Ram Dhari Rana, Hisar V. ITO, Hisar

ITA 1360/DEL/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4120 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 10-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 11-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Benefit of exemption; Reassessment proceedings
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.1360/DEL/2016 ASSESSMENT YEAR : 2010-11 RAM DHARI RANA, 234, SECTOR 15A, HISAR. PAN: ABHPR3661E VS. ITO, WARD -3, HISAR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V. RAJA KUMAR, ADVOCATE DEPARTMENT BY : SHRI ANIL KUMAR SHARMA, SR. DR DATE OF HEARING : 10.08.2016 DATE OF PRONOUNCEMENT : 10.08.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT(A) ON 23.12.2015 IN RELATION TO T HE ASSESSMENT YEAR 2010-11. ITA NO.1360/DEL/2016 2 2. THE ONLY ISSUE PRESSED BY THE LD. AR IN THIS APP EAL IS AGAINST THE DENIAL OF EXEMPTION IN RESPECT OF THE AMOUNT RECEIV ED BY THE ASSESSEE TOWARDS ARREARS OF GRATUITY AT RS.6,50,000/- AND AR REARS OF LEAVE ENCASHMENT AMOUNTING TO RS.2,48,480/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE WAS AN EMPLOYEE OF CHAUDHARY CHARAN SINGH HARYANA AGRICULT URAL UNIVERSITY, HISAR (HEREINAFTER CALLED CCS HAU) AND RETIRED FROM SERVICE BEFORE 24.05.2010. RETURN FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS.4, 74,150/- WAS FILED, WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THE AO I NITIATED RE- ASSESSMENT PROCEEDINGS ON THE PREMISE THAT THE ASSE SSEE HAD WRONGLY CLAIMED EXEMPTION U/S 10(10) IN RESPECT OF THE ARRE ARS OF GRATUITY AND ARREARS OF LEAVE ENCASHMENT. HE OBSERVED THAT GRAT UITY AND LEAVE ENCASHMENT WERE EXEMPT UP TO THE LIMIT OF RS.3,50,0 00/- AND RS.3 LAC, RESPECTIVELY, IN THE CASE OF THE ASSESSEE, WHICH LI MIT STOOD EXHAUSTED IN THE EARLIER YEAR AT THE TIME OF THEIR RECEIPT. HE FURTHER NOTICED THAT EXEMPTION LIMIT WAS ENHANCED TO RS.10 LAC FOR THE P ERSONS RETIRING FROM ITA NO.1360/DEL/2016 3 SERVICE ON OR AFTER 24.5.2010. SINCE THE ASSESSEE RETIRED BEFORE THIS CUT- OFF DATE, THE AO OPINED THAT THE EXTENDED BENEFIT O F EXEMPTION WAS NOT AVAILABLE TO THE ASSESSEE. HE JETTISONED THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10(10) OF THE ACT AND HELD THAT THE C ORRECT SECTIONS APPLICABLE WERE 10(10)(III) AND SECTION 10(10AA)(II ). SINCE THE ASSESSEE WAS AN EMPLOYEE OF CCS HAU, THE AO HELD THAT SUCH E MPLOYEES COULD NOT BE TERMED AS GOVERNMENT EMPLOYEES AND, HENCE, T HE BENEFIT U/S 10(10)(I) WAS NOT AVAILABLE TO THE ASSESSEE. RESUL TANTLY, HE MADE ADDITION TOWARDS THE AMOUNT OF ARREARS OF GRATUITY RECEIVED AT RS.6,50,000/- AND THE AMOUNT OF ARREARS OF LEAVE EN CASHMENT RECEIVED OF RS.2,48,480/-. THE LD. CIT(A) ECHOED THE VIEW TAKE N BY THE AO THAT THE ASSESSEE WAS NOT A `HOLDER OF CIVIL POST UNDER THE STATE GOVERNMENT AND HENCE NOT ELIGIBLE FOR EXEMPTION U/S 10(10)(I). FU RTHER, 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 H OW, HE HELD THAT THE EMPLOYEES OF THE CCS HAU WERE COVERED U/S 10(10)(II I) OF THE ACT, FOR WHICH THERE IS A LIMIT ON THE EXEMPT GRATUITY AMOUN T, WHICH STOOD EXHAUSTED BY THE ASSESSEE IN EARLIER YEAR. SINCE T HE ASSESSEE WAS ITA NO.1360/DEL/2016 4 EMPLOYED BEFORE 24.5.2010, THE NOTIFICATION ISSUED BY THE CBDT ENHANCING THE LIMIT OF RS.10 LAC ON GRATUITY U/S 10 (10)(III) WAS HELD TO BE NOT APPLICABLE. THE ASSESSEE IS AGGRIEVED AGAINST T HE CONFIRMATION OF DENIAL OF EXEMPTION MADE BY THE LD. CIT(A). 4. I HAVE HEARD THE LD. AR AND PERUSED THE 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/D EL/2016 HAS ALLOWED EXEMPTION IN RESPECT OF THE ARREARS OF GRAT UITY AND ARREARS OF LEAVE ENCASHMENT AND DISMISSED THE GROUNDS ABOUT TH E INITIATION OF RE- ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN IN THE CAS E OF RAGHUBIR SINGH PANGHAL VS. ITO IN ITA NO.1308/DEL/2016. 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 PROCEEDINGS WERE NOT PRESSED BY THE LD. AR. THE SAM E, THEREFORE, STAND DISMISSED AS NOT PRESSED. ITA NO.1360/DEL/2016 5 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 10.08.20 16. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 10 TH AUGUST, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.