Madan Mohan Sharma, Patiala V. ITO, Patiala

ITA 1165/CHANDI/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9901 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bonafide belief; Benefit of exemption; Condonation of delay; Reassessment proceedings
• Section: 143(3); 10(10AA)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 1165/CHD/2012 (ASSESSMENT YEAR: 2007-08) MADAN MOHAN SHARMA, VS. THE INCOME TAX OFFICER, HOUSE NO.173/2, WARD 6, JODIAN BHATTIAN, PATIALA. PATIALA. PAN NO. ALVPS5081R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.R.SHARMA RESPONDENT BY : SHRI R.K.GUPTA, DR DATE OF HEARING : 15.06.2015 DATE OF PRONOUNCEMENT : 17.06.2015 O R D E R PER H.L.KARWA, VP : THIS APPEAL FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PATIALA DATED 14.9.2012 RELATING TO ASSE SSMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWI NG GROUNDS : 2 1. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHE LD BY THE COMMISSIONER OF INCOME TAX (APPEALS) PATIALA IS BAD I N LAW AND IS BEYOND ALL THE CANNONS OF LAW AND JUSTICE. 2. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) PATIALA DISMISSING THE APPEAL FILED BY THE APPELLANT ON THE GROUND OF THE SAME BEING LATE AND BY NOT CONDONIN G THE DELAY IS BAD IN LAW AND NEEDS TO BE SET-ASIDE INSPITE OF THE FACT THAT THE APPELLANT WAS LIKELY TO SUCCEED IN APPEAL.. 3. THAT THE ORDERS OF THE ASSESSING OFFICER AS UPHE LD BY THE COMMISSIONER OF INCOME TAX (APPEALS) PATIALA DISALLOW ING THE CLAIM OF THE APPELLANT AT RS.5,00,000/- U/S 10(10C) OF THE INCOME TAX ACT IS BAD IN LAW AND NEEDS TO BE SET AS IDE. 4 . THAT THE ORDER OF THE ASSESSING OFFICER AS UPHE LD BY THE COMMISSIONER OF INCOME TAX (APPEALS) PATIALA DISALL OWING RS.24295/- OUT OF THE LEAVE ENCASHMENT RECEIVED BY THE APPELLA NT U/S 10(10AA) OF THE INCOME TAX ACT 1961 MORE SO WHEN THE SAME HAS B EEN CALCULATED AND ALLOWED BY THE EMPLOYER OF THE APPELLANT WHILE DEDUCTING TAX AT SOURCE IS BAD IN LAW AND NEEDS TO BE SET -ASIDE. 5. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHEL D BY THE COMMISSIONER OF INCOME TAX (APPEALS) PATIALA INITIATING REASSESSMENT PROCEEDINGS IS BAD IN LAW AND NEEDS TO BE SET ASIDE. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, AND D ELETE ANY OF THE GROUNDS BEFORE THE APPEAL DECIDED. 3. GROUND NO.1 OF THE APPEAL IS GENERAL IN NATURE AND HENCE, NO COMMENTS ARE BEING GIVEN. 4. AS REGARDS TO GROUND NO.2 OF THE APPEAL, THE BR IEF FACTS ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING TAXABLE INCOME OF RS.2,23,430/-. IN THE RETURN OF INCOME, THE ASSES SEE HAD CLAIMED RS.5 LACS AS EXEMPT UNDER SECTION 10(10C) O F THE 3 INCOME TAX ACT, 1961 (IN SHORT THE ACT) OUT OF TO TAL AMOUNT OF RS.6,86,346/- BEING THE AMOUNT OF EX-GRATIA RECE IVED BY HIM FROM HIS THE THEN EMPLOYER, STATE BANK OF PATIA LA AT THE TIME OF HIS RETIREMENT UNDER THE SCHEME KNOWN AS EX IT OPTION SCHEME FLOATED BY THE STATE BANK OF PATIALA. THE ASSESSEE HAD ALSO RECEIVED GRATUITY AND LEAVE ENCASHMENT, WH ICH AMOUNT WAS ALSO CLAIMED BY THE ASSESSEE AS DEDUCTIO N UNDER SECTIONS 10(10C) AND 10(10AA) OF THE INCOME TAX ACT , 1961. