Ishwar Dass Gupta, Haryana V. ITO, Hisar

ITA 1068/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3137 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 03-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 01-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Benefit of exemption; Reassessment proceedings
• Section: 147; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.1068/DEL/2016 ASSESSMENT YEAR : 2010-11 ISHWAR DASS GUPTA, C/O. MOHIT BHARTI, 119- SBI STREET, AGGARSAIN COLONY, SIRSA, HARYANA. VS. ITO, WARD- 2, HISAR. PAN : AAZPG9147M (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : MS. YAMINI, SR.DR DATE OF HEARING : 23-11-2017 DATE OF PRONOUNCEMENT : 13-12-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 23.12.2015 OF CIT(A), HISAR RELATING TO ASSESSMENT YEAR 2010-11. 2. THIS APPEAL WAS EARLIER DISMISSED BY THE TRIBUNA L FOR NON-APPEARANCE. SUBSEQUENTLY, THE TRIBUNAL VIDE MA NO.296/DEL/2016 ORDER DATED 03.10.2017 RECALLED ITS EARLIER ORDER. HENCE, THIS IS A RECAL LED MATTER. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. THEREFORE, THE APPEAL IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 25.03.2011 DECLARING TOTAL INCOME OF RS.3,58,419/-. 2 ITA NO.1068/DEL/2016 THE ASSESSEE WAS EMPLOYEE OF CHOUDHARY CHARAN SINGH HARYANA AGRICULTURAL UNIVERSITY (IN SHORT CCS, HAU) HISAR AND RETIRED F ROM SERVICE ON 31.08.2007 AND RECEIVED SALARY I.E. PENSION AND OTHER PENSIONA RY BENEFITS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE IN THE COMPUTATI ON OF TOTAL INCOME ANNEXED WITH THE RETURN OF INCOME FURNISHED DETAILS OF RECE IPT OF ARREARS OF GRATUITY AMOUNTING TO RS.6,45,480/- AND ARREARS OF LEAVE ENC ASHMENT AMOUNTING TO RS.91,606/- AND CLAIMED THE SAME AMOUNTS AS EXEMPT U/S 10(10) OF THE I.T. ACT. THE ASSESSEE ALSO FILED A DETAILED NOTE ON PAYMENTS OF GRATUITY, LEAVE ENCASHMENT AND LTC ETC. ON SUPERANNUATION. SINCE T HE ASSESSEE, ACCORDING TO THE ASSESSING OFFICER, HAD CLAIMED EXCESS GRATUITY AMOUNTING TO RS.2,95,480/- AND LEAVE ENCASHMENT AMOUNTING TO RS.91,606/- AS EX EMPT U/S 10(10)(I) OF THE I.T. ACT BY TREATING HIMSELF AS GOVERNMENT EMPLOYEE , THE ASSESSING OFFICER REOPENED THE ASSESSMENT U/S 147 AND ISSUED NOTICE U /S 148. AFTER CONSIDERING THE VARIOUS ARGUMENTS MADE BY THE ASSESSEE DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HELD THAT THE EM PLOYEES OF THE CCS, HAU, HISAR, CANNOT BE TERMED AS GOVERNMENT EMPLOYEES AS NEITHER THEY ARE UNDER THE CONTROL OF HARYANA GOVERNMENT NOR THEIR PAY IS DEBI TED TO THE CONSOLIDATED FUNDS OF THE STATE APPLICATION OF CSR, VOL. II DOES NOT CONFER VICE-VERSA STATUS AS GOVERNMENT EMPLOYEE UNDER ANY RULE/AUTHORITY AS CLAIMED BY THE ASSESSEE. HE, THEREFORE, HELD THAT THE UNIVERSITY EMPLOYEES A RE COVERED U/S 10(10)(III) OF THE I.T. ACT BECAUSE NEITHER SECTION 10(10)(II) APP LIES AS THEY ARE NOT RECEIVING 3 ITA NO.1068/DEL/2016 