2021 (8) TMI 1305 - AT - Income Tax

Rectification of mistake u/s 254 - Taxability of the interest received on compensation under the Land Acquisition Act - AO brought to tax the interest received on compensation placing reliance on the provisions of section 145A r.w.s. 56(2)(viii) - HELD THAT - As on mere reading of the order of Tribunal we find that the Tribunal relying upon the decision of the Hon ble Supreme Court in the case of (i) Ghanshyam (HUF) 2009 (7) TMI 12 - SUPREME COURT and (ii) Bikram Singh Ors. 1996 (9) TMI 6 - SUPREME COURT had deleted the additions without adverting to the provisions of section 145A r.w.s. 56(2)(viii) of the Act. In our considered opinion non-consideration of the particular provisions of the Act especially when the lower authorities had placed reliance for the purpose of making the addition is a mistake apparent from the record which is capable of being rectified u/s 254(2) of the Act. Thus the appeal is recalled for a limited purpose of deciding as to the applicability or otherwise of provisions of section 145A r.w.s. 56(2)(viii) of the Act. Accordingly the Registry is directed to fix the appeal in due course of hearing.

Summary

Issues:
Taxability of interest received on compensation under the Land Acquisition Act under sections 145A and 56(2)(viii) of the Income Tax Act, 1961.

Analysis:
The Appellate Tribunal received a Miscellaneous Petition from the Revenue seeking the recall of an order dated 01.07.2019 related to the assessment year 2013-14. Despite due notice, the assessee did not appear for the hearing, leading to the disposal of the Miscellaneous Application after hearing the ld. CIT-DR. The issue in question pertains to the taxability of interest received on compensation under the Land Acquisition Act, with reference to sections 145A and 56(2)(viii) of the Income Tax Act. The Tribunal had previously allowed the appeal filed by the assessee based on certain court decisions without considering the applicability of the aforementioned provisions of the Act.

Upon hearing the ld. CIT-DR and examining the material on record, it was evident that the Assessing Officer and the ld. CIT(A) had relied on sections 145A and 56(2)(viii) of the Act to tax the interest received on compensation. However, the Tribunal had deleted the additions without taking into account these provisions. The Tribunal acknowledged the mistake of not considering the specific provisions of the Act, which the lower authorities had relied upon for making the addition. Therefore, the Tribunal decided to recall the appeal for the limited purpose of determining the applicability of sections 145A and 56(2)(viii) of the Act. The appeal was directed to be fixed for further hearing.

Conclusively, the Miscellaneous Application filed by the assessee was allowed, and the order was pronounced on August 20, 2021.