ITR No. 603 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 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 GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present: Ms. Urvashi Dhugga, Advocate, for the appellant. ORDER 1. This revenue has preferred this appeal under Section 260A of Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal Delhi Bench 'H', New Delhi in ITA No. 1683/Del/2007 dated 6.3.2009 for the assessment year 2002-03, proposing to raise the following substantial question of law:- “(i) Whether, on the facts and in the circumstances of the case, the ld. ITAT was right in law in holding that the issue of taxability of compensation on agricultural land and interest thereon received by the assessee being a highly debatable issue on which two views are clearly possible and the claim of the assessee in adopting one possible view being bonafide one, no case of penalty u/s 271 (1) (c ) of the Act could be made out, whereas the assessee has not offered for taxation the enhanced ITR No. 603 of 2009 2 compensation and interest thereon in the year of its receipt in spite of the clear and unambiguous provisions contained in clause (b) of sub-section (5) of Section 45 and under Section 56 of 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 on the ground of pendency of further proceedings. The CIT (A) upheld the plea of the assessee but the Tribunal held that the amount was taxable. Thereafter, the Assessing Officer levied penalty. The CIT (A) set aside the penalty on the ground that requisite satisfaction has not been recorded which view was upheld by the Tribunal. This Court remanded the matter by holding that format of satisfaction was not conclusive if satisfaction has been arrived and recorded in one form or the other and remanded the matter to the Tribunal. The Tribunal, after considering the merits, set aside the penalty 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 view that 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 has now been settled by the Hon'ble Supreme Court in Commissioner of Income-Tax v. Ghanshyam (HUF) (2009) 315 ITR 1 (SC), wherein the income received on account of compensation was held liable to tax and in this situation penalty should have been upheld. 5. The question is not of taxability but of not paying tax when the issue was debatable. The assessee had arguable case and earlier view was in favour of the assessee in CIT v. Karanbir Singh (2008) 303 ITR 231 (P&H), ITR No. 603 of 2009 3 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 the view taken by this Court in Sohan Pal (supra), no substantial question of law arises. 7. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 16, 2009 (GURDEV SINGH ) prem JUDGE