The Commissioner Of Income Tax, Faridabad v. Sh. Bharat Lal Dagar (Huf

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITR No. 603 of 2009 (O&M)Date of decision: November 16, 2009 The Commissioner of Income Tax, Faridabad ...Appellant Versus Sh. Bharat Lal Dagar (HUF) ...Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE GURDEV SINGH Present: Ms. Urvashi Dhugga, Advocate, for the appellant. ORDER 1. This revenue has preferred this appeal under Section 260A ofIncome Tax Act, 1961 (for short, “the Act”) against the order of Income TaxAppellate Tribunal Delhi Bench 'H', New Delhi in ITA No. 1683/Del/2007dated 6.3.2009 for the assessment year 2002-03, proposing to raise thefollowing substantial question of law:- “(i) Whether, on the facts and in the circumstances of thecase, the ld. ITAT was right in law in holding that the issue oftaxability of compensation on agricultural land and interestthereon received by the assessee being a highly debatable issueon which two views are clearly possible and the claim of theassessee in adopting one possible view being bonafide one, nocase of penalty u/s 271 (1) (c ) of the Act could be made out,whereas the assessee has not offered for taxation the enhanced compensation and interest thereon in the year of its receipt inspite of the clear and unambiguous provisions contained inclause (b) of sub-section (5) of Section 45 and under Section 56of the Income Tax Act being inforce during the relevant time ?”2.The land of the assessee was acquired and compensation paid.But the said amount was not offered by the assessee as taxable income onthe ground of pendency of further proceedings. The CIT (A) upheld theplea of the assessee but the Tribunal held that the amount was taxable.Thereafter, the Assessing Officer levied penalty. The CIT (A) set aside thepenalty on the ground that requisite satisfaction has not been recordedwhich view was upheld by the Tribunal. This Court remanded the matter byholding that format of satisfaction was not conclusive if satisfaction hasbeen arrived and recorded in one form or the other and remanded the matterto the Tribunal. The Tribunal, after considering the merits, set aside thepenalty on the ground that issue was debatable and this court in CIT Vs.Sohan Lal (HUF)in ITA No. 582/2007 dated 5.2.2008 had taken the viewthat in such situation levying of penalty was not called for. 3.We have heard learned counsel for the appellant. 4.Learned counsel for the appellant submits that the matter hasnow been settled by the Hon'ble Supreme Court in Commissioner ofIncome-Tax v. Ghanshyam (HUF)(2009) 315 ITR 1 (SC), wherein theincome received on account of compensation was held liable to tax and inthis situation penalty should have been upheld. 5.The question is not of taxability but of not paying tax when theissue was debatable. The assessee had arguable case and earlier view was infavour of the assessee in CIT v. Karanbir Singh(2008) 303 ITR 231 (P&H), ITR No. 603 of 2009 which is based on the judgment of the Hon'ble Supreme Court in CIT v.Hindustan Housing and Land Development Trust Ltd.(1986) 161 ITR 524(SC), which has now been reversed in Ghanshyam (supra). 6.Since the view taken by the Tribunal is in consonance with theview taken by this Court in Sohan Pal (supra), no substantial question oflaw arises. 7.The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 16, 2009 prem (GURDEV SINGH ) JUDGE