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Dev Raj Kataria Versus DCIT, Panipat Circle, Panipat

2016 (9) TMI 1186 - ITAT DELHI

Reopening of assessment - Held that:- There is no bar under the I.T. Act, 1961 regarding issue of notice u/s 148 of the Act after completion of assessment u/s 143(1) of the Act. The Assessing Officer had satisfied the ingredients of section 147 of the Act and therefore, it was open to the Assessing Officer to exercise that power, not with-standing the fact that there were other remedies open to him under the Act. - Taxability on amount received - relevant assessment year - amount admittedly .....

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the authorities below. Tthus CIT(A) was not justified in charging to tax the amount of interest received in the year, which obviously did not relate to the year in question. - A careful perusal of the provision indicates that the credit for TDS can be allowed only for the assessment year for which the corresponding income is offered for taxation. There can be no question of allowing credit for the TDS in the assessment of a year for which the matching income is not offered for taxation. In .....

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n. The patent reason for not disallowing credit for such TDS by the AO is that he charged to tax the entire interest income in the year in question and impliedly following the prescription of section 199, allowed the credit for TDS. As the interest income is held to be not chargeable to tax in the year under consideration, the assessee cannot be allowed to avail credit for TDS on such interest income against tax on his other income. To sum up, the interest income of Rs.Rs.13,91,472/ - is not cha .....

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-05 on the following grounds of appeal: 1. On the facts and circumstances of the case, order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] !s bad both in the eye of law and on facts. 2 (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the appellant that the reassessment proceedings initiated by the AO are against the statutory provisions of the law and hence liable to be quashed. 3. On the fa .....

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T(A) has erred both on facts and in law in considering the return filed for earlier assessment years before AO as additional evidences under Rule 46A. 6. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting to take into consideration the revised returns filed for earlier assessment years which clearly demonstrate that the interest income has been duly accounted for in the year to which it pertains and hence the addition made in the year u .....

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ertificate issued by the Acquisition Officer. 8. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the appellant that taxing the entire interest of ₹ 13,91 ,426/- will tantamount to double taxation of the same income. 9. On the facts and circumstances of the case, the order passed by the learned CIT(A) is perverse and liable to be quashed. 2. Ground No.1 is general in nature hence, do not require adjudication. 2. .....

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dated 15.12.1982. The total amount of ₹ 13,91,472/- being his 1/4th share of the interest was spread over on entire period from 27.09.1985 to 15.02.2002 in the following manner: Asstt. Year Period Rate of interest Amount of interest 1986-1987 186 days (27.09.85 to 31.03.1986) 9% 26,606.02 1987-1988 179 days(01.04.86 to 26.09.86) 9% 25,608.16 1988-89 to2001-02 186 days(27.09.86 to 31.03.87) 15% 44,347.26 2002-03 14 full years 15% 87,023.66x14 =12,18,331.24 321 days (01.04.01 to 15.02.02) 15 .....

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1) dt.24.12.2003 87,024/- 4,33,574/- 30.09.2004 2000-01 3,29,760/- (u/s 154 on 24.12.03) 87,024/- 4,16,784/- 30.09.2004. 2.3 For the year under consideration, the assessee had claimed the TDS deducted on the enhanced compensation received in the return of income filed. The Assessing Officer initiated proceedings u/s 148, alleging that interest on enhanced compensation amounting to ₹ 13,91,427/- received by the assessee from Land Acquisition Officer in November, 2003 has escaped assessment. .....

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r Issue of Notice u/s 148 of the Income tax Act. 1961: The assessee filed return of income on 30/9/2004, declaring an income of ₹ 4,20,760/-. The assessee derived income from9 business, house property and interest income. The return was processed u/s 143(1) dated 17/6/2005 and a refund of ₹ 1,27,953/- was issued on 4/7/2005. Later on, on examination of the return, it is seen that during the year under consideration, the assessee has received interest on enhanced compensation amountin .....

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3. The assessee objected the notice issued by the A.O. u/s 148 of the Act on the contention that the said income already stood disclosed in the earlier Assessment Years. The Assessing Officer however, made addition on the ground that the assessee had furnished inaccurate particulars of income to n extent of ₹ 13,91,426/-. 4. Aggrieved by the order of the Ld. A.O., the assessee preferred an appeal before Ld. CIT(A). Before Ld. CIT(A), the assessee relied upon various Hon'ble Supreme Co .....

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b Tractors Ltd. VSs ACIT reported in 245 ITR 242. 4.1 Aggrieved by the order of Ld. CIT(A), assessee is in appeal before us. 5. In respect of Ground No.2(i) and 3, the ld. AR submitted that the ld.AO issued notice u/s 148 of the Act in spite of the fact that time to issue notice u/s 143(2) was available. 5.1 It has been submitted by the Ld. A.R. that enhanced compensation including other statutory benefits provided u/s 23(IA), 32(2) and 28 of the Land Acquisition Act, 1894, are exempt from I.T. .....