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF TH E ASSESSEE FOR THE REASONS STATED IN THE ASSESSMENT ORDER DATE D 13.12.2010 PASSED UNDER SECTION 143(3) R.W.S. 147 O F THE ACT. 5. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT (APPEALS) AND THE LEARNED CIT (APPEALS) VIDE HIS OR DER DATED 14.9.2012 DISMISSED THE APPEAL OF THE ASSESSEE MAIN LY ON THE GROUND THAT THERE WAS A DELAY OF ABOUT 11 MONTHS IN FILING THE APPEAL. THE LEARNED CIT (APPEALS) REFUSED TO COND ONE THE DELAY OF ABOUT 11 MONTHS IN FILING THE APPEAL. HO WEVER, THE LEARNED CIT (APPEALS) HAS NOT GIVEN ANY FINDINGS ON THE MERITS OF THE CASE AND HENCE, THE ASSESSEE IS IN APPEAL BE FORE THE TRIBUNAL. 6. I HAVE HEARD SHRI M.R. SHARMA, LEARNED COUNSEL FOR ASSESSEE AND SHRI R.K.GUPTA, LEARNED D.R FOR THE RE VENUE AT LENGTH AND ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS APPARENT FROM THE RECORDS THAT THE ASSESSMENT OR DER IN THIS CASE WAS PASSED BY THE ASSESSING OFFICER ON 13.12.2 010 AND THE RELEVANT NOTICE OF DEMAND AND THE ASSESSMENT ORDER WAS 4 SERVED ON THE ASSESSEE ON 28.12.2010. HOWEVER, THE ASSESSEE FILED THE APPEAL BEFORE THE LEARNED CIT (APPEALS) O N 21.12.2011. THUS, THERE IS DELAY OF ABOUT 11 MONT HS IN FILING THE APPEAL BEFORE THE LEARNED CIT (APPEALS). IT IS OBSERVED THAT ALONGWITH MEMO OF APPEAL, THE ASSESSEE SUBMITT ED AN APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL DULY SUPPORTED BY AN AFFIDAVIT. THE REASON FOR THE DEL AY GIVEN BY THE ASSESSEE WAS THAT HE COULD NOT FILE AN APPEAL A GAINST THE ORDER OF ASSESSMENT FOR THE REASONS BEYOND HIS CONT ROL. THE ASSESSEE WAS ADVISED NOT TO FILE ANY APPEAL DUE TO THE REASONS THAT IN CASE THE APPEAL IS PREFERRED THE PROVISIONS WITH REGARD TO THE PENALTY WOULD BE ATTRACTED. HOWEVER, THE A SSESSEE ON 15.12.2011 CAME TO KNOW THAT HIS OTHER COLLEAGUES H AVE FILED APPEALS BEFORE THE INCOME TAX APPELLATE AUTHORITIES AND MOST OF THEM HAD SUCCEEDED IN SUCH APPEALS. THE ASSESSEE HAD ALSO RECEIVED A LETTER FROM THE ASSOCIATION OF WHICH HE IS A MEMBER, WHO INFORMED HIM THAT HE WILL BE ENTITLED TO THE RE FUND AS A RESULT OF THE APPEAL FILED. THEREAFTER, THE ASSES SEE SOUGHT LEGAL ADVICE AND AS SUCH, AN APPEAL WAS FILED BEFORE THE LEARNED CIT (APPEALS). IT WAS ALSO CLAIMED BY THE ASSESSEE BE FORE THE LEARNED CIT (APPEALS) THAT THE ISSUE APPEALED AGAIN ST WAS COVERED IN HIS FAVOUR AS PER THE DECISION OF THE I. T.A.T., DIVISION BENCH, CHANDIGARH IN ITA NO.925/CHD/2011 VIDE ORDER DATED 1.11.2011 IN THE CASE OF SHRI BIKRAM JIT PASSI VS . DCIT, AMBALA CANTT RELATING TO ASSESSMENT YEAR 2008-09. SHRI BIKRAM JIT PASSI WAS AN EMPLOYEE OF THE STATE BANK OF INDIA, A SIMILARLY SITUATED AND HAD SOUGHT RETIREMENT UNDER THE SAID SCHEME. HOWEVER, THE LEARNED CIT (APPEALS) HELD T HAT THE 5 REASONS SUBMITTED BY THE