Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 7650 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 30 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-05-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC 1
Next Hearing Date
25-05-2016
Assessment Year
2010-2011
Appeal Filed On
28-03-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 1 , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER IT A NO. 1574/DEL/2016 : ASSTT. YEAR : 2011 - 12 SH. JAGDEEP SINGH, H.NO. 1505, SECTOR - 13, HISAR VS INCOME TAX O FFICER, WARD - 2, HISSAR (APPELLANT) (RESPONDENT) PAN NO. A IXPS5980N ITA NO. 1575/DEL/2016 : ASSTT. YEAR : 2010 - 11 B.S. BOORA, S/O - SH. GOKAL CHAND, H.NO.741P PLA, HISAR VS INCOME TAX OFFICER, WARD - 1, HISSAR (A PPELLANT) (RESPONDENT) PAN NO. A CVPB9688A ITA NO. 1576/DEL/2016 : ASSTT. YEAR : 2010 - 1 1 SH. K. S. PANNU, H.NO. - 111, PLA, SECTOR - 15A, HISAR VS INCOME TAX OFFICER, WARD - 2, HISSAR (APPELLANT) (RESPONDENT) PAN NO. A FHPP5294F ITA NO. 1577/DEL/2016 : ASSTT. YEAR : 2010 - 11 BHUPINDER KUMAR BHATIA, S/O - SHRI HARI CHARAN BHATIA, H.NO. - 12A, TOWER ENCLAVE, DELHI ROAD, NEAR VIDYUT SADAN HISAR VS INCOME TAX OFFICER, WARD - 1 , HISS AR (APPELLANT) (RESPONDENT) PAN NO. A DRPB0178L IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 2 ITA NO. 1580/DEL/2016 : ASSTT. YEAR : 2010 - 11 SH. KAPOOR SINGH, H.NO. 191, SECTOR - 9 & 11 , HISAR VS INCOME TAX OFFICER, WARD - 2, HISSAR (APPELLANT) (RESPONDENT) PAN NO. A DZPS6875P ITA NO. 1581/DEL/2016 : ASSTT. YEAR : 2010 - 1 1 SH. RAM KRISHAN GUPTA , H.NO. 502, SECTOR - 9 - 11 , HISAR VS INCOME TAX OFFICER, WARD - 3 , HISSAR (APPELLANT) (RESPONDENT) PAN NO. AIXPS5980N ASSE SSEE BY : SH. VED JAIN & PRANJAL SRIVASTAVA, ADVS. REVENUE BY : SH. V. R. SONBHADRA , SR. DR DATE OF HEARING : 25 .05 .201 6 DATE OF PRONOUNCEMENT : 27 .05 .201 6 ORDER THESE APPEAL BY DIFFERENT ASSESSEES HAVING COM MON ISSUES INVOLVED ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LD. CIT(A), HISAR EACH DATED 29.01.2016. 2. SINCE THE APPEALS WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 3 3. AT TH E FIRST INSTANCE, I WILL TAKE THE CASE OF SH. B. S. BOORA IN ITA NO. 1575/DEL/2016. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CI T(A)] IS BAD, BOTH IN THE EYE OF LAW AND ON THE FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN L AW IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE AO WAS NOT JUSTIFIED IN REOPENING THE ASSESSM ENT UNDER SECTION 147 READ WITH SECTION 148 OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE REASSESSMENT PROCEEDINGS INITIATED BY THE LEARNED A.O. ARE BAD IN THE EYE OF LAW AS THE REASONS RECORDED FOR THE ISSUE OF NOTICE UNDER SECTION 148 A RE BASED MERELY ON ACCOUNT OF CHANGE OF OPINION. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE AO, IGNORING THE CONTENTION OF THE ASSESSEE THAT NO SPEAKING ORDER HAS BEE N PASSED BY THE AO FOR DISPOSING OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE REASONS RECORDED BY HIM IN VIEW OF SUPREME COURT LANDMARK JUDGMENT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. 259 ITR 79 (SC). 5. (I)0N THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE AO, DESPITE THE FACT THAT IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 4 THE INITIATION OF PROCEEDINGS UNDER SECTION 147, READ WITH SECTION 148 ARE BAD AS THE CONDITIONS AND PROCEDURE PRESCRIBED UNDER THE STATUTE HA VE NOT BEEN COMPLIED WITH. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE AO REJECTING THE CONTENTION OF THE ASSESSEE THAT THE REASON RECORDED FOR REOPENING OF THE ASSESSME NT ARE BAD IN LAW AND AS SUCH THE REOPENING OF THE ASSESSMENT IS ILLEGAL AND LIABLE TO BE QUASHED SO. 6. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRM ING THE ADDITION OF RS.4,78,150/ - MADE BY AO ON ACCOUNT OF EXCESS CLAIM OF GRATUITY. (II) THAT THE ABOVE ADDITION HAS BEEN CONFIRMED REJECTING THE EXPLANATION AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED BOTH ON FACTS AN D IN LAW IN CONFIRMING THE ADDITION DESPITE THE FACT THAT ASSESSEE BEING AN EMPLOYEE OF LOCAL AUTHORITY IS COVERED UNDER SECTION 10(10)(I) OF THE INCOME TAX ACT. 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 4 . AT T HE VERY FIRST INSTANCE, THE LD. COUNSEL FOR THE ASSESSEE ARGUED GROUND NOS. 6 & 7 WHICH RELATES TO THE CONFIRMATION OF ADDITION MADE BY THE AO ON ACCOUNT OF EXCESS CLAIM OF GRATUITY. IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 5 5. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE WAS I NITIALLY AN EMPLOYEE OF HARYANA STATE ELECTRICITY BOARD, WHICH L ATER ON, WAS BIFURCATED INTO 4 UTILITIES INCLUDING DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. (DBVNL) , WHOSE 100% SHARE CAPITAL WAS OWNED BY THE STATE GOVERNMENT. THE ASSESSEE RETIRED BEFORE 24.0 5.2010 AND RECEIVED ADDITIONAL AMOUNT OF GRATUITY OF RS.8,28,150/ - , T HE TDS WAS DEDUCTED ON THE SAID AMOUNT. THE ASSESSEE WAS GETTING HIS SALARY AS PER STATE RULE AND CLAIMED DEDUCTION OF FULL AMOUNT OF GRATUITY. THE ASSESSEE HAD MADE A CLAIM THAT HE WAS A N EMPLOYEE OF A LOCAL AUTHORITY AND THEREFORE, COVERED BY THE PROVISIONS OF SECTION 10(10)(I) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). HOWEVER, THE AO WAS OF THE VIEW THAT THE CLAIM FOR EXEMPTION IN RESPECT OF GRATUITY RECEIVED BY THE ASSESSEE WAS COVERED U/S 10(1 0 )(III) OF THE ACT AND AS PER PROVISIONS OF THIS SECTION, THE GRATUITY WAS EXEMPTE D UPTO THE LIMIT OF 3,50,000/ - FOR THE EMPLOYEES WHO RETIRED ON OR BEFORE 24.05.2010, THEREAFTER THE LIMIT WAS ENHANCED TO RS.10,00,000/ - . TH E AO ACCORDINGLY MADE THE ADDITION OF RS.4,78,150/ - . 