SMT. N. KRISHNA SYAMALA,GUNTUR vs. THE PR. CIT, GUNTUR

PER V. DURGA RAO, Judicial Member:

This appeal filed by the assessee is directed against order of the Principal Commissioner of Income Tax, Guntur dated 1.3.2016 for the assessment year 2011-12. 1

had filed return of income by admitting income at Nil. The case of the assessee was selected for scrutiny and after due process, assessment

was completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter

called as 'the Act').

“It is found that the assessee has received an amount of ` 49,00,241/- towards compensation against land acquisition. On verification of statement of capital gains, it is noticed that the assessee claimed exemption u/s 10(38) of the I.T. Act, 1961 which is applicable for income arising from transfer of long term capital asset being an equity share in a company. In absence of proper evidence on record, the assessee is also not eligible to claim exemption u/s 10(37) of the I.T. Act, 1961. However, the said issue was not considered in the assessment order u/s 143(3) dated 18.3.2014.”

Authority of India and claimed exemption u/s 10(38) of the Act is a mistake in typing. In fact the claim of exemption is u/s 10(37) of the Act. This fact is brought to the notice of the A.O. The details were also filed during the course of assessment proceedings and therefore

requested that proceedings u/s 263 of the Act may be dropped.

is erroneous and prejudicial to the interest of the revenue and directed

the A.O. to examine whether the claim of exemption by the assessee u/s 10(38) of the Act instead of exemption u/s 10(37) of the Act if it is found that the assessee’s claim is for exemption u/s 10(37) of the Act.

The A.O. is directed to examine the provisions of section 10(37) of the Act by making necessary enquiries whether the claim of the assessee

covers the sub clause (i)(ii) & (iii) of section 10(37) of the Act and to decide afresh as per the provisions of law after giving reasonable

opportunity of being heard to the assessee. Accordingly, he set aside

the assessment order passed by the A.O. u/s 143(3) of the Act dated

order is passed u/s 143(3) of the Act, therefore, the order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue

and requested that the order passed u/s 263 of the Act may be quashed.

without making any enquiry that whether assessee’s agricultural land is acquired by the National Highway Authority of India or not, he has passed the assessment order and even without examining anything

whether it is exempt income or not. Therefore, submitted that the order

passed by the A.O. is erroneous and prejudicial to the interest of the revenue and prayed that the order passed by the Pr. CIT may be upheld.

on record and gone through the orders of the authorities below. The case of the assessee is that he has received a compensation from National Highway Authority of India and the same is exempt u/s 10(37)

of the Act. It is mistakenly mentioned as u/s 10(38) of the Act. The A.O. without making any enquiry whether the amount received by the assessee from National Highway Authority of India is exempt u/s 10(38)

or 10(37) of the Act completed the assessment u/s 143(3) of the Act.

From the paper book filed by the assessee, we find that the only details filed by the assessee before the A.O. is compensation received on land

acquisition. Except that, there is nothing on record. Even we find from the assessment order that the A.O. has not made any enquiry that whether the land acquired by National Highway Authority of India is an agricultural land for the purpose of exemption u/s 10(37) of the Act. It is a bounden duty of the A.O. to make a detailed enquiry/investigation

whether the assessee has claimed entire amount received as an exemption and filed a nil return on the ground, no tax is payable. In this case, the A.O. has not made any enquiry and whether the claim

made by the assessee is exempt or not. The A.O. neither made any enquiry nor investigation in respect of claim made by the assessee.

Under these facts and circumstances of the case, we are of the opinion

that the order passed by the A.O. is erroneous and also prejudicial to the interest of the revenue. Further, the Commissioner while exercising

the powers u/s 263 of the Act, directed the A.O. to make an enquiry in respect of the exemption claimed by the assessee after giving

opportunity to the assessee. Therefore, we find no infirmity in the order

passed by the Commissioner u/s 263 of the Act and no inference is called for. In view of the above, the appeal filed by the assessee is dismissed.

The above order was pronounced in the open court on 6th Apr’18. ( ड.एस. . . . सु"दर "संह) (वी. दुगा"राव) (D.S. SUNDER SINGH) (V. DURGA RAO) लेखा सद"य/ACCOUNTANT MEMBER "या"यक सद"य/JUDICIAL MEMBER #वशाखापटणम /Visakhapatnam: 'दनांक /Dated : 06.04.2018 VG/SPS

आदेश क" ""त)ल#प अ*े#षत/Copy of the order forwarded to:-

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