Ashok Kumar Mehta, Chandigarh V. ITO, W-5(3), Chandigarh

ITA 1427/CHANDI/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2953 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 15-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: KOMAL THAKUR SH R R THAKUR
• Keywords: Salary income; Opportunity of being heard; Revised return; Reassessment proceedings; TDS; Set aside
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.1427/CHD/2018 ASSESSMENT YEAR: 2007-08 SHRI ASHOK KUMAR MEHTA VS. THE ITO H.NO. 57, SECTOR 49A W-5(3) CHANDIGARH CHANDIGARH PAN NO. ABKPM6677L (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. KOMAL THAKUR, SH. R.R. THAKUR REVENUE BY : SMT. CHANDRAKANTA, SR. DR DATE OF HEARING : 05/03/2019 DATE OF PRONOUNCEMENT : 05/03/2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 13/09/2018 OF LD. CIT(A)-2, CHANDIGARH. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)2 HAS WRONGLY DECIDED THE APPEAL OF THE APPELLANT. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL )-2, CHANDIGARH HAS ERRED IN DISMISSING THE APPEAL OF THE APPELLANT WHI LE DECIDING THE APPEAL OF THE APPELLANT AND DISALLOWING THE CLAIM OF THE APPELLAN T FOR GRANT OF EXEMPTION U/S 10(10C) OF THE INCOME TAX ACT 1961. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEAL)-2, C HANDIGARH HAS OVERLOOKED STATUTORY PROVISION CLAIMED BY THE ASSES SEE IN APPEAL A MISTAKE APPARENT FROM RECORD WHICH IS RECTIFIABLE U/S 154 O F THE INCOME TAX ACT AND THE APPELLANT IS ENTITLED TO EXEMPTION U/S 10(10C) WHIC H HE POINTED OUT U/S 154 OF THE INCOME TAX ACT 1961. 4. ANY OTHER GROUND WHICH MAY BE TAKEN BEFORE THE H EARING OF APPEAL WITH PERMISSION OF HONOURABLE INCOME TAX TRIBUNAL. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 30/07/2007 DECLARING AN INCOME OF RS. 10,39,510/ -. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DT. 27/06/2011 OBSERVED THAT I N THE COMPUTATION OF INCOME THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 10(10C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) FO R A SUM OF RS. 7,28,136.96 RECEIVED AS A GRATUITY. HE ALSO OBSERVED THAT THE A SSESSEE STATED IN HIS REPLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT TH E SAID AMOUNT WAS 2 INCLUDED IN THE SALARY INCOME AND TDS AMOUNTING TO RS. 2,18,450/- WAS DEDUCTED ON THE SAME. HOWEVER THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 10(10C) WAS NOT ALLOWED. THEREAFTER THE ASS ESSEE FILED AN APPLICATION UNDER SECTION 154 OF THE ACT WHICH WAS REJECTED BY THE ASSESSING OFFICER BY OBSERVING THAT THE ASSESEE NEITHER CLAIMED THE EXEM PTION UNDER SECTION 10(10C) OF THE ACT IN THE RETURN OF INCOME NOR FILE D THE REVISED RETURN FOR CLAIMING THE SAID EXEMPTION. 4. BEING AGGRIEVED THE ASSESSEE FILED THE APPEAL BE FORE THE LD. CIT(A) WHO UPHELD THE VIEW TAKEN BY THE ASSESSING OFFICER BY O BSERVING IN PARA 4.3 OF THE IMPUGNED ORDER AS UNDER: 4.3 I HAVE CONSIDERED THE ORDER OF THE AO AND THE S UBMISSIONS OF THE LD. AR. THE ASSESSEE FILED HIS RETURN OF INCOME OF RS 10,39 ,510/- ON 30.07.2009. IN THE COMPUTATION OF INCOME THE ASSESSEE HAD CLAIMED DEDU CTION U/S 10(10C) OF RS 7,28,136/- ON ACCOUNT OF EX-GRATIA PAYMENT AT THE T IME OF SEEKING VOLUNTARY RETIREMENT FROM THE BANK. THE AO OBSERVED THAT THE ASSESSEE HAD SOUGHT RETIREMENT UNDER THE EXIT OPTION SCHEME AND THE AMO UNT HAS BEEN RECEIVED BY HIM AS EX-GRATIA WHICH IS NOT FORMULATED AS PER THE STIPULATION OF SECTION 10(10C) OF THE ACT READ WITH RULE 2BA OF THE ACT. THUS THE CASE WAS REOPENED U/S 147. DURING THE COURSE OF THE REASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE STATED THAT THE EX-GRATIA PAYMENT OF RS 7,28,136/- WAS INF ACT NOT CLAIMED EXEMPT AS THE EMPLOYER HAD INCLUDED IT IN THE SALARY AND TDS OF R S 2,18,450/- WAS DEDUCTED ON IT. SINCE THE CLAIM OF INADMISSIBLE EXEMPTION UNDER SECTION 10(10C) WAS FOREGONE BY THE ASSESSEE AND THE SAME WAS INCLUDED IN THE IN COME AND THE TAX WAS PAID THEREON, THE AO ACCEPTED THE RETURNED INCOME IN HIS ORDER DATED 27.06.2011. SUBSEQUENT TO THIS ORDER THE APPELLANT HAS MOVED AN APPLICATION TO ALLOW THE EXEMPTION U/S 154 OF THE ACT. SUCH A CLAIM IS TOTAL LY UNJUSTIFIED AND NOT PERMISSIBLE. MISTAKES APPARENT ON RECORD CAN BE REC TIFIED U/S 154. IN THIS CASE, A CLAIM WHICH WAS EXAMINED IN THE ASSESSMENT PROCEEDI NGS AND DENIED AS THE CONDITIONS OF THE ACT WERE NOT FULFILLED AND THUS F OREGONE BY THE APPELLANT, IS SOUGHT TO BE MADE U/S 154. THE PROVISIONS OF THE SE CTION DO NOT ALLOW FOR ENTERTAINING SUCH CLAIMS UNDER THE SAID SECTION. TH E RELIANCE OF THE ID. AR ON THE CASE OF MADAN LAL SHARMA VS. ACIT DECIDED BY THE HO N'BLE ITAT, CHANDIGARH IN ITA NO. 1245/CHD/2016, DECISION DATED 11.08.2016, I S MISPLACED AS THE FACTS OF THE CASE ARE TOTALLY DIFFERENT. IN THE CASE OF MADAN LA L SHARMA, THE ASSESSEE HAD FILED THE RETURN WITHOUT CLAIMING THE EXEMPTION U/S 10(10C). THE SAID RETURN WAS PROCESSED U/S 143(1). ON BEING AWARE THAT THE ASSES SEE WAS ELIGIBLE FOR THE EXEMPTION U/S 10(10C) THE ASSESSEE MADE THE CLAIM U /S 154. THE REVENUE HAD NOT DISPUTED THAT THE CLAIM WAS AS PER LAW. IN SUCH SITUATION, THE HON'BLE ITAT HAD ALLOWED THE CLAIM U/S 154. IN THE PRESENT CASE, THE CLAIM OF THE EXEMPTION WAS DISPUTED, INFACT FOREGONE BY THE APPELLANT IN THE R EASSESSMENT PROCEEDINGS. TO ALLOW SUCH A CLAIM U/S 154 IS CLEARLY NOT PERMISSIB LE AS PER LAW. THUS THE ASSESSING OFFICER HAS CORRECTLY REJECTED THE APPLICATION U/S 154. THE GROUND OF APPEAL IS DISMISSED. 5. NOW THE ASSESSEE IS IN APPEAL. 6. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CLAIM WAS MADE BEFORE THE ASSESSING OFFICER IN THE COMPUTATION OF INCOME AS WELL AS DURING THE COURSE OF ASSESSMENT PROCEEDING THEREFORE THE MISTAKE WAS APPARENT FROM THE RECORD 3 AND THE ASSESSING OFFICER OUGHT TO HAVE RECTIFIED T HE SAME UNDER SECTION 154 OF THE ACT. 7. IN HER RIVAL SUBMISSIONS THE LD. DR STRONGLY SUP PORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. I HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE IT IS NOTI CED THAT THE ASSESSING OFFICER HIMSELF ADMITTED IN THE BODY OF THE ASSESSMENT ORDE R DT. 27/06/2011 THAT THE ASSESSEE IN THE COMPUTATION OF INCOME CLAIMED EXEMP TION UNDER SECTION 10(10C) ON ACCOUNT OF GRATUITY RECEIVED ON VOLUNTAR Y RETIREMENT. HOWEVER THE SAID CLAIM WAS NOT ALLOWED WHILE PASSING THE ASSESS MENT ORDER AND EVEN THE RECTIFICATION APPLICATION FILED UNDER SECTION 154 O F THE ACT WAS REJECTED, THE LD. CIT(A) ALSO UPHELD THE VIEW TAKEN BY THE ASSESSING OFFICER. 9. IN MY OPINION THAT THE ASSESSING OFFICER ON THE ONE HAND ADMITTED THAT THE ASSESEE CLAIMED THE EXEMPTION IN THE COMPUTATIO N OF INCOME FURNISHED ALONGWITH RETURN OF INCOME AND THE AMOUNT OF GRATUI TY WAS SHOWN IN THE SALARY INCOME ON THE OTHER HAND STATED IN THE ORDER PASSED UNDER SECTION 154 OF THE ACT, THAT THE ASSESSEE DID NOT CLAIM THE EXEMPTION. THEREFORE THE FACTS ARE NOT CLEAR. IN THAT VIEW OF THE MATTER THE IMPUGNED ORDE R IS SET ASIDE AND THE ISSUE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 05/03/2019.) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 05/03/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR