TMI Blog2024 (4) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... views. In this view of the matter too, the Ld. PCIT cannot assume revisional jurisdiction held by the Hon ble Delhi High Court in CIT Vs. Hindustan Coca Cola Beveraces P Ltd. [ 2011 (1) TMI 138 - DELHI HIGH COURT] Revenue has not pointed any change into facts and circumstances of the present case. We therefore, respectfully following binding precedent (Supra), hereby allow the appeal of the assessee by quashing the impugned order of the Ld. PCIT - Assessee appeal allowed. - Shri Shamim Yahya, Accountant Member, And Shri Yogesh Kumar US, Judicial Member For the Appellant : Shri Lalit Mohan, CA For the Respondent : Shri Waseem Arshad, CIT(DR) ORDER PER SHAMIM YAHYA, AM : The Assessee has filed the Appeal against the Order of the Ld. Pr. CIT, Rohtak dated 27.3.2023 passed u/s. 263 of the Income Tax Act, 1961 (hereinafter referred as Act), relating to assessment year 2018-19 on the following grounds:- 1. That order dated 27.3.2023 u/s. 263 of the Act by Ld. PCIT, Rohtak has been made without satisfying the statutory pre conditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such. 2. That initiation of proceedings u/s. 263 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable. 2. Briefly stated, the assessee is an individual and filed his return of income at Rs. 4,65,420/- on 28.08.2009 wherein he claimed refund of the TDs amount of Rs. 11,24,214/- received as enhanced compensation after the compulsory acquisition of his agriculture land. In the return of income in Schedule EI, he has claimed interest income of Rs. 1,12,42,410/- as exempt. The case of the assessee was selected through CASS for verification of the following issues viz. Deductions from Income from other sources; reduction of income in revised return and claim of refund and refund claim. The AO completed the assessment u/s. 143(3) r.w.s. 143(3A) 143(3B) of the Act on 04.12.2020 on the returned income. 3. In exercise of power vested under him under section 263 of the Act the Ld. PCIT perused and examined the records and observed that the AO has completed the assessment without carrying out necessary enquiry which he had carried out in respect of tax treatment of interest received on compensation. He noted that as per the provisions of section 263, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . failed to conduct necessary enquiries, in this regard or to consider the judgement of the Jurisdictional High Court i.e. Hon'ble Punjab Haryana High Court dated 19.02.2020 in the case of Mahender Pal Narang vs Central Board of Direct Taxes, New Delhi wherein the Hon ble High Court has dealt with all the controversies arising from the Judgement of Hon'ble Supreme Court in the case of CIT vs. Ghanshyam HUF dated 16th July, 2009. The Hon ble High Court has categorically given its finding that the order of Hon ble Supreme Court in the case of Ghanshyam HUF, will not come to the rescue of the assessee after the amendments introduced through Finance (No. 2) Act, 2009 w.e.f. 1.4.2010. The said judgement of the Hon ble P H High Court has also been endorsed by the Hon ble Supreme Court of India dismissing the SLP against the judgment of Hon ble High Court in Mahender Pal Narang vs. CBDT (2021) 279 Taxman 74 (SC) vide its order dated 4.3.2021. 6. In view of the facts discussed above, it is clear that while passing the order u/s. 143(3) r.w.s. 143(3A) 143(B) dated 4.12.2020, the AO has completed the assessment on returned income only, which makes the said order erroneous and prejudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 of the Act without jurisdiction and thus, deserves to be quashed as such. He further submitted that initiation of proceedings u/s. 263 of the Act on the basis of unsigned show cause notice by Ld. PCIT, Rohtak is void ab initio therefore both initiation and consequent order u/s. 263 of the Act without jurisdiction and thus, deserves to be quashed as such. It was the further contention that Ld. PCIT has failed to appreciate that once the AO on examination of the fact on record and after making all possible enquiries had accepted claim of the appellant then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the Ld. CIT had a different opinion and that too, without having established in any manner that, view adopted by the Ld. AO was an impossible or unsustainable view. It was further submitted that the Ld. PCIT has failed to appreciate that action u/s. 263 of the Act is otherwise too inapplicable on the factual matrix of the facts of the instant case since it is not a case of lack of enquiry or lack of investigation and therefore the invocation u/s. 263 of the Act is not in accordance with law. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olidated reference Court dated 24.12.2013, in pursuance to reference u/s. 18 of the Land Acquisition Act, 1894 has assessed the market value of land @ Rs. 965 per square yard is placed at pages 59-204 of Paper Book. Note: It is submitted that interest u/s. 28 of the Land Acquisition Act, 1894 in pursuance to said reference order was also claimed and assessed as exempt u/s. 10(37) of the Act. Case No. 220-LA of 2008 (82) Case No. 254-LA of 2008 (95) iv) Order by Hon ble High Court, wherein market value of land is enhanced at Rs. 1485, per square yards qua the acquired land irrespective of the quality of land is placed at pages 205-2330 of Paper Book. 22.7.2015 22.7.2015 RFA No. 5635 of 2014 (205 read with 208) v) Order of assessment sought to be revised by Ld. PCIT .12.2020 4.12.2020 vi) Learned Assessing Officer, ITO, Ward-1, Fatehabad has submitted the proposal for initiation of proceedings u/s. 26 of the Act ld. Pr. CIT, Rohtak 6.10.2022 (251) 6.10.2022 (251) vii) First notice issued by PCIT to initiate proceedings u/s. 263 of the Act (unsigned) 16.1.2023 (250-251) 16.1.2023 (4-5) viii) Order passed by ld. PCIT, Rohtak 21.3.2023 28.3.202 ix) Decision of Hon ble Income Tax Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT vs. Ganpat Ram Bisnoi 296 ITR 292 (Raj.). An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous as held by the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. Vs. CIT 243 ITR 83 (SC). None of these elements exist in the case at hand. 11. Perusal of the order of the Ld. PCIT shows that he assumed the revisionary power under section 263 of the Act mainly on the ground that the Ld. AO failed to do the necessary inquiry about the taxability of the interest on enhanced compensation and passed the order not in accordance with the binding decision of Hon ble P H High Court in Mahender Pal Narang vs. CBDT (2021) 279 Taxman 74 (SC) against which SLP stands dismissed by the Hon'ble Supreme Court. This is not so. During assessment proceedings in response to notice under section 143(2) and 142(1) of the Act. with reference to specific query on receipt of interest under section 28 of Land Acquisition Act, the assessee explained that interest received under section 28 of the Land Acquisition Act has been held to be part of compensation by Apex Court in the case of CIT vs. Ghanshyam HUF reported as (2009) 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Rama Bai Vs. CIT (Supra) has held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. This has caused undue hardship to the taxpayers. With a view to mitigate the hardship section 145A has been substituted and clause (vii) in sub- section (2) of section 56 has been inserted by the Finance (No.2) Act, 2009 so as to provide that the interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A shall be assessed as income from other sources in the year in which it is received. It is thus evident that the amended provisions of section 56(viii) of the Act r.w. section 145A were brought on the statute to nullify the effect of Hon ble Supreme Court's ruling in the case of Ramna Bai and not Ghanshyam HUF. Moreover, the decision in Ghanshyam HUF was pronounced in July, 2016 and the Finance Bill proposing amendment to section 56 was laid in February 2016. So the intention of the legislature could never be the overruling of the ratio laid down in Ghanshyam HUF case. The issue in Rama Bai case involved the taxability in the year of receipt. The facts and questions for determination i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances. Accordingly. the opinion of the Ld. PCIT that the Ld. AO should have passed the assessment in accordance with the amended law and binding decision in Mahender Pal Narang's case (supra) overlooking the decision of Hon ble Supreme Court in Ghanshyam's HUF's case is not sustainable. Reliance by the Ld PCIT on the decision in Mahender Pal Narang's case is misplaced Needless to emphasis that in V.M. Salgaocar and Bros Pvt. Ltd. vs. CIT 243 ITR 383 (SC), the Hon 'ble Supreme Court has held that an order dismissing the SLP at the threshold without detailed reasons does not constitute any declaration of law or a binding precedent. Therefore, overemphasising the lact of dismissal of SLP in limine by the Hon'ble Supreme Court in Mahender Pal's case by the Revenue is not of any legal assistance to it. 16. Since the order of the Ld. AO is based on the decision of the Hon ble Supreme Court in Ghanshyam HUF (Supra) on the issue of taxability of interest received by the assessee under section 28 of Land Acquisition Act. it can at best be said to be a debatable issue on which two views are possible and the Ld. AO accepts one of the views. In this view of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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