TMI Blog2023 (4) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... reason for exercising power conferred u/s 263 by the ld CIT is that the return of income had to be filed without any paper i.e. it was paperless filing of return of income, even if the assessee had attached the document along with return and same will be taken off the record. Therefore, held that the AO has committed an error in exercising power u/s 154 - In our opinion the income tax proceeding are not adversarial it is not material as to who committed the mistake, the fact that a mistake has been committed and the same has to be rectified. Thus as the interest awarded under Land Acquisition Act is not taxable as held by the Hon'ble Supreme Court, the department cannot demand to pay the tax on the same by way of invoking section 263 therefore, we hold that the order of the ld CIT is erroneous. We quash the impugned order passed by the CIT u/s 263 and uphold the order passed by the ld AO u/s 154 of the Act. Appeal of the assessee is allowed. - I.T.A. No. 5074/DEL/2012 - - - Dated:- 23-3-2023 - Dr. B.R.R. Kumar, Accountant Member And Shri Yogesh Kumar Us, Judicial Member For the Assessee : Shri Satish Khosla, Adv.; And Shri Manu K. Giri, Advocate. For the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble High Court. Thereafter, the assessee filed her return of income for the year under consideration on 31.03.2009 showing interest of Rs. 2,41.16.305/- accrued on the said FDRs and also interest received on acquisition of land under the head Income from other sources . The Land Acquisition Collector deducted the tax at source from the interest which was deposited to the account of Central Govt. In the return of filed by the assessee the interest was shown as taxable income since the issue regarding taxability of interest of compensation was not settled as on the said date. The said return was processed u/s 143(1) of the Act. Subsequently, a decision of the Hon'ble Supreme in the case of CIT v. Ghanshyam Dass(HUF) reported in (2009) 315 ITR 1 (SC) came to be passed on 16.07.2009 wherein, it has been held that the interest awarded under the Land Acquisition Act is not taxable. The assessee filed application u/s 154 requesting that intimation u/s 143(1) of the Act may be amended by following the order of the Hon'ble Supreme Court in the case of Ghanshyam HUF (supra). The AO allowed the application filed by the assessee u/s 154 of the Act on 05.04.2011 by rectifying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome declared by the assessee Less: 2,40,60,270/- Interest awarded U/s 28 of the Land (-) 2,41,16,145/- Acquisition Act, as discussed Above Total Income (-) 55,875/- Plus Agri. Income at Rs.20,000/-, as declared by the assessee. 4. The ld CIT by exercising the powers conferred u/s 263 of the Act declaring that the order passed u/s 154 by the AO is null and void and set aside the same in following manners:- 15. On due consideration of the facts and circumstances of the case. I am of the considered view that the Assessing Officer has acted beyond his powers and the order u/s 154 of the Income Tax Act, 1961 dated 05.04.2011 for the assessment year 2008-09 15. therefore, held to be erroneous in so far as it is prejudicial to the interest of the revenue Needless to mention that had the said rectification orders not been made, there would not have arisen the (undue) refund and as a result, interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not prejudicial to the interest of the revenue. The right tax had to be collected from the right person. The reason for exercising power conferred u/s 263 by the ld CIT is that the return of income had to be filed without any paper i.e. it was paperless filing of return of income, even if the assessee had attached the document along with return and same will be taken off the record. Therefore, held that the ld AO has committed an error in exercising power u/s 154 of the Act. In our opinion the income tax proceeding are not adversarial it is not material as to who committed the mistake, the fact that a mistake has been committed and the same has to be rectified. The Rajkot Bench of Tribunal in the case of Rupam Impex in ITA No. 472/RJT/2014 for AY 2008-09 held as under:- A lot of emphasis is placed on the fact that the mistake was committed by the Assessee himself which has resulted in the error creeping in the assessment order as well. Instead of being apologetic about the complete non application of mind to the facts and making a mockery of the scrutiny assessment proceeding itself, the Assessing Officer has justified the mistake on record on the ground that it is attrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. It is clear from the order passed under section 154 of the Act that the AO has computed accumulation of 15% on the net revenue after reducing all the expenditures in the form of application of income for charitable purpose. This approach of the AO was clearly contrary to the decision of the Hon ble Supreme Court cited by the learned Counsel of the assessee. In these circumstances, we are of the view that the mistake sought to be rectified by the assessee ought to have been rectified by the Revenue authorities. Accordingly, we direct the AO to allow accumulation under section 11(1)(a) of the Act as claimed by the assessee in the application under section 154 of the Act. 10. In view of the above discussion and considering the fact that the interest awarded under Land Acquisition Act is not taxable as held by the Hon'ble Supreme Court, the department cannot demand to pay the tax on the same by way of invoking section 263 of the Act, therefore, we hold that the order of the ld CIT is erroneous. Accordingly, we quash the impugned order passed by the ld CIT u/s 263 and uphold the order passed by the ld AO u/s 154 of the Act. 11. In the result, the appeal of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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