Shri Anil Suri, Chandigarh V. DCIT, C-1(1), Chandigarh

ITA 127/CHANDI/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4910 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-10-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 05-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN
• Assessee Lawyers: PANKAJ BHALLA
• Keywords: Revised return; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 127/CHD/2019 / ASSESSMENT YEAR : 2014-15 SHRI ANIL SURI, H.NO.699, SECTOR 11-B, CHANDIGARH DCIT, CIRCLE 1(1), CHANDIGARH ./PAN NO: AMCPS9331C / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI PANKAJ BHALLA, ADVOCATE ' ! / REVENUE BY : SHRI ARVIND SUDERSHAN, SR.DR # $ % /DATE OF HEARING : 16.10.2019 &'() % / DATE OF PRONOUNCEMENT : 30.10.2019 ')/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 13.12.2018 OF THE COMMISSIONER OF INCO ME TAX (APPEALS)- 1, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(A) ] 2. THE ASSESSEE IN THIS APPEAL HAS RAISED FOLLOWIN G GROUNDS OF APPEAL:- 1. THAT THE LD. C.I.T.(A)-1, CHANDIGARH, HAS WRONG LY PASSED THE ORDER U/S 250(6) OF THE INCOME TAX ACT, 1961 AGAINST LAW AND FACTS OF THE CASE. ITA NO. 127-CHD/2019- SHRI ANIL SURI, CHANDIGARH 2 2. THAT THE LD. CIT(A)-1, CHANDIGARH ERRED IN FACT S AND IN LAW IN MAKING DISALLOWANCE OF CLAIM MADE BY ASSE SSEE U/S 10(10A)(II) OF THE ACT OF RS. 15,65,410/- WITHOUT A N / BASE AND REASON THEREOF. 3. THAT THE ORDER OF THE AUTHORITIES BELOW ARE HIG HLY UNJUST, ARBITRARY, AGAINST EQUITY AND NATURAL JUSTI CE AND HENCE LIABLE TO BE SET ASIDE ON THIS SCORE ALSO. 4. FURTHER THAT THE ENTIRE AMOUNT OF COMPENSATION OF RS. 46,96,247/- IS EXEMPT AS SECTION 56(XI) WAS INSERTE D FROM A.Y. 2019-20. 3. A PERUSAL OF ABOVE GROUNDS OF APPEAL REVEALS THAT THE ASSESSEE HAS AGITATED THE ACTION OF THE LOWER AUTHORITIES IN MAKING / UPHOLDING THE DISALLOWANCE OF CLAIM MADE BY THE ASSESSEE U/S 10(10A)(II) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') OF RS . 15,65,410/-. 4. THE BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER N OTICED THAT THE ASSESSEE HAD REVISED HIS RETURN OF INCOME AND THER EBY OFFERED LESS INCOME THAN THAT WAS SHOWN IN THE ORIGINAL RETURN. ON BEING ASKED TO EXPLAIN IN THIS RESPECT, THE ASSESSEE EXPLAINED AS UNDER:- REPLY DATED 24.10.2016 THE PERUSAL OF THE ABOVE COMPARATIVE CHART REVEALS THAT THERE IS FALL IN INCOME IN THE REVISED RETURN OF INCOME T O THE TUNE OF RS. 15,65,416/- UNDER THE HEAD INCOME FROM SALARIES . THE REASON FOR THE FALL IS THAT, DURING THE F.Y. 2013-1 4 RELEVANT OF THE A.Y. 2014-15, THE ASSESSEE HAD RECEIVED A SU M OF RS. 46,96,247/- BY WAY OF COMMUTED VALUE OF PENSION AS ONE TIME SETTLEMENT FROM HIS EMPLOYER M/S RANBAXY ITA NO. 127-CHD/2019- SHRI ANIL SURI, CHANDIGARH 3 LABORATORIES LTD.. THE DETAILS OF WHICH IS GIVEN IN FORM NO. 16 ISSUED BY THE COMPANY. AS PER SECTION 10(0A) OF THE INCOME TAX ACT. 1961, 1/3' OF SUCH COMPUTED VALUE OF PENSION IS EXEMPT IN THE HANDS OF THE EMPLOYEE, WHI CH IN THE CASE OF THE ASSESSEE COMES TO RS. 15,65,416/-. THE ASSESSEE HAD NOT TAKEN THE BENEFIT OF SECTION 10(10 A) IN THE ORIGINAL RETURN OF INCOME. AS SUCH REVISED RETURN O F INCOME WAS FILED AND THE BENEFIT OF THE SAME SECTION WAS A VAILED BY THE ASSESSEE. THE ASSESSED DURING THE F.Y. 2013-14 HAD EXERCISED THE OPTION OF WITHDRAWING THE RETIRAL BEN EFITS / PRIVILEGES AS ONE TIME SETTLEMENT AFTER PUTTING IN THE REQUISITE YEARS OF SERVICE REQUIRED AS PER THE PERSONNEL POLI CY OF THE EMPLOYER M/S RANBAXY LABORATORIES LTD. COPIES OF PE RSONNEL POLICY ALONQWITH OFFER LETTER AND FORM NO 16 ARE AT TACHED HEREWITH.' HOWEVER, THE ASSESSING OFFICER OBSERVED FROM THE RE CORD THAT DURING THE YEAR UNDER