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Income Tax Appellate Tribunal, PUNE „A‟ BENCHES :: PUNE
(A.Y. 2019-20) Manohar Machhindra Thakur, vs ITO, Ward-2, Panvel. Dhutum Uran, Raigad-400702 Maharashtra. PAN: AJJPT 7526 Q Appellant Respondent Assessee by : Shri Sharad Shah, AR Revenue by : Shri Umesh Phade, Addl.CIT Date of hearing : 20/03/2024 Date of pronouncement : 20/03/2024 ORDER
Per PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of National Faceless Appeal Centre [NFAC], Delhi, dated 31.10.2023 for A.Y.2019-20 as per the following grounds of appeal:- “1. The ld.AO erred in taxing and ld. CIT(A) erred in confirming the amount of interest received of Rs. 5,17,55,606/- u/sec. 28 of the Land Acquisition Act and thereby erred in taxing Rs. 2,58,77,803/- (after giving 50% deduction u/sec. 57(iv)).
2. Without prejudice to above, the ld.AO be directed to consider only my share i.e. 1/5th only as interest u/sec. 28 and that much only be taxed after giving 50% deduction.
3. The appellant craves its right to add to or alter the grounds of appeal at any time before or during the course of hearing of the case.”
2. The relevant facts in this care are that assessee is an individual and his ancestral agricultural land was compulsory acquired by Special Land Acquisition Officer Metro Center Urban-1 in 1994 & 1997. The Manohar Machhindra Thakur assessee filed two civil suits for enhancement of compensation. Accordingly, the Civil Court Senior Division Alibag passed order in favour of the assessee and awarded total compensation under Land Acquisition Act, 1894 of Rs. 6,72,37,570/- and Rs. 5,17,55,606/-. The Civil Court has passed the order in favour of all five family members, but Land Acquisition Officer had deducted TDS of Rs.52,01,832/- in the hands of the assessee only. While filing the return of income for the year under consideration, assessee had claimed full refund of Rs.52,0,832/- on behalf of all the family members. The AO has issued notice u/sec. 143(2) & 143(1) and sought clarification from the assessee. In reply, assessee submitted that acquired land was rural agricultural land and the compensation was of all the family members which was totally tax free. In support of his clam, he furnished tax free income, copy of civil court judgment, copy of award by the Collector, joint bank account etc. Since the assessee was unable to establish the fact of transfer of compensation to other joint owners of the property and also assessee himself claimed the refund of entire TDS, the AO made the addition of Rs. 2,58,77,803/- being 50% of income on Rs. 5,17,55,606/- u/sec. 57(iv) of the Act.
Being aggrieved by the order of AO, the assessee preferred appeal before the NFAC. The NFAC, after considering the detailed submissions made by the assessee as well as assessment order, has held at pra 5.5. of its order, as follows:- 2
Manohar Machhindra Thakur “5.5 I have perused the matter. Regarding the issue of interest on the enhanced compensation received by the appellant, the AO has rightly taxed the same as income from other sources based upon section 143(3) of the I.T. Act, 1961 which has been affirmed by Hon'ble Supreme Court in the case law cited by the Assessing Officer (AO). This assessment is therefore upheld and the ground of appeal No.1 to 6 & 9 are accordingly dismissed. Regarding the claim of appellant that his share is only 1/5th, the AO has rightly done so since (a) No separate return was filed the other co-owners. (b) The TDS was deducted only in one PAN belonging to appellant (c) No separate TDS claim was made by any of the co-owners. Thus, this ground is also held against the appellant.”
Aggrieved, assessee is in appeal before this Tribunal.
We are of the considered view that the NFAC while passing the order has not dealt with specifically with the submissions made by the assessee vis-à-vis various referred case-laws applicable in the case of the assessee. There has not been any independent application of mind and the NFAC has failed to come out with a speaking order. That, as a quasi judicial authority, it is a matter of common knowledge that the order passed by the NFAC should have to be a speaking order and the thought process which ultimately forms the result of the order should be brought out specifically in that order itself. In this case, we find that NFAC has passed a cryptic order bereft of any discussion on merits nor there is any adjudication vis-à-vis the submissions of the assessee and the applicability of laws therein. In view thereof, we set aside the order of NFAC and remand the matter back to its file for de novo adjudication and to pass a speaking order with application of mind as per law through proper verification and examination of facts 3
Manohar Machhindra Thakur and documents, complying with the principles of natural justice.
As per the above terms, the grounds of appeal are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in open Court on 20th March, 2024.