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ceived. He submitted that the enhanced interest received does not pertain to the financial year relevant to Assessment Year under consideration. It pertained to the period from effective date of compensation to the actual date of decision of the Court. He referred to and relied upon the decision of Hon'ble Jurisdictional High Court in the case of Tuhiram Vs Land Acquisition Collector and others (supra), wherein the Hon'ble Punjab & Haryana High Court had mandatorily required the spre .....

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Year under consideration even though the interest income was spread over in the earlier Assessment Years. He vehemently emphasized on the fact that the assessee had not concealed any income, as he had voluntarily revised his return of income for the relevant Assessment Year along with earlier Assessment Years. It has been submitted that the reopening is not valid as the assessee has not filed any inaccurate particulars of its income and the assessee was under bona fide belief that the ratio laid .....

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i.e., after completion of assessment u/s 143(1) of the Act. In our view, there is no bar under the I.T. Act, 1961 regarding issue of notice u/s 148 of the Act after completion of assessment u/s 143(1) of the Act. The Assessing Officer had satisfied the ingredients of section 147 of the Act and therefore, it was open to the Assessing Officer to exercise that power, not with-standing the fact that there were other remedies open to him under the Act. 6.2 It is observed that Ld. CIT(A) has dealt wit .....

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s under:- "In our view, the intimation under section 143(1) operates as an order of assessment unless the authority proceeds to give notice under section 143(2) and passes an order under section 143(3). Furthermore, if the competent authority has reason to believe that income had escaped assessment while issuing intimation under section 143(1), it can proceed under section 148. The absence of order under section 143(3) is no bar and finally the Hon'ble Court in this case concluded as un .....

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Ramesh Chander Singla Vs. CIT(A) 2 ANR (2011) 330 ITR 28S (P&H) . The catch note from that decision is reproduced be1ow:- "The assessee, a Development Officer of the LIC claimed deduction on incentive bonus and additional conveyance allowance received by him. The return of the assessee was processed under section 143(1) of the Income Tax Act, 1961, thereby, benefit of deduction was taken by the assessee. Later, the Assessing Officer held that the assessee was to be governed by the head .....

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original assessment was not made under section j 43(3) of the Act." 4.05 Reference is also made to the decision of the Patna High Court In the case of Deepak Kumar Poddar and others Vs. Union of India and others, 224 ITR 95 (Patna). The Head note from that decision is reproduced below:- Reassessment-Notice-Proceedings pursuant to Notice under section 143(2) pending- Notice for reasseesment-Permissible- Explanation 2(b) to section 147 can apply to scrutiny cases- In co me- Tax Act, 1961 s. 1 .....

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. Rajesh Jhaveri, Stock Brokers (P) ltd, 291 ITR 500 (Se). The Head note from that decision is reproduced below:- Reassessment-Intimation-Provision for initiating reassessment applies only one of two conditions to be complied with-Only reason to believe that Income chargeable to tax has escaped Assessment- "Reason. to Believe" formation of belief within subjective satisfaction of Assessing Officer- Principle relating to "Change of Opinion" not applicable-Income-Tax Act, 1961, .....

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on the issue; the issue of notice u/s 148 'of the Act by the AO is held as per law and grounds' no. 1 & of appeal are as such dismissed. 6.3 We do not find any infirmity in the findings of Ld. CIT(A). Respectfully following the ratio laid down in the decisions above, we dismiss these grounds raised by assessee. 6.4 The issue raised under Ground No.4 to 8 argued before us is regarding taxability of a sum of ₹ 13,91,472/- received by the assessee in the year relevant to the asse .....

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me Court in Rama Bai VS CIT (1990) 181 ITR 400 (SC) has held that Interest on enhanced compensation awarded under the Land Acquisition Act accrues year after year and not on the date of granting enhanced compensation. In view of this articulation of law by the Hon'ble Apex court, there can be no question of charging the entire amount of interest to tax in the year of receipt as has been done by the authorities below. 6.5 It is further observed that the legislature in its wisdom has made cert .....

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Since these provisions have come into force w.e.f. 1.4.2010, the same cannot be applied retrospectively to the earlier years. We are dealing with the A.Y. 2004-05, which will, thus, be governed by the ratio of the judgment in the case of Rama Bai (supra). It is, therefore, held that the ld. CIT(A) was not justified in charging to tax the amount of interest received in the year, which obviously did not relate to the year in question. 6.6 There is one more connected issue, being the credit claime .....

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