Jai Parkash Vs PCIT (ITAT Delhi)
Interest received u/s 28 of land Acquisition Act, at best be said to be a debatable issue on which two views are possible; therefore PCIT cannot assume revisional jurisdiction u/s 263 of the Act.
In a recent case before the Income Tax Appellate Tribunal (ITAT) Delhi, Jai Parkash challenged the order of the Principal Commissioner of Income Tax (PCIT), Rohtak, dated 27th March 2023, passed under section 263 of the Income Tax Act, 1961 (the Act), pertaining to the assessment year 2018-19. The dispute centered on the tax treatment of interest received under section 28 of the Land Acquisition Act.
Jai Parkash contended that the interest received under section 28 of the Land Acquisition Act could, at best, be considered a debatable issue, with two possible views on its taxability. Consequently, the PCIT’s assumption of revisional jurisdiction under section 263 of the Act was challenged.
The crux of Jai Parkash’s argument rested on the principle that if the Assessing Officer (AO) accepts one of the plausible views regarding a tax issue, the order cannot be deemed erroneous merely because another view exists. He asserted that the PCIT’s intervention lacked statutory preconditions and was thus without jurisdiction.
Furthermore, Jai Parkash highlighted that the issue in question had already been adjudicated upon by the ITAT Delhi in a similar case involving Gulshan Kumar. The ITAT’s decision favored the assessee, holding that the AO’s acceptance of a particular view on the taxability of interest under section 28 of the Land Acquisition Act precluded the PCIT from assuming revisional jurisdiction.
In its ruling, the ITAT upheld Jai Parkash’s contentions, emphasizing that the matter was no longer res integra. Citing the precedent set in the case of Gulshan Kumar, the ITAT concluded that the PCIT’s exercise of revisional jurisdiction lacked merit. It reiterated that when the AO adopts one of the plausible views on a debatable tax issue, such an order cannot be deemed erroneous, thereby limiting the PCIT’s scope for intervention.
The ITAT’s decision underscores the importance of adherence to statutory preconditions before invoking revisional jurisdiction under section 263 of the Act. Moreover, it clarifies that where two plausible views exist on a tax issue, the AO’s acceptance of one view shields the assessment order from being deemed erroneous. This ruling provides clarity and guidance on the application of revisional jurisdiction in tax matters, ensuring procedural fairness and legal compliance.
FULL TEXT OF JUDGEMENT/ORDER OF ITAT DELHI