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE AO BY OBSERVING IN PARA 5.6 AND 5.7 OF THE IMPUGNED ORDER AS UNDER: 5.6 THERE ARE FOLLOWING FACT S RELATED TO DHBVNL WHICH ARE DISCUSSED BELOW FOR THE CLARITY ON THE ISSUE IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 6 UNDER CONSIDERATION. THESE FACTS CLEARLY INDICATE THAT THE EMPLOYEES OF DHBVNL ARE NEITHER GOVERNMENT EMPLOYEES NOR THEY ARE NOT HOLDERS OF CIVIL POSTS UNDER THE STATE A) DHBVNL IS GOVERNED BY THE PROVISIONS OF ELECTRICITY ACT, 2003. THE PROVISIONS OF THIS ACT PREVAIL IN PREPARING THE ACCOUNTS WHEREVER THERE ARE INCONSISTENCY WITH THE COMPANIES ACT, 1956. DHBVNL PREPARES ITS FINANCIAL STATEMENT IN ACCORDANCE WITH THE FINANCIAL REPOR TING FRAMEWORK PRESCRIBED UNDER THE COMPANIES ACT, 1956 WHICH COMPRISES OF BALANCE SHEET, STATEMENT OF PROFIT AND LOSS, CASH FLOW STATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. ITS ACCOUNTS ARE AUDITED AS PER THE PROVISIONS OF COMPANIES ACT, 195 6. IT IS OBVIOUS FROM THESE FACTS THAT DHBVNL IS A COMPANY AND FOLLOWS THE ACCOUNTING PRINCIPLES AS APPLICABLE TO A COMPANY. B) HSEB WAS CONSTITUTED UNDER THE ELECTRICITY SUPPLY ACT, 1948. ELECTRICITY BOARDS WERE CONSTITUTED AS SEMI AUTONOMOUS BODIES TO A DMINISTER THE GRID SYSTEM WITHIN THE TERRITORIAL LIMITS OF THE PROVINCES. SUCH BOARDS WERE IN THE NATURE OF TRADING CORPORATION WITHIN THE MEANING OF ENTRY 33 OF THE FEDERAL LEGISLATIVE LIST ( AS MENTIONED IN THE ELECTRICITY SUPPLY ACT, 1948). THEREFORE, IT IS OBVIOUS THAT ELECTRICITY BOARDS HAD ITS OWN ADMINISTRATION AND WERE NOT TOTALLY UNDER THE CONTROL OF GOVERNMENT. C) DHBVNL IS A COMPANY WHICH HAS ISSUED AND ALLOTTED ITS SUBSTANTIAL SHARES TO THE GOVERNMENT OF HARYANA. OTHER SHARES ARE HELD BY M/S. HA RYANA VIDYUT PRASARAN NIGAM LTD. THE SHARE HOLDING OF THE IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 7 GOVERNMENT IN THE COMPANY DOES NOT MAKE THE EMPLOYEES OF THE COMPANY AS GOVERNMENT EMPLOYEES. D) THE MAJOR PORTION OF REVENUE IN THE CASE OF DHBVNL IS EARNING FROM SALE OF POWER. IT RECEIVES SUBSI DY AS WELL AS GRANT FROM THE GOVERNMENT. THE MAJOR EXPENSE OF DHBVNL INCLUDES COST OF PURCHASE OF POWER, INTEREST ON LOANS, DEPRECIATION AND EMPLOYEES BENEFIT EXPENSES ETC. THESE EMPLOYEES BENEFIT EXPENSES INCLUDE SALARIES, LTC, PENSION , LEAVE AND GRATUITY CONTRIBUTION. HENCE SALARIES, PENSION, GRATUITY ETC ARE PAID TO THE EMPLOYEES OF DHBVNL FROM ITS OWN CORPUS OF FUNDS AND IT IS NOT FROM THE CONSOLIDATED FUNDS OF THE STATE GOVERNMENT. THE RETIREMENT BENEFITS ARE BEING PROVIDED ON ACTUARIAL VALUATION BASIS AND AS PER THE CERTIFICATE OF THE ACTUARY IN ACCORDANCE WITH THE PROVISION OF ACCOUNTING STANDARD 15. GOVERNM ENT EMPLOYEES ARE PAID SALARIES , PENSION AND OTHER BENEFITS FROM THE CONSOLIDATED