GRATUITY UNDER THE PAYMENT OF GRATUITY ACT, 1972 NO R FROM THE GRATUITY FUNDS MENTIONED U/S 10(10)(I) OF THE I.T. ACT. IN VIEW O F THESE FACTS, HE HELD THAT THE EXEMPTION ALLOWABLE TO THE ASSESSEE IN RESPECT OF G RATUITY AND LEAVE ENCASHMENT IS ONLY 3.5 LACS AND RS.3,00,000/- RESPECTIVELY WHI CH HAS ALREADY BEEN CLAIMED/ALLOWED. THUS, THE CLAIM OF THE ASSESSEE F OR EXEMPTION OF GRATUITY RECEIVED IN ARREAR OF RS.2,95,480/- AND ARREAR OF L EAVE ENCASHMENT OF RS.91,606/- BEING NOT IN ORDER WAS ADDED BACK TO TH E INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ACCORDINGLY MADE ADDITION OF RS.2,95,480/- ON ACCOUNT OF GRATUITY AND RS.91,606/- ON ACCOUNT OF LEAVE ENC ASHMENT. 5. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF T HE ASSESSING OFFICER. 6. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. ASSESSING OFFICER ERRED IN LAW IN INITIATING THE PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESSING OFFICER ERRED IN LAW AND FACTS IN DISALLOWING THE CLAIM OF THE APPELLANT IN RESPECT OF GRATUITY AND LEAVE ENCASHMENT U/S.10(10) OF THE INC OME TAX ACT TREATING THE APPELLANT AS NON GOVT. EMPLOYEE. THE LD. CIT (APPE AL) ALSO ERRED IN LAW IN UPHOLDING THE VIEW OF THE AO. 3. THAT THE LD. A.O./CIT (APPEAL) HAS ERRED BOTH I N FACTS AND LAW. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR ALTER, AMEND, MODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING. 7. I HAVE HEARD ARGUMENTS ADVANCED BY THE LD. DR AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND IDENTICAL ISSUE HAD CO ME UP BEFORE THE SMC-I BENCH OF NEW DELHI IN THE CASE OF BHUPENDRA KUMAR NEHRA V S. ITO VIDE ITA NO.1222/DEL/2016 ORDER DATED 20.07.2016 FOR ASSESSM ENT YEAR 2010-11. I FIND 4 ITA NO.1068/DEL/2016 THE TRIBUNAL IN THE SAID DECISION ALLOWED THE APPEA L OF THE ASSESSEE BY OBSERVING AS UNDER :- 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WAS AN EMPLOYEE OF CHAUDHARY CHARAN SINGH HARYANA AGRICULTURAL UNIVERS ITY, HISAR (HEREINAFTER CALLED CCSU) AND RETIRED FROM SERVICE BEFORE 24.05.2010. R ETURN FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS.97,940/- WAS FILED, WHICH WAS PROCESSED U/S 143( 1) OF THE ACT. THE AO INITIATED REASSESSMENT PROCEEDINGS ON THE PREMISE THAT THE AS SESSEE HAD WRONGLY CLAIMED EXEMPTION U/S 10(10) IN RESPECT OF THE ARREARS OF G RATUITY AND ARREARS OF LEAVE ENCASHMENT. HE OBSERVED THAT GRATUITY AND LEAVE ENC ASHMENT WERE EXEMPT UP TO THE LIMIT OF RS.3,50,000/- AND RS.3 LAC, RESPECTIVELY, IN THE CASE OF THE ASSESSEE, WHICH LIMIT STOOD EXHAUSTED IN THE EARLIER YEAR AT THE TI ME OF THEIR RECEIPT. HE FURTHER NOTICED THAT EXEMPTION LIMIT WAS ENHANCED TO RS.10 LAC FOR THE PERSONS RETIRING FROM SERVICE ON OR AFTER 24.5.2010. SINCE THE ASSESSEE RETIRED B EFORE THIS CUTOFF DATE, THE AO OPINED THAT THE EXTENDED BENEFIT OF EXEMPTION WAS NOT AVAI LABLE TO THE ASSESSEE. HE JETTISONED THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10(10) OF THE ACT AND HELD THAT THE CORRECT SECTIONS APPLICABLE WERE 10(10)(III) AND SECTION 10 (10AA)(II). SINCE THE ASSESSEE WAS AN EMPLOYEE OF CCSU, THE AO HELD THAT SUCH EMPLOYEE S COULD NOT BE TERMED AS GOVERNMENT EMPLOYEES AND, HENCE, THE BENEFIT U/S 10 (10)(I) WAS NOT AVAILABLE TO THE ASSESSEE. RESULTANTLY, HE MADE ADDITION TOWARDS THE AMOUNT OF ARREARS OF GRATUITY RECEIVED AT RS.6,50,000/- AND THE AMOUNT OF ARREARS OF LEAVE ENCASHMENT RECEIVED OF RS.1,89,180/-. THE LD. CIT(A) ECHOED THE VIEW TAKEN BY THE AO THAT THE ASSESSEE WAS NOT A `HOLDER OF CIVIL POST UNDER THE STATE GOVERNM ENT AND HENCE NOT ELIGIBLE FOR EXEMPTION U/S 10(10)(I). FURTHER, THE ASSESSEE WAS HELD TO BE NOT COVERED U/S 10(10)(II) AS HE DID NOT RECEIVE ANY GRATUITY UNDER THE PAYMENT OF GRATUITY ACT, 1972. THAT IS HOW, HE HELD THAT THE EMPLOYEES OF THE CCSU WERE COVERED U/S 10(10)(III) OF THE ACT, FOR WHICH THERE IS A LIMIT ON THE EXEMPT G RATUITY AMOUNT, WHICH STOOD EXHAUSTED BY THE ASSESSEE IN EARLIER YEAR. SINCE TH E ASSESSEE WAS EMPLOYED BEFORE 24.5.2010, THE NOTIFICATION ISSUED BY THE CBDT ENHA NCING THE LIMIT OF RS.10 LAC ON GRATUITY U/S 10(10)(III) WAS HELD TO BE NOT APPLICA BLE. THE ASSESSEE IS AGGRIEVED AGAINST THE CONFIRMATION OF DENIAL OF EXEMPTION MAD E BY THE LD. CIT(A). 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE DELHI BENCH OF THE TRIBUNAL IN SHRI RAM KANWAR RANA VS. ITO, WARD-3, HISAR IN ITA NO.1307/DEL/2016 HAS ALLOWED EXEMPTION IN RESPECT OF THE ARREARS OF GRATUITY AND ARREARS OF LEAVE ENCASH MENT AND DISMISSED THE GROUNDS ABOUT THE INITIATION OF RE-ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF RAGHUBIR SINGH PANGHAL VS. ITO IN ITA NO.1308/DEL/2 016. FOLLOWING THE SAME, I EXTEND THE BENEFIT OF EXEMPTION TO THE INSTANT ASSE SSEE ALSO IN RESPECT OF ARREARS OF GRATUITY AND ARREARS OF LEAVE ENCASHMENT U/S 10(10) (I) AND 10(10AA)(I). OTHER GROUNDS INCLUDING THE INITIATION OF REASSESSMENT PR OCEEDINGS WERE NOT PRESSED BY THE LD. AR. THE SAME, THEREFORE, STAND DISMISSED AS NOT PRESSED. 8. SINCE THE FACTS OF THE INSTANT APPEAL ARE IDENTI CAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF BHUPENDRA KU MAR NEHRA (SUPRA), 5 ITA NO.1068/DEL/2016 THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL I HOLD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF EXEMPTION U/ S 10(10) IN RESPECT OF THE GRATUITY AND LEAVE ENCASHMENT. THE ORDER OF THE CI T(A) IS SET-ASIDE ON THIS ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE ON THI S ISSUE ARE ACCORDINGLY ALLOWED. SINCE THE ASSESSEE SUCCEEDS ON MERIT, THE LEGAL GROUND CHALLENGING THE VALIDITY OF RE-ASSESSMENT PROCEEDINGS IS NOT BEING ADJUDICATED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF DECEMBER, 2017. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 13-12-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI