PCIT cannot assume revisional jurisdiction on debatable issue of Tax on Interest u/s 28 of land Acquisition Act

Om Prakash Vs PCIT (ITAT Delhi)

The case of Om Prakash Vs PCIT (ITAT Delhi) revolves around the jurisdiction of the Principal Commissioner of Income Tax (PCIT) to revise orders related to tax on interest under Section 28 of the Land Acquisition Act. The appellant contested the PCIT’s revisional jurisdiction based on various grounds, leading to a detailed analysis by the Income Tax Appellate Tribunal (ITAT) Delhi.

The appellant challenged the PCIT’s order under Section 263 of the Income Tax Act, arguing that it was made without satisfying statutory preconditions and lacked jurisdiction. The grounds of appeal included objections to the initiation of proceedings, the unsigned show cause notice, and the alleged failure to consider previous assessments and inquiries.

The appellant’s counsel vehemently argued against the PCIT’s order, emphasizing that the taxability of interest on enhanced compensation is debatable and subject to different judicial interpretations. They contended that when two plausible views exist, the PCIT cannot intervene, citing legal precedents.

Contrary to the appellant’s arguments, the Departmental Representative presented written submissions, asserting the applicability of amended provisions and subsequent judicial interpretations. They highlighted the legislative changes introduced by the Finance Act, 2009, and emphasized the irrelevance of previous judgments like Ghanshyam HUF in light of these amendments.

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