FUND OF INDIA AND SO IS NOT THE CASE OF EMPLOYEES OF DHBVNL. E) APPOINTMENT TO THE BOARD OF DIRECTORS OF DHBVNL IS AS PER THE PROVISIONS OF SECT ION 31 AND OTHER PROVISIONS OF C OMPANIES ACT, 1956 WHICH INCLUDES GOVERNMENT OFFICERS AS WELL AS EMPLOYEES OF DHBVNL AND SIMILAR OTHER CORPORATIONS. F) SELECTION OF THE EMPLOY EES OF DHBVNL IS BEING MADE BY HARYANA STAFF SELECTION COMMISSION. HSSC IS DOING SELECTION FOR NOT ONLY FOR GOVERNMENT POSTS BUT IT IS DOING SELECTION AND RECRUITMENT FOR VARIOUS POSTS OF BOARDS/ CORPORATION/PSUS. THE SERVICE CONDITIONS OF THE EMPLOYEES OF DHBVNL ARE GOVERNED BY THEIR OWN RULES AND REGULATIONS. THE FUNCTIONS OF IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 8 THE CORPORATIONS ARE ALSO GOVERNED BY REGULATORY AUTHORITY ON COMMERCIAL TERMS. G) DHBVNL HAS ONLY ADOPTED THE HARYANA GOVERNMENT NOTIFICATION I.E. HARYANA CIVIL SERVICES ( REVISED PENSION ) PART 1 & PART 2 RULES FOR PENSION AND PENSION RELATED MATTERS BUT IT DOES NOT MEAN THAT BY FOLLOWING THE RULES OF STATE GOVERNMENT, THE EMPLOYEES OF DHBVNL BECOMES THE GOVERNMENT EMPLOYEES. IN LIGHT OF THE ABOVE FACTS, DHBVNL CANNOT BE CONSIDERED AS LOCAL AUTHORITY AND ITS EMPLOYEES CANNOT BE CONSIDERED AS HOLDERS OF CIVIL POSTS UNDER A STATE. THEREFORE, THEY ARE NOT ELIGIBLE FOR EXEMPTION U/S. 10(10)(I) OF INCOME TAX ACT. 5.7 CONSIDERING THE ABOVE DISCUSSION, THE EMPLOYEES OF DHBVNL ARE HELD TO BE NOT ELIGIBLE FOR' EXEMPTION U/S. 10(10)(I) OF INCOME TAX ACT. THEY ARE NOT COVERED BY SECTION 10(10)(II) AS THEY ARE NOT RECEIVING GRATUITY UNDER THE PAYMENT OF GRATUITY ACT, 1972. HENCE, EMPLOYEES OF THE DHBVNL ARE COVERED U/S. 10(10)(III) OF I.T. ACT FOR WHICH THERE IS LIMIT ON THE GRATUITY AMOUNT ALLOWABLE. CBDT HAS APPROVED THE NOTIFICATION OF RS. 10 LAKHS ON THE MAXIMUM AMOUNT OF GRATUITY U/S. 10(10)(III) OF INCOME TAX ACT VIDE ITS NOTIFICATION NO 43/2010 DATED 11.06.2010. THIS NOTIFICATION IS APPLI CABLE TO EMPLOYEES WHO RETIRE ON OR AFTER 24.05.2010. BEFORE 24.05.2010 THE EXEMPTION U/S. 10(10)(II) WAS RESTRICTED TO RS. 3,50,000/ - . THEREFORE, I HOLD THAT THE APPELLANT WHO RETIRED BEFORE 24.05.2010 IS ELIGIBLE FOR EXEMPTION ON GRATUIT Y TO THE EXTENT O F RS. 3, 50,000/ - ONLY. THE ADDITION MADE BY AO OF RS. 4,78,150/ - ON ACCOUNT OF EXCESS CLAIM OF GRATUITY IS UPHELD. THE APPEAL ON THIS GROUND IS DISMISSED. IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 9 7. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE WAS AN EMPLOYEE OF HARYANA STATE GOVERNMENT AND WAS WORKING IN HARYANA STATE ELECTRICITY BOARD, WHICH LATER ON , WAS BIFURCATED INTO 2 UTILITIES NAMELY, HARYANA VIDYUT PRASARAN NIGAM LTD. (HVPNL) AND HARYANA ELECTRICITY REGULATORY COMMISSION (HERC). THE HVPNL WAS FURTHER REORGANIZED ON JULY 1, 1999 BY TWO MORE CORPORATIONS, NAMELY UTTAR HARYANA BIJLI VITRAN NIGAM LTD. (UHBVNL) AND DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. (DHBVNL) WITH THE RE SPONSIBILITY OF DISTRIBUTION AND RETAIL SUPPLY OF POWER WITHIN THEIR JURISDICTION. THE ASSESSEE WAS AN EMPLOYEE OF THE STATE GOVERNMENT IN DHBVNL WHO ADOPTED THE HARYANA GOVERNMENT NOTIFICATION DATED 17.04.2009 I.E. HARYANA CIVIL SERVICE (REVISED PENSION) PART - I, RULES 2009 AND HARYANA CIVIL SERVICE (REVISED PENSION) PART - 2, RULES, 2009. IT WAS FURTHER SUBMITTED THAT AS THE ASSESSEE WAS AN EMPLOYEE OF THE STATE GOVERNMENT , T HEREFORE, EXEMPTION WAS AVAILABLE U/S 10(10)(I) OF THE ACT AND THE LD. CIT(A) WAS NO T JUSTIFIED IN CONFIRMING THE ACTION OF THE AO WHO RESTRICTED THE EXEMPTION ON ACCOUNT OF GRATUITY AT RS.3,50,000/ - . IT WAS FURTHER SUBMITTED THAT WHEN THE ASSESSEE ALONGWITH ANOTHER EMPLOYEE WAS TRANSFERRED THE HARYANA IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 10 GOVERNMENT POWER DEPARTMENT ISSUED A NOTIFICATION DATED 14.08.1998 AND CLAUSE 11 OF THE SAID NOTIFICATION PROVIDED THAT IF THE PAY, DA AND ALLOWANCES, PENSION , DEATH - CUM - RETIREMENT BENEFIT AND GRATUITY ETC. SHALL NOT BE LESS THAN THOSE APPLICABLE BEFORE THE DATE OF TRANSFER (COPY OF THE SAID NOTIFICATION WAS FURNISHED WHICH IS PLACED ON RECORD). IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION OF THE WHOLE OF THE AMOUNT RECEIVED ON ACCOUNT OF GRATUITY U/S 10(10)(I) OF THE ACT . IT WAS ALSO STATE D THAT THE DEPARTMENT IT SELF HAS ALLOWED THE EXEMPTION TO ANO THER EMPLOYEES WHILE PASSING THE ASSESSMENT ORDER U/S 147 R.W.S. 143(3) OF THE ACT (COPY OF THE ONE OF SUCH ORDER DATED 18.05.2012 IN THE CASE OF JAI DAYAL SINGH OF FARIDABAD, WAS FURNISHED WHICH IS PLACED ON RECORD). 8. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE WAS NOT AN EMPLOYEE OF THE HARYANA STATE GOVERNMENT RATHER IT WAS AN EMPLOYEE OF DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. W HICH WAS A CORPORATION. IT WAS ALSO SUBMITTED THAT THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION U/S 10(10)(III) OF THE ACT AND WRONGLY CLAIMED THE EXEMPTION U/S 10(10)(I) OF THE ACT. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN CONFIRMING THE ACTION OF THE AO. IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 11 9. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE M ATERIAL AVAILABLE ON THE RECORD, T O RESOLVE THE PRESENT CONTROVERSY IT IS RELEVANT TO DISCUSS THE PROVISIONS CONTAINED IN SECTION 10(10)(I), (II) & (III) OF THE AC T WHICH READ AS UNDER: (10) (I) ANY DEATH - CUM - RETIREMENT GRATUITY RECEIVED UNDER THE REVISED PENSION RULES OF THE CENTRAL GOVERNMENT OR, AS THE CASE MAY BE, THE CENTRAL CIVIL SERVICES (PENSION) RULES, 1972 , OR UNDER ANY SIMILAR SCHEME APPLICABLE TO TH E MEMBERS OF THE CIVIL SERVICES OF THE UNION OR HOLDERS OF POSTS CONNECTED WITH DEFENCE OR OF CIVIL POSTS UNDER THE UNION (SUCH MEMBERS OR HOLDERS BEING PERSONS NOT GOVERNED BY THE SAID RULES) OR TO THE MEMBERS OF THE ALL INDIA SERVICES OR TO THE MEMBERS O F THE CIVIL SERVICES OF A STATE OR HOLDERS OF CIVIL POSTS UNDER A STATE OR TO THE EMPLOYEES OF A LOCAL AUTHORITY OR ANY PAYMENT OF RETIRING GRATUITY RECEIVED UNDER THE PENSION CODE OR REGULATIONS APPLICABLE TO THE MEMBERS OF THE DEFENCE SERVICES; (II) ANY GRATUITY RECEIVED UNDER THE PAYMENT OF GRATUITY ACT, 1972 (39 OF 1972 ), TO THE EXTENT IT DOES NOT EXCEED AN AMOUNT CALCULATED IN ACCORDANCE WITH THE PROVISIONS OF SUB - SECTIONS (2) AND (3) OF SECTION 43 OF THAT ACT; (III) ANY OTHER GRATUITY RECEIVED BY AN EMPLOYEE ON HIS RETIREMENT OR ON HIS BECOMING INCAPACITATED PRIOR TO SUCH RETIREMENT OR ON TERMINATION OF HIS EMPLOYMENT, OR ANY GRATUITY RECEIVED BY HIS WIDOW, IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 12 CHILDREN OR DEPENDENTS ON HIS DEATH, TO THE EXTENT IT DOES NOT, IN EITHER CASE, EXCEED ONE - HALF MONTH'S SALARY FOR EACH YEAR OF COMPLETED SERVICE, CALCULATED ON THE BASIS OF THE AVERAGE SALARY FOR THE TEN MONTHS IMMEDIATELY PRECEDING THE M ONTH IN WHICH ANY SUCH EVENT OCCURS, SUBJECT TO SUCH LIMIT AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN THIS BEHALF HAVING REGARD TO THE LIMIT APPLICABLE IN THIS BEHALF TO THE EMPLOYEES OF THAT GOVERNMENT]: PROVIDED THAT WHERE ANY GRATUITIES REFERRED TO IN THIS CLAUSE ARE RECEIVED BY AN EMPLOYEE FROM MORE THAN ONE EMPLOYER IN THE SAME PREVIOUS YEAR, THE AGGREGATE AMOUNT EXEMPT FROM INCOME - TAX UNDER THIS CLAUSE SHALL NOT EXCEED THE LIMIT SO SPECIFIED]: PROVIDED FURT HER THAT WHERE ANY SUCH GRATUITY OR GRATUITIES WAS OR WERE RECEIVED IN ANY ONE OR MORE EARLIER PREVIOUS YEARS ALSO AND THE WHOLE OR ANY PART OF THE AMOUNT OF SUCH GRATUITY OR GRATUITIES WAS NOT INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE OF SUCH PREVIOUS YEAR OR YEARS, THE AMOUNT EXEMPT FROM INCOME - TAX UNDER THIS CLAUSE SHALL NOT EXCEED THE LIMIT SO SPECIFIED] AS REDUCED BY THE AMOUNT OR, AS THE CASE MAY BE, THE AGGREGATE AMOUNT NOT INCLUDED IN THE TOTAL INCOME OF ANY SUCH PREVIOUS YEAR OR YEARS. 10. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT T HE ASSESSEE CLAIMED THE EXEMPTION U/S 10(10)(I) OF THE ACT WHILE THE AO ALLOWED THE EXEMPTION U/S 10(10)(III) OF THE ACT. IN THE INSTANT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS EARLIER IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 13 EMPLOYEE OF THE HARYANA STATE GOVERNMENT AND WORKING IN HARYANA STATE ELECTRICITY BOARD WHICH LATER ON WAS BIFURCATED INTO 4 UTILITIES ONE OF WHICH WAS DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. AND THE ASSESSEE WAS EMPLOYEE OF THE SAID CORPORATION, WHICH ADOPTED THE HA RYANA CIVIL SERVICE (REVISED PENSION), PART - 1 RULES ISSUED BY THE HARYANA GOVERNMENT. THE HARYANA GOVERNMENT POWER DEPARTMENT IN ITS NOTIFICATION DATED 14.08.1998 PROVIDED THE CONDITIONS AT THE TI ME OF TRANSFER OF PERSONNEL IN C LAUSE 11 WHICH READ AS UNDER : THE TERMS AND CONDITIONS OF THE SERVICES APPLICABLE TO THEM ON THE EFFECTIVE DATE, THE PAY, PATTERN OF DEARNESS ALLOWANCES, ADDITIONAL DEARNESS ALLOWANCES, INTERIM RELIEF, CITY COMPENSATORY ALLOWANCES, HOUSE RENT ALLOWANCES, SHIFT DUTY ALLOWANCES, HARD SHIP ALLOWANCES, MEDICAL FACILITY, MEDICAL ALLOWANCES, ALL OTHER ALLOWANCES ON THE PROJECTS, FIELD AND HEAD OFFICE, LEAVE OF ALL KINDS (INCLUDING CASUAL LEA V E), PENSION AND DEATH - CUM - RETIREMENT BENEFIT, GRATUITY AND LEAVE ENCASHMENT OF EVERY NATURE SHALL N OT BE IN ANY WAY BE LESS FAVOURABLE TO THEM THAN THOSE APPLICABLE TO THEM IMMEDIATELY BEFORE SUCH DATE. 11. FROM THE ABOV E NOTIFICATION, IT IS CLEAR THAT THE EMPLOYEES WHO WERE TRANSFERRED IN THE POWER DEPARTMENT LIKE THE ASSESSEE WERE ELIGIBLE FOR ALL T HE BENEFITS WHICH WERE AVAILABLE BEFORE THEIR TRANSFER I.E. WHEN THEY WERE THE EMPLOYEE OF THE IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 14 STATE GOVERNMENT . A S PER THE PROVISIONS CONTAINED IN SECTION 10(10)(I) OF THE ACT, T HE EXEMPTION WAS AVAILABLE FOR DEATH - CUM - RETIREMENT GRATUITY TO THE EMPLOYEES OF THE STATE GOVERNMENT, THEREFORE, T HE ASSESSEE WAS ELIGIBLE FOR EXEMPTION U/S 10(10)(I) OF THE ACT AND NOT U/S 10(10)(III) OF THE ACT AS HAS BEEN HELD BY THE AO. IT IS ALSO NOTICED THAT THE DEPARTMENT ITSELF HAS ALLOWED THE EXEMPTION TO AN OTHER EMPLOYEE S ALSO ON THE BASIS OF THE NOTIFICATION ISSUED ON 01.07.1999 BY THE GOVERNMENT OF HARYANA IN WHICH IT HAS BEEN DECLARED THAT THE DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. IS A GOVERNMENT COMPANY AND THERE IS NO EXISTENCE OF PUBLIC FUND AND THE EMPLOYEES OF T HE WREST WHILE HSEB WERE VERY MUCH COVERED UNDER GPF SCHEME WHICH APPLIES ONLY TO THE GOVERNMENT EMPLOYEES. MOREOVER, THE DHBVN ALSO ADOPTED THE HARYANA CIVIL SERVICE (REVISED PENSION), PART - 1, RULES, 2009 WHICH SHALL APPLY TO ALL PENSIONERS ENTITLED AS ON 01.01.2006 UNDER PCS RULES, 1953. ONE OF SUCH ORDER DATED 18.05.2012 U/S 147/143(3) OF THE AC T FOR THE ASSESSMENT YEAR 2010 - 11 IN THE CASE OF SH. JAI DAYAL SINGH BAMEL, 488, SECTOR - 7, FARIDABAD WAS FURNISHED BY THE LD. COUNSEL OF THE ASSESSEE WHICH IS PLA CED ON RECORD . THEREFORE, WHEN THE DEPARTMENT ITSELF HAD ALLOWED THE EXEMPTION ON ACCOUNT OF GRATUITY TO THE EMPLOYEES OF THE SAME CATEGORY TO WHICH THE ASSESSEE BELONGS THEN THERE IT A NOS. 1574 TO 1577, 1580 & 1581 /DEL /2016 JAGDEEP, B.S. BOORA, K.S. PANNU, BHUPINDER, KAPOOR, RAMKRISHAN 15 WAS NO REASON TO DENY THE BENEFIT TO THE ASSESSEE, IN VIEW OF THE PRINCIPLE OF THