, Hisar again exercised his power u/s 263 of the Act and passed the impugned order. It was pointed out that the original order dated 28.03.2013 passed by the ld. CIT, Hisar u/s 263 of the Act was set aside by the ITAT Delhi Bench ‘H’, New Delhi in for the assessment year 2008-09 vide order dated 20.05.2016 (copy of the said order was furnished which is placed at page nos. 130 to 137 of the assessee’s compilation). It was further submitted that since the impugned order has been passed by the ld. CIT, Hisar by setting aside the assessment order dated 26.03.2014 which was inconsequence to the directions given by the ld. CIT, Hisar u/s 263 of the Act vide order dated 28.03.2013 which has been set aside by the ITAT. Therefore, this appeal now becomes infructuous as the assessment order which has been considered by the ld. CIT, Hisar, vide this impugned order is not maintainable now. Therefore, the appeal of the assessee may be treated as infructuous.
In his rival submissions, the ld. CIT DR could not controvert the aforesaid contention of the ld. Counsel for the assessee.
We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the ld. CIT, Hisar passed the impugned order by exercising his powers u/s 263 of the Act, against the assessment order dated 26.03.2014 which was passed by the AO in consequence to the directions given by the ld. CIT, Hisar vide order dated 28.03.2013. The said order dated 28.03.2013 of the ld. CIT, Hisar was set aside by the ITAT Delhi Bench ‘H’, New Delhi vide order dated 20.05.2016. Therefore, the assessment order dated 26.03.2014 passed in consequence to the order dated 28.03.2013, considered by the ld. CIT, Hisar while passing the impugned order is not maintainable. Therefore, the impugned order passed by the ld. CIT, Hisar deserves to be set aside. In that eventuality, this appeal of the assessee becomes infructuous.
In the result, the appeal of the assessee is dismissed as infructuous. (Order Pronounced in the Open Court on 26/11/2018)