CONSIDERATION, EMPLOYER OF THE ASSES SEE HAD INTRODUCED NEW RETRIAL POLICY I.E. PERSONNEL POLICY NO.32D SUPERSEDING THE EXISTING PERSONNEL POLICY NO.32A, 3 2B AND 32C. THE ASSESSING OFFICER FURTHER OBSERVED THAT AS PER THE EARLIER POLICIES, THE EMPLOYEE AND HIS / HER FAMILY (IN CASE OF EMPLOYEE WHO DIED WHILST IN SERVICE) WOULD BE ELIGIBLE FOR PENSION, GRATUIT Y, MEDICAL AND OTHER BENEFITS LIKE ACCOMMODATION AND EDUCATION FOR CHILD REN. THE NEW POLICY , HOWEVER, TOOK AWAY ALL THE BENEFITS EXCEP T THE GRATUITY BENEFITS WHICH THEY USED TO ENJOY WHEN POLICIES 32A, 32B AN D 32C WERE IN EXISTENCE IN LIEU OF THE SAME, THE ASSESSEE WAS PAI D A SUM OF RS. 46,96,247/- AS ONE TIME SETTLEMENT VIDE LETTER DATE D 20'' MARCH 2013. THE ASSESSEE TREATED THIS AMOUNT AS COMMUTED PENSIO N AND 1/3 OF THE SAME WAS CLAIMED AS EXEMPT U/S 10(10A)(II) OF THE I NCOME TAX ACT, ITA NO. 127-CHD/2019- SHRI ANIL SURI, CHANDIGARH 4 1961. THE ASSESSING OFFICER OBSERVED THAT THE ASSES SEE CONTINUED TO WORK WITH RANBAXY LABORATORIES LTD., AS WAS EVIDENT FROM THE ITR OF THE ASSESSEE FOR THE NEXT ASSESSMENT YEAR I.E. A.Y. 2014-15, SHOWING THAT THE ASSESSEE HAD DRAWN SALARY FROM THE SAID C OMPANY. HE, THEREFORE, HELD THAT THE VERY BASIC CONDITION FOR TREATING ANY SUM AS PENSION WAS THAT EMPLOYER-EMPLOYEE RELATION SHOULD COME TO AN END, WHEREAS, IN THIS CASE, THIS CONDITION WAS NOT FULFI LLED AS THE ASSESSEE CONTINUED TO WORK WITH THE EMPLOYER FROM WHOM HE HA D RECEIVED MONEY AS ONE TIME SETTLEMENT. HE, ACCORDINGLY DISALLOWED THE CLAIM OF THE ASSESSEE OF EXEMPTION OF 1/3 RD OF AFORESAID COMPENSATION AMOUNT CLAIMED BY THE ASSESSEE AS COMMUTED PENSION U/S 10( 10A)(II) OF THE ACT. 5. THE LD. CIT(A) CONFIRMED THE DISALLOWANCE SO MA DE BY THE ASSESSING OFFICER. THE ASSESSEE, THUS, HAS COME IN APPEAL BEFORE US. 6. THE SOLE ISSUE IN THE PRESENT APPEAL IS REGARDI NG THE NATURE OF COMPENSATION RECEIVED BY THE ASSESSEE FROM HIS EMPL OYER. THE UNDISPUTED FACTS ARE THAT THE EMPLOYER INTRODUCED N EW POLICY FOR PAYMENT OF PENSION / COMMUTED PENSION TO THE EMPLOY EES. AS PER THE SAID POLICY, THE EMPLOYER OF THE ASSESSEE HAD DRAWN ANNUITY POLICY FOR ITS EMPLOYEES FROM LIFE INSURANCE CORPORATION OF INDIA. OUT OF THE TOTAL FUND VALUE PAYABLE TO THE ASSESSEE, AN AM OUNT OF RS. 46,96,247/- WAS PAID TO THE ASSESSEE ON ACCOUNT OF COMMUTED ITA NO. 127-CHD/2019- SHRI ANIL SURI, CHANDIGARH 5 PENSION AND THE BALANCE FUNDS WAS TO BE UTILIZED FO R PAYING MONTHLY PENSION AFTER GETTING RELIEVED FROM SERVICE. THOUG H, THE ASSESSEE WAS NOT IMMEDIATELY RETIRED FROM THE SERVICE AND C ONTINUED WITH THE EMPLOYMENT WITH HIS EMPLOYER, YET, THE BASIC INTENT AND PURPOSE OF THE AFORESAID PAYMENT TO THE ASSESSEE WAS THAT OF P AYMENT TOWARDS COMMUTED PENSION TO THE EMPLOYEES. THOUGH, GENERALL Y THE RETRIAL BENEFITS ARE PAID ON RETIREMENT FROM SERVICE, HOWEV ER, UNDER CERTAIN CIRCUMSTANCES, EMPLOYMENT MAY BE CONTINUED SUBJECT TO PAYMENT OF RETRIAL BENEFITS. AFTER PERUSAL OF THE FACTS OF THE CASE, WE ARE OF THE VIEW, THAT THE AFORESAID PAYMENT TO THE ASSESSEE WAS NOTHING B UT THE PAYMENT OF RETIRAL BENEFITS TOWARDS COMMUTED PENSION. WE, THER EFORE, ARE OF THE VIEW THAT THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE U/S 10(10A)(II) OF THE ACT. T HE ACTION OF THE LOWER AUTHORITIES ON THIS ACCOUNT IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE ASSES SEE MADE U/S 10(10A)(II) OF THE ACT. THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.10.2019. SD/- SD/- ( # $ % &' / ANNAPURNA GUPTA) '( / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 30.10.2019 ITA NO. 127-CHD/2019- SHRI ANIL SURI, CHANDIGARH 6 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR