Ranjit Singh Grewal, Bhiwani V. ACIT, Bhiwani

ITA 1521/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6851 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 21-07-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 22-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SHAVETA NAKRA DATTA
• Keywords: Benefit of exemption
• 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.1521/DEL/2016 ASSESSMENT YEAR : 2010-11 RANJIT SINGH GREWAL, HOUSE NO.G-2, BANK COLONY, PALUWAS MOR, ROHTAK ROAD, BHIWANI. PAN: ADCPG3283E VS. ACIT, WARD-1, BHIWANI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V. RAJA KUMAR, ADVOCATE DEPARTMENT BY : MRS. SHAVETA NAKRA DATTA, SR. DR DATE OF HEARING : 21.07.2016 DATE OF PRONOUNCEMENT : 21.07.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT(A) ON 29.01.2016 IN RELATION TO T HE ASSESSMENT YEAR 2010-11. ITA NO.1521/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/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE WAS AN EMPLOYEE OF KRISHI KALYAN KENDRA, BHIWANI WHICH WAS AFFILIATED TO HARYANA AGRICULTURAL UNIVERSITY, HISAR (HEREINAFTER CALLED HAU) AND RETIRED FROM SERVICE ON 30.06.2007. ORIGINAL RETUR N FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS.9,02,940/- WAS FILED, WHICH WAS PROCES SED U/S 143(1) OF THE ACT. LATER ON THE ASSESSEE REVISED HIS RETURN O F INCOME ON 04.07.2011 DECLARING A FURTHER INCOME OF RS.1,52,39 8/- THE AO INITIATED RE-ASSESSMENT PROCEEDINGS ON THE PREMISE THAT THE ASSESSEE HAD WRONGLY CLAIMED EXEMPTION U/S 10(10) IN RESPECT OF THE ARREARS OF GRATUITY. HE OBSERVED THAT GRATUITY WAS EXEMPT UP TO THE LIMIT OF RS.3,50,000/- ONLY IN THE CASE OF THE ASSESSEE, WH ICH LIMIT 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 PERSONS ITA NO.1521/DEL/2016 3 RETIRING FROM SERVICE ON OR AFTER 24.5.2010. SINCE THE ASSESSEE RETIRED BEFORE THIS CUT-OFF DATE, THE AO OPINED THAT THE EX TENDED BENEFIT OF EXEMPTION WAS NOT AVAILABLE TO THE ASSESSEE. HE JE TTISONED THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10(10) OF THE ACT AN D HELD THAT THE CORRECT SECTION APPLICABLE WAS 10(10)(III). SINCE THE ASSES SEE WAS AN EMPLOYEE OF HAU, THE AO HELD THAT SUCH EMPLOYEES COULD NOT B E TERMED AS GOVERNMENT EMPLOYEES AND, HENCE, THE BENEFIT U/S 10 (10)(I) WAS NOT AVAILABLE TO THE ASSESSEE. RESULTANTLY, HE MADE AD DITION TOWARDS THE AMOUNT OF ARREARS OF GRATUITY RECEIVED AT RS.6,50,0 00/-. THE LD. CIT(A) ECHOED THE VIEW TAKEN BY THE AO THAT THE ASSESSEE W AS NOT A `HOLDER OF CIVIL POST UNDER THE STATE GOVERNMENT AND HENCE NO T ELIGIBLE FOR EXEMPTION U/S 10(10)(I). FURTHER, THE ASSESSEE WAS HELD TO BE NOT COVERED U/S 10(10)(II) AS HE DID NOT RECEIVE ANY GR ATUITY UNDER THE PAYMENT OF GRATUITY ACT, 1972. THAT IS HOW, HE HEL D THAT THE EMPLOYEES OF THE HAU WERE COVERED U/S 10(10)(III) OF THE ACT, FOR WHICH THERE IS A LIMIT ON THE EXEMPT GRATUITY AMOUNT, WHICH STOOD EX HAUSTED BY THE ASSESSEE IN EARLIER YEAR. SINCE THE ASSESSEE WAS E MPLOYED BEFORE 24.5.2010, THE NOTIFICATION ISSUED BY THE CBDT ENHA NCING THE LIMIT OF ITA NO.1521/DEL/2016 4 RS.10 LAC ON GRATUITY U/S 10(10)(III) WAS HELD TO B E NOT APPLICABLE. THE ASSESSEE IS AGGRIEVED AGAINST THE CONFIRMATION OF D ENIAL OF EXEMPTION MADE BY THE LD. CIT(A). 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE 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/DEL/2016 HAS ALLOWED EXEMPTION, INTER ALIA, IN RESPECT OF THE ARREARS OF GRATUITY AND DISMISSED THE GROUNDS ABOUT THE INITIATION OF RE- ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN IN A HOST OF DECISIONS INCLUDING THE CASE OF RAGHUBIR SINGH PANGHAL VS. ITO IN ITA N O.1308/DEL/2016. FOLLOWING THE SAME, I EXTEND THE BENEFIT OF EXEMPTI ON TO THE INSTANT ASSESSEE ALSO IN RESPECT OF ARREARS OF GRATUITY U/S 10(10)(I). OTHER GROUNDS INCLUDING THE INITIATION OF REASSESSMENT PR OCEEDINGS WERE NOT PRESSED BY THE LD. AR. THE SAME, THEREFORE, STAND D ISMISSED AS NOT PRESSED. ITA NO.1521/DEL/2016 5 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.07.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 21 ST JULY, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.