ASSESSEE ARE VERY GENERAL IN NATURE. HE, THEREFORE, HELD THAT THERE WAS NO SUFFICIENT RE ASON FOR CONDONING THE DELAY IN FILING THE APPEAL. THE LEA RNED CIT (APPEALS) DID NOT CONSIDER AND DECIDE THE MERITS OF THE CASE. AT THE STAGE, IT WILL WORTHWHILE TO REFER THE DECIS ION OF THE I.T.A.T., LUCKNOW BENCH A, LUCKNOW DATED 24.8.200 7 IN THE CASE OF SHRI ARUN ROHTAGI & OTHERS VS. ITO 4(1), K ANPUR & OTHERS IN ITA NO.1275/LUC/2006 TO 1279/LUC/2006 REL ATING TO ASSESSMENT YEAR 2004-05 WHEREIN THERE WAS SUBSTA NTIAL DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. TH E TRIBUNAL FOLLOWED ITS EARLIER ORDER IN THE CASE OF SHRI CHA RAN SINGH VS. ITO-1(1), LUCKNOW IN ITA NO.461/LUC/2007 & OTHE RS RELATING TO ASSESSMENT YEAR 2004-05, WHEREIN THE TR IBUNAL HELD AS UNDER: '3. I.T.A. NOS. 461, 462, 463, 464 AND 469 ARE FILED LAT E, BY 324, 325, 325, 324 AND 329 DAYS RESPECTIVELY. AN-APPLICATION FOR CONDONATION OF DELAY HAS BEEN FILED. THE MASON GIVEN B Y THEM IS THAT THEY WERE ADVISED BY THEIR CONSULTANTS NOT TO FILE APPEAL AGAINST THE ORDER OF CIT(A) WHO IS HIGHEST AUTHORITY 'IN THE DEPARTMENT. THE EMPLOYEES WERE CONSTANTLY IN SEARCH O F THE EXACT LEGAL POSITION REGARDING THE TAXABILITY OF THE RETIREM ENT BENEFIT. IT WAS A/SO EXPLAINED TO THEM THAT TDS WAS DEDUCTED AT SOURCE BY RBI ON THESE PAYMENTS AND THEREFORE EMPLOYEES WERE U NDER THE BONAFIDE BELIEF THAT THE RETIREMENT BENEFITS ARE TA XABLE UNDER L.T. ACT, 1961. HOWEVER ON 28/3/2007, BOMBAY TRIBUNAL HAD IN 222 APPEALS OF THE RBI EMPLOYEES HELD THAT THEY ARE ENTITL ED TO BENEFIT U/S 10(1 OC) AND ALSO U/S 89(1). FOLLOWING THAT DECISION, THE EMPLOYEES HAVE FILED THE APPEAL. THE DELAY IS THEREFOR E ATTRIBUTABLE TO THE INCORRECT LEGAL ADVICE. APPEAL IS FILED AFTER KNO WING AN ORDER OF THE BOMBAY TRIBUNAL IN FAVOUR OF THE EMPLOYEES. ON THIS BASIS, THESE EMPLOYEES HAVE PRAYED FOR CONDONATION OF DELAY. 6 4. ON THIS ISSUE WE HAVE HEARD LEARNED D. R. WHO H AS' SUBMITTED THAT THE REASON SO ADVANCED COULD NOT BE S AID TO BE SATISFACTORY. AN ASSESSEE, WHO IS NOT VIGILANT ABOUT HIS RIGHT, COULD NOT BE HELPED BY THE MACHINERY PROVIDED IN TH E STATUTE. ON THE OTHER HAND LEARNED AUTHORISED REPRESENTATIVE FO R THE ASSESSES SUBMITTED THAT IN THE INTEREST OF JUSTICE, DELAY IN FILING APPEAL SHOULD BE CONDONED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION. IN OUR VIEW, DELAY IN FILING APPEAL BY THE ABOVE EMPLOYEES NEEDED TO BE C ONDONED IN THE INTEREST OF IMPARTING SUBSTANTIAL JUSTICE. HON' BLE MADRAS HIGH COURT IN VENKATADRI TRADERS LIMITED VS CIT (2001) 2 48 ITR 681 HELD THAT WHILE CONSIDERING THE QUESTION OF CONDONATION OF DELAY IN FILING AN APPLICATION (FOR REVISION IN THAT CASE) THE REVIS IONAL AUTHORITY IS NOT ALL TOGETHER EXCLUDE FROM CONSIDERATION THE MERITS OF THE REVISION PETITION. IF THE CASE OF JUSTICE REQUIRES THAT A LIBERAL VIEW BE TAKEN THEN A LIBERAL VIEW WOULD INDEED BE WARRANTED. IT I S NOT THE POLICY OF THE ACT TO ENABLE THE STATE TO COLLECT MONEY, FROM CITIZEN AND RETAIN THE SAME EVEN WHEN THE MONEY 1$ NOT REQUIRED TO BE PAID AS TAX. - THE FACT THAT THE PAYMENT HAS BEEN MADE ERRONEOUSLY CANNOT BY ITSELF BE ALLOWED TO STAND IN THE WAY OF THE RELIEF BEING GRANTED TO THE ASSESSES. IF RELIEF IS PERMISSIBLE BY EXERCISE OF A DISCRETIONA RY POWER VESTED IN THE STATUTORY AUTHORITY THEN THESE AUTHORI TIES ARE REQUIRED TO EXERCISE SUCH DISCRETIONARY POWER IN A MANNER WHICH WOULD PROTECT AND PROMOTE THE INTEREST OF THE ASSESSEE. IN VOLTAS LIMITED VS. DCIT (2000) 241 ITR 471, IT WAS HELD BY HON'BLE A.P. HIG H COURT THAT A PARTY SHOULD NOT SUFFER FOR THE LAPS ON THE PART OF THE COUNSEL AND OPPORTUNITY SHOULD BE GIVEN TO THE PARTIES TO H AVE A DECISION ON MERITS. HON'BLE DELHI HIGH COURT IN PRAMOD BANSAL AND SONS VS. INCOME TAX OFFICER (1999) 237 ITR 65 HELD THAT WHER E THERE IS AN ADVERSE DECISION OF A HIGH COURT THEN IT IS FUTILE TO FILE AN APPEAL BUT WHERE THAT DECISION OF HIGH COURT IS REVERSED BY HO N'BLE SUPREME COURT, THEN THE DELAY OCCURRED IN FILING THE APPEAL ON THE BASIS OF SUPREME COURT DECISION SHOULD BE CONDONED 6. IN THE PRESENT CASE, THE EMPLOYEES DID NOT FILE APP EALS TO THE TRIBUNAL ON THE GROUND THAT RBI HAD DEDUCTED TAX AN D THEIR COUNSEL 7 HAD ADVISED AGAINST FILING APPEAL TO THE TRIBUNAL. BUT AFTER RECEIPT OF THE ORDER OF THE TRIBUNAL (BOMBAY BENCH) IN FAVO UR OF THE ASSESSES, THE APPEAL HAVE BEEN FILED AND THERE IS NO D ELAY THEREAFTER. IN VIEW OF THIS AND IN ORDER TO IMPART JUSTICE TO THESE EMPLOYEES, WE DO NOT FIND HESITATION IN CONDONING TH E DELAY AND ADMIT THE APPEALS. THEIR EXPLANATION IS SATISFACTORY AND IS ACCEPTED. 7. AS A RESULT, THE APPEALS ARE ADMITTED FOR DECISION ON MERITS. 7. IN THE ABOVE CASE, THE EMPLOYEES DID NOT FILE A PPEALS BEFORE THE TRIBUNAL ON THE GROUND THAT THE RBI HAD DEDUCTED TAX AND THEIR COUNSEL HAD ADVISED AGAINST FILING OF THE APPEALS. BUT AFTER RECEIPT OF THE ORDER OF THE I.T .A.T. (BOMBAY BENCH) IN FAVOUR OF THE ASSESSES, THE APPEALS WERE FILED AND THERE WAS NO DELAY THEREAFTER. IN SUCH CIRCUMSTANCE S, THE TRIBUNAL HELD THAT IN ORDER TO IMPART JUSTICE TO TH E EMPLOYEES/ASSESSES THE DELAY DESERVES TO BE CONDONE D. ACCORDINGLY, THE TRIBUNAL CONDONED THE DELAY IN FIL ING THE APPEALS. IN THE INSTANT CASE ALSO, THE ASSESSEE WA S ADVISED NOT TO FILE APPEAL BEFORE THE LEARNED CIT (APPEALS) . HOWEVER, THE ASSESSEE CAME TO KNOW ABOUT THE DECISION OF THE I.T.A.T., DIVISION BENCH, CHANDIGARH IN THE CASE OF SHRI BIK RAM JIT PASSI (SUPRA) AND THEREAFTER IMMEDIATELY THE ASSESS EE PREFERRED THE APPEAL BEFORE THE LEARNED CIT (APPEAL S). THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE CASE OF SHRI ARUN ROHTAGI & OTHERS (SUPRA). RESPECTFULLY FOLLOWING THE ORDER OF THE I.T.A.T., LUCKNOW BENCH IN THE CAS E OF SHRI ARUN ROHTAGI & OTHERS (SUPRA) I HOLD THAT THE LEARN ED CIT (APPEALS) SHOULD HAVE CONDONED THE DELAY IN FILING THE APPEAL. 8 ACCORDINGLY, I CONDONE THE DELAY IN FILING THE APPE AL AND ADMIT THE APPEAL FOR DECISION ON MERITS. 8. AS FAR AS THE MERITS OF THE CASE ARE CONCERNED, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE I.T.A.T. , DIVISION BENCH, CHANDIGARH IN THE CASE OF SHRI BIKRAM JIT PASSI VS. DCIT, AMBALA CANTT IN ITA NO.925/CHD/2011 RELATING TO ASSESSMENT YEAR 2008-09. WHILE DECIDING A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE THE TRIBUNAL HELD AS UNDER : 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED AND CONSIDERED THE FACTS OF THE APPEAL. THE LD. 'A R' PLACED RELIANCE, ON THE DECISION, IN THE CASE OF PANDYA VI NOD CHANDRA BHOGILAE V ITO (2010) 045 DTR 105 ITAT, AHMEDABAD, TO STATE THAT THE FACT-SITUATION OF THE PRESENT APPEAL IS SQ UARELY COVERED BY THE DECISION. HAVING CONSIDERED THE DECISION, W E FOUND THAT THE SAME IS APPLICABLE TO THE FACTS OF THE PRESENT CASES. THE RELEVANT AND OPERATIVE PART OF THE DECISION IS REPR ODUCED HEREUNDER : 2. THUS THE ONLY ISSUE INVOLVED IN THIS APPEAL IS ABOUT ALLOWABILITY OF EXEMPTION UNDER SECTION 10(10C) OF THE INCOME TAX ACT, 1961. 3. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A DEP UTY MANAGER IN SBI AND HAS TAKEN VRS ON 31-5-2006 UNDER EXIT OPTION SCHEME INTRODUCED BY THE BANK OF INDIA WITH EFFECT FROM 7-5-2005. THE ASSESSEE RECEIVED SALARY AND PENSION AMOUNTING TO RS.3,81,894 (INCLUDING EXGRATIA). ON EXAMINATION OF FORM NO.16 THE ASSESSING OFFICER NOTICED THAT ASSESSEE RECEIVED EXGRATIA OF RS.3,07,236 ON VRS. HE CLAIMED EXEMPTION UNDER SECTION 10(10C) OF THE ACT. THE ASSESSING OFFICER DISALLOWED THE CLAIM BY 9 FOLLOWING CIRCULAR NO. CHIEF CIT, BARODA LETTER BRD/CHIEF CIT/TECH/MICS/10(10C)/2009-10, DATED 17-6-2006. THE ASSESSEE RELIED ON THE DECISION OF TRIBUNAL, KOLKATA IN THE CASE OF DY.CIT V. KRISHNA GOPAL SAHA (2009) 29 DTR (KOL)(TM)(TRIB) 385 BUT THE LEARNED ASSESSING OFFICER DID NOT AGREE AND MADE THE ADDITION. THE LEARNED COMMISSIONER (APPEALS) ALSO CONFIRMED THE DISALLOWANCE BY TRYING TO DISTINGUISH THE DECISION OF THIRD MEMBER IN DY.CIT V. KRISHNA GOPAL SAHAS CASE (SUPRA). 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL ON RECORD. IN OUR CONSIDERED VIEW THE DISTINCTION CITED BY THE LEARNED COMMISSIONER (APPEALS) IS NOT SOUND AND DOES NOT STAND TO REASON. THE ONLY BASIS FOR NOT ALLOWING THE CLAIM HAS BEEN THAT SCHEME FOR VRS IS NOT IN ACCORDANCE WITH RULE 2BA. HOWEVER,, IT HAS NOT BEEN POINTED OUT HOW THE EMPLOYER HAS NOT FRAMED THE SCHEME IN ACCORDANCE WITH RULE 2BA. EARLIER TILL 2002 SCHEMES WERE REQUIRED TO BE APPROVED BY THE CHIEF COMMISSIONER BUT THEREAFTER SUCH REQUIREMENT HAS BEEN DISPENSED WITH AND, THEREFORE, IT IS ONLY FOR THE EMPLOYER TO FRAME THE SCHEME FOR VRS OR FOR EARLIER EXIT OPTION. IF ASSESSING OFFICER HAD ANY DOUBT ABOUT THE SCHEME HE COULD HAVE ENQUIRED FROM THE EMPLOYER. SO FAR A S THE ASSESSEE EMPLOYEE IS CONCERNED, HE CANNOT BE PENALIZED AND TAX WILL BE LEVIED ON HIM ON THE ASSUMPTION THAT THE SCHEME FRAMED BY EMPLOYER IS NOT IN ACCORDANCE WITH RULE 2BA. IN ANY CASE, THE JUDGMENT OF THIRD MEMBER IN DY.CIT V. KRISHNA GOPAL SAHA (SUPRA) IS CLEARLY APPLICABLE AND WE DO NOT FIND ANY REASON TO TAKE A DIFFERENT VIEW. FOR THE SAKE OF CONVENIENCE WE REFER TO FOLLOWING PARA FROM THE THIRD MEMBER JUDGMENT IN DY.CIT V. KRISHNA GOPAL SAHAS CASE (SUPRA) AS UNDER : 10 5. AT THE TIME OF HEARING BEFORE ME, NONE APPEARED ON BEHALF OF THE ASSESSEE-RESPONDENT. I HAVE, THEREFORE, HEARD THE LEARNED DEPARTMENT REPRESENTATIVE AND PERUSED THE MATERIAL PLACED BEFORE ME. I FIND THAT THE ISSUE HAS BEEN CONSIDER ED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF SAIL DSP VR EMPLOYEES ASSOCIATION 1998 V. UNION OF INDIA (SUPRA) IN WHICH THEIR LORDSHIPS HEL D AS UNDER : SECTION 10(10C) OF THE INCOME TAX ACT, 1961, USES THE EXPRESSION ANY AMOUNT RECEIVED BY AN EMPLOYEE. AT THE TIME OF HIS VOLUNTARY RETIREMENT IN ACCORDANCE WITH ANY SCHEME OR SCHEMES OF VOLUNTARY RETIREMENT. IF A PLAIN LITERAL INTERPRETATION OF STATUTORY PROVISION PRODUCED A MANIFESTLY ABSURD AND UNJUST RESULT, WHICH THE LEGISLATURE COULD NOT HAVE INTENDED, THE COURT IS SUPPOSED TO MODIFY THE LANGUAGE USED BY THE LEGISLATURE EVEN TO DO SOME VIOLENCE TO IT SO AS TO ACHIEVE THE OBVIOUS INTENTION OF THE LEGISLATURE AN D PRODUCE A RATIONAL CONSTRUCTION. AN EXPRESSION USE D IN THE STATUTE IS NOT ALWAYS TO BE INTERPRETED LITERALLY OR GRAMMATICALLY. SOMETIMES IT HAS TO BE INTERPRETED HAVING REGARD TO THE CONTEXT IN WHICH T HE EXPRESSION IS USED AND HAVING REGARD TO THE OBJECT AND PURPOSE FOR WHICH THE SAME IS ENACTED. SEC.10(10C) WAS INSERTED IN ORDER TO MAKE VOLUNTARY RETIREMENT ATTRACTIVE SO AS TO REDUCE HUMAN COMPLEMENTS FOR SECURING ECONOMIC VIABILITY OF CERTAIN COMPANIES. THIS OBJECT WAS ELABORATED BY VARIOUS DEPARTMENTAL CIRCULARS AND EXPLANATORY STATEMENTS ISSUED FROM TIME TO TIME. SIMILARLY, RU LE 2BA OF THE INCOME TAX RULES, 1962, WHICH WAS INSERTED BY IT (SIXTEENTH AMENDMENT) RULES, 1962, WAS AMENDED FROM TIME TO TIME. ALL THESE GO TO SHOW THAT THIS WAS INTENDED TO MAKE VOLUNTARY RETIREMENT MORE ATTRACTIVE AND BENEFICIAL TO THE 11 EMPLOYEE OPTING FOR VOLUNTARY RETIREMENT. THEREFOR E, THIS HAS TO BE INTERPRETED IN A MANNER BENEFICIAL T O THE OPTEE FOR VOLUNTARY RETIREMENT, IF THERE IS ANY AMBIGUITY. SUMS PAID ON VOLUNTARY RETIREMENT TO THE EXTENT OF RUPEES FIVE LAKHS ARE EXEMPTED FROM BEING CHARGED TO TAX BY REASON OF SECTION 10(10C). EVEN IF THE PAYMENT IS STRETCHED OVER A PERIOD OF YEARS, TH E SAME WOULD NOT BECOME CHARGEABLE TO TAX IN ANY SUBSEQUENT ASSESSMENT YEAR. FROM THE ABOVE IT IS EVIDENT THAT THEIR LORDSHIPS OF THE JURISDICTIONAL HIGH COURT HELD THA T AN EMPLOYEE, WHO TAKES VOLUNTARY RETIREMENT, IS ENTITLED TO DEDUCTION UNDER SECTION 10(10C) EVEN IF THE PAYMENT IS STRETCHED OVER A PERIOD OF YEARS. THEY HAVE ALSO HELD THAT PROVISION OF SECTION 10(10C) SHOULD BE INTERPRETED IN A MANNER BENEFICIA L TO THE OPTEE FOR VOLUNTARY RETIREMENT. IT MAY BE POINTED OUT THAT IN THE ABOVE-MENTIONED CASE, THE EMPLOYER I.E. SAIL WAS OF THE OPINION THAT THE EMPLOYEES WERE NOT ENTITLED TO EXEMPTION UNDER SECTION 10(10C) AND ACCORDINGLY, SAIL HAD BEEN DEDUCTING TAX AT SOURCE ON THE AMOUNT PAID UNDER THEIR VOLUNTARY RETIREMENT SCHEME. THE FACTS ARE SIMILAR IN THE ASSESSES CASE, BECAUSE IN THE CASE O F THE ASSESSEE ALSO, THE EMPLOYER BELIEVING THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 10(10C) HAS DEDUCTED TAX AT SOURCE ON THE AMOUNT PAID ON VOLUNTARY RETIREMENT. THE FACTS BEING IDENTICAL, THE ABOVE DECISION OF HON'BLE JURISDICTI ONAL HIGH COURT WOULD BE SQUARELY APPLICABLE TO THE CASE UNDER APPEAL BEFORE THE TRIBUNAL. 6. SIMILARLY, HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. NAGESH DEVIDAS KULKARNI (SUPRA) HELD AS UNDER : 12 THE ASSESSEE IS ENTITLED TO THE EXEMPTION UNDER SECTION 10(10C) OF THE ACT AND ALSO REBATE UNDER SECTION 89 OF THE ACT IN RESPECT OF THE AMOUNT RECEIVED IN EXCESS OF RS.5,00,000 ON ACCOUNT OF VOLUNTARY RETIREMENT. THUS THEIR LORDSHIPS HAVE HELD THAT THE ASSESSEE, WHO OPTS FOR VOLUNTARY RETIREMENT, IS NOT ONLY ENTITLED TO EXEMPTION UNDER SECTION 10(10C) BU T ALSO REBATE UNDER SECTION 89 OF THE INCOME TAX ACT. SIMILAR VIEW IS TAKEN BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. P. SURENDRA PRABHU (SUPRA) WHEREIN THEIR LORDSHIPS HELD AS UNDER : THAT THE ASSESSEE, EMPLOYEE OF THE RESPONDENT BANK WAS NOT ONLY ENTITLED TO THE BENEFIT OF EXEMPTION UNDER SECTION 10(10C) OF THE ACT TO THE EXTENT PRESCRIBED IN THE PROVISION ITSELF BUT FOR A NY AMOUNT OVER AND ABOVE THE PRESCRIBED LIMIT; UNDER THE AFORESAID PROVISION, THE ASSESSEE WAS ALSO ENTITLED TO RELIEF UNDER SECTION 89(1) OF THE ACT R EAD WITH RULE 21A. 6. FROM THE ABOVE IT IS EVIDENT THAT WHILE THE LEAR NED AM RELIED UPON THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. M.CHELLADURAI & ORS. (2009) 317 ITR 370(MAD) : (2009) 176 TAXMAN 31, HE HAS NOT TAKEN INTO ACCOUNT THE DECISIONS OF OTHE R HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT . THE HON'BLE JURISDICTIONAL HIGH COURT UNDER THE IDENTICAL FACTS HELD THE ASSESSEE, I.E., THE RETIRE D EMPLOYEE, TO BE ENTITLED TO DEDUCTION UNDER SECTION 10(10C). SIMILAR VIEW IS TAKEN BY HON'BLE BOMBAY AS WELL AS KARNATAKA HIGH COURTS. THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IS BINDING UPON U S AND MOREOVER IF TWO VIEWS ARE POSSIBLE, WHILE INTERPRETING THE PROVISION, A VIEW WHICH IS FAVOURABLE TO THE ASSESSEE HAS TO BE ADOPTED. HON'BLE JURISDICTIONAL HIGH COURT IN THE ABOVE- 13 REFERRED CASE OF SAIL DSP VR EMPLOYEES ASSOCIATION 1998 V. UNION OF INDIA (SUPRA) HAS ALSO HELD THAT T HE PROVISIONS OF SECTION 10(10C) ARE TO BE INTERPRETED LIBERALLY IN A MANNER WHICH IS BENEFICIAL TO RETIRE D EMPLOYEES IN VIEW OF THE ABOVE. I RESPECTFULLY FOLLOWING THE DECISIONS OF HON'BLE JURISDICTIONAL H IGH COURT, BOMBAY HIGH COURT AND KARNATAKA HIGH COURT AGREE WITH THE LEARNED JM AND HOLD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 10(10C) TO THE EXTENT OF RS.5 LAKHS. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TR IBUNAL, WE ALLOW THE CLAIM OF ASSESSEE. 6. THE ISSUE IN QUESTION IS COVERED BY THE DECISION OF THE HON'BLE TRIBUNAL, AS REPRODUCED ABOVE. THE ASSESSEE/APPELLANT WAS ALSO EMPLOYED IN THE STATE B ANK OF INDIA. RESPECTFULLY FOLLOWING THE SAID DECISION, TH E APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. 9. IN MY OPINION, THE DECISION OF THE I.T.A.T., CHANDIGARH BENCH RENDERED IN THE CASE OF SHRI BIKR AM JIT PASSI (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS O F THE PRESENT CASE. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF T HE TRIBUNAL, I ALLOW THE CLAIM OF THE ASSESSEE HOLDING THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLOWING THE AMOUNT OF RS.5 LACS UNDER SECTION 10(10C) OF THE ACT. ACCORDINGL Y, I ALLOW GROUND NO.3 OF THE APPEAL. 10. AS REGARDS GROUND NO.4 OF THE APPEAL, I HOLD T HAT THERE WAS NO JUSTIFICATION IN MAKING DISALLOWANCE O F RS.24,295/- OUT OF RS.2,14,167/- RECEIVED BY THE AS SESSEE AS LEAVE ENCASHMENT, WHICH WAS CLAIMED AS EXEMPT UNDER SECTION 10(10AA) OF THE ACT. IT IS APPARENT FROM THE RECO RD THAT AN 14 AMOUNT OF RS.2,14,167/- WAS PAID TO THE ASSESSEE TO WARDS THE EARNED LEAVE DUE TO THE ASSESSEE FOR 240 DAYS. TH IS FACT STANDS ADMITTED BY THE ASSESSING OFFICER WHILE COMP LETING THE ASSESSMENT. HOWEVER, THE ASSESSING OFFICER HAD MA DE THE DISALLOWANCE DISPUTING THE CALCULATION MADE BY THE EMPLOYER OF THE ASSESSEE. IN MY OPINION, THERE WAS NO JUS TIFICATION IN DISPUTING THE CALCULATION MADE BY THE EMPLOYER OF T HE ASSESSEE, PARTICULARLY WHEN THE EMPLOYER HAD ALLOWE D THE SAID AMOUNT AS A DEDUCTION AFTER COMPUTING THE SAME UNDE R THE PROVISIONS OF THE LAW, WHICH FACT ALSO STANDS ADMIT TED BY THE ASSESSING OFFICER. IT IS CLEAR THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.2,14,167/- AS LEAVE ENCASHMENT AND, THEREFORE, THERE WAS NO JUSTIFICATION ON THE PART O F THE ASSESSING OFFICER TO DISPUTE THE CALCULATION MADE B Y THE EMPLOYER OF THE ASSESSEE. NO CLARIFICATION HAS BE EN SOUGHT FROM THE EMPLOYER BANK. IN THAT VIEW OF THE MATTE R, I DO NOT SEE ANY REASON FOR MAKING DISALLOWANCE OF RS.24,295 /- OUT OF THE AMOUNT OF RS.2,14,167/- RECEIVED BY THE ASSESSE E ON ACCOUNT OF LEAVE ENCASHMENT FROM HIS EMPLOYER. AC CORDINGLY, GROUND NO.4 OF THE APPEAL IS ALLOWED. 11. VIDE GROUND NO.5 OF THE APPEAL, THE ASSESSEE H AD CHALLENGED THE VALIDITY OF RE-OPENING OF THE ASSESS MENT. SINCE I HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON MERITS AND, THEREFORE, I DO NOT THINK IT NECESSARY TO DECIDE TH IS GROUND OF APPEAL AND DISCUSSION ON THIS ISSUE WOULD BE OF ACA DEMIC INTEREST AND NOTHING ELSE. 15 12. NO OTHER POINT WAS RAISED OR ARGUED BEFORE ME BY EITHER PARTY. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JUNE, 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 17 TH JUNE, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH