VIJAY SHRINIVASRAO KULKARNI, Aurangabad V. Income Tax Officer, Ward1(1) Aurangabad, Aurangabad

ITA 1159/PUN/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 4640 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-03-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 05-11-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MISS ARRCHENA SHETTY
• Keywords: Capital receipt
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1159/PUN/2023 A.Y. 2019-20 Vijay Shrinivasrao Kulkarni B2/8, Building Kasliwal Classic, Phase I, Tapdiya Nagar, Aurangabad – 431005 PAN: APAPK8081Q .......अपीलाथ / Appellant बनाम / V/s. The Income Tax Officer, Ward 1(1), Aurangabad ...... यथ / Respondent Assessee by : Miss Arrchena Shetty Revenue by : None स ु नवाई क तार ख / Date of Hearing : 11-03-2024 घोषणा क तार ख / Date of Pronouncement : 12-03-2024 आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of National Faceless Appeal Centre (NFAC), Delhi, dated 08.09.2023 passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2019-20. 2. Briefly, the facts of the case are as under: The appellant is an individual deriving income under the head “salary”. The return of income for the assessment year 2019-20 was filed on 01.08.2019 declaring income of Rs.57,84,740/-. The appellant also claimed relief u/s 2 ITA No.1159/PUN/2023 Vijay Shrinivasrao Kulkarni 89(1) of the Income Tax Act, 1961 (in short ‘the Act’) in respect of compensation received for the termination of employment with M/s. Pfizer Healthcare India Private Limited. Against the said return of income, assessment was completed by the Assessing Officer (AO) vide order dated 29.09.2021 passed u/s 143(3) r.w.s. 144B of the Act denying the relief of Rs.13,22,187/- claimed u/s 89(1) of the Act by holding that the appellant had not received any arrears of salary or salary in advance. 3. Being aggrieved by the above assessment order, an appeal was filed before the CIT(A) seeking relief u/s 89(1), as well as, claiming that the receipt of compensation from M/s. Pfizer Healthcare India Private Limited towards termination of services was capital receipt and cannot be taxed within purview of provisions of section 17(3). The NFAC vide order dated 08.09.2023 has confirmed the action of the AO in denying the relief u/s 89(1) of the Act as the assessee had failed to comply with several hearing notices as mentioned in para 4 of the impugned order. 4. Being aggrieved with the order of NFAC, the appellant is in appeal before us in the present appeal. When the matter was called on, the learned counsel had prayed for remand of the matter to the NFAC, as NFAC had failed to deal with the matter on merits. 5. We have heard the learned counsel and perused the material on record. The issue in the present appeal relates to the eligibility of assessee for relief u/s 89(1) in respect of amount of compensation received for termination of services, as the employer had closed down the plant following the norms imposed by World Health Organization. The compensation in question comes within the provisions of section 17(3). No doubt, the provisions of section 89 provides for relief when the salary was received in advance or paid in arrears 3 ITA No.1159/PUN/2023 Vijay Shrinivasrao Kulkarni or compensation was received which comes within the purview of clause (3) of section 17 of the Act, but the proviso to section 89 of the Act clearly provides that no relief u/s 89 shall be granted in respect of amount received or receivable by the assessee on his voluntary retirement or termination of services in accordance with any scheme or scheme of voluntary retirement. The relevant provisions of section 89 are extracted as below: “89 —Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed:] Provided that no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i) of clause (10C) of section 10, a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under clause (10C) of section 10 in respect of such, or any other, assessment year.” The claim made by the assessee u/s 89 of the Act is clearly hit by proviso to section 89(1) of the Income Tax Act, the assessee is not entitled to relief u/s 89(1). As regards to the additional claim made by the assessee before the CIT(A) that the compensation in question should be treated as capital receipt, cannot be accepted as the compensation in question comes within the ambit of provisions of section 17(3)(iii) of the Act which clearly provides that the compensation received from the former employer for termination of his services is taxable as a profit in lieu of salary. The grounds of appeal filed by the appellant are devoid of any merit. Accordingly, the grounds of appeal filed by the assessee are dismissed. 4 ITA No.1159/PUN/2023 Vijay Shrinivasrao Kulkarni 6. The request of the learned counsel for remand of the matter to the file of CIT(A) had not been acceded to, in view of the fact that it becomes useless formality, it only contributes to the docket explosion of this Tribunal. Thus, the appeal filed by the assessee stands dismissed. 7. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on 12 th March, 2024. Sd/- Sd/- S.S. GODARA INTURI RAMA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER प ु णे / Pune; दनांक / Dated : 12 th March, 2024 GCVSR/Satish आदेश क त ल प अ े षत/Copy of the Order is forwarded to : 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. 4. The concerned Pr.CIT वभागीय #त#न$ध, आयकर अपील य अ$धकरण, प ु णे “B” / DR ‘B’, ITAT, Pune; 5. गाड) फाईल / Guard file. आदेशान ु सार / BY ORDER, //स या पत #त// True Copy// व,र-ठ #नजी स$चव / Sr. Private Secretary आयकर अपील य अ$धकरण, प ु णे / ITAT, Pune