Income Tax Appellate Tribunal - Chandigarh
Sh. Rameshwar Giri, Chandigarh vs Department Of Income Tax on 19 October, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIG ARH BENCH 'B', CHANDIG ARH
BEFO RE SHRI T. R. SOOD, A.M AND Ms. SUSHM A CHOWL A, JM
ITA No. 1344/Chd/2012
Assessment Year : 2008-09
I.T.O V Rameshwar Giri
Ward 3(4) Shop No. 1916
Chandigarh Manimajra
ACDPG 0604 M
(Appellant) (Respondent)
Appellant by Shri Manjit Singh
Respondent by: Shri Ajay Jain
Date of hearing 20.5.2013
Date of Pronouncement 11.6.2013
O R D E R
PER T.R.SOOD, A.M
This appeal is directed against the order passed by the ld. CIT(A), Chandigarh dated 19.10.2012.
2. In this appeal the Revenue has raised the following ground:
"The ld. CIT(A) is right in canceling the penalty imposed u/s 271(1)(c) by the Assessing Officer even when the assessee did not contested in appeal the additions/disallowance of exemption claimed u/s 10(37) on account of interest on enhanced compensation of compulsory acquisition on which penalty of concealment was imposed."
3. After hearing both the parties we find that during the assessment proceedings the Assessing Officer noticed from the TDS certificate that the assessee has received enhanced compensation of Rs. 45,63,027/- for acquisition of his agricultural land. The assessee had also received interest on 2 the said enhanced compensation at Rs. 21,62,124/-. The assessee had claimed exemption of the total amount u/s 10(37) of the Act. On enquiry it was submitted that the total amount was exempt u/s 10(37) of the Act. The Assessing Officer did not agree and subjected interest amount of Rs. 21,62,124/- to tax and penalty proceedings u/s 271(1)(c) of the Act were initiated. In response to the show cause notice for levy of penalty, it was stated that the assessee was illiterate and he had been under general impression that the total amount was exempt. This reply was not accepted and applying the decision of Hon'ble Supreme Court in case of K.P. Madhusudhanan V CIT (2001) 251 ITR 99 (S.C) levied penalty amounting to Rs. 6,41,330/- at the minimum rate of 100%.
4 On appeal before the ld. CIT(A), it was submitted that the issue involved was debatable at the time of filing of return and rather the same was in favour of the assessee in view of the decision of Hon'ble Jurisdictional High Court in case of CIT V. Karanbir Singh (2008) 303 ITR 231(PH). In any case the Hon'ble Supreme Court which reversed that decision has held that interest which is referable to Section 28 of "Land Acquisition Act" would form part of the compensation. It was also submitted that as far as penalty is concerned, the same is not leviable in view of the decision of Hon'ble Punjab & Haryana High Court in case of Bharat Lal Dagar (HUF) 335 ITR
345. The ld. CIT(A) after examining the submissions held that penalty is not leviable in view of the decision of Hon'ble Punjab & Haryana High Court in case of Bharat Lal Dagar (HUF) (supra).
35 Before us, the ld. DR for the revenue submitted that the assessee had not shown the income from interest in the return, therefore, Assessing Officer was not satisfied with the explanation of the assessee and accordingly penalty was levied.
6 On the other hand, the ld. counsel of the assessee reiterated the submissions made before the ld. CIT(A). He also pointed out that it cannot be said that the assessee has made concealment because TDS was duly reflected in the return of income and interest income was also reflected though claimed as exempt.
7 W e have heard the rival submissions carefully and find force in the submissions of the ld. counsel of the assessee. First of all where the interest received on late payment of compensation is taxable or not, was decided in favour of the assessee by Hon'ble Punjab & Haryana High Court in case of CIT V. Karanbir Singh (supra). This decision has been reversed by the Hon'ble Supreme Court by deciding the issue in case of CIT V. Ghanshuyam (HUF) 315 ITR 1. The return in this case has been filed on 30.9.2008, therefore, at the time of filing of return, the issue was covered in favour of the assessee because judgment in case of CIT V. Ghanshuyam (HUF) (supra) was rendered on 16.7.2009. Further the Hon'ble Supreme Court has held that some part of interest payment compensation would form part of compensation. The Assessing Officer has not bifurcated which part of the interest is u/s 28 of "land Acquisition Act" and which other part is taxable. 4 Therefore, at the time of filing of return the issue was really debatable. Since after the decision of Hon'ble Supreme Court the assessee has fairly accepted the addition by not filing the appeal. In any case in the similar circumstances penalty was held not to be leviable by the Hon'ble Punjab & Haryana High Court in case of CIT V. Bharat Lal Dagar (HUF) (supra) because the issue was debatable. Therefore, in these circumstances, we are of the opinion that the ld. CIT(A) has correctly deleted the penalty and accordingly we confirm his order.
8 In the result, appeal of the revenue is dismissed.
Order pronounced on 11.6.2013
Sd/- Sd/-
(SUSHMA CHOWLA) (T.R. SOOD)
JUDICI AL MEMBER ACCOUNTANT MEMBER
Dated : 11.6.2013
SURESH
Copy to: The Appellant/The Respondent/The CIT/The CIT(A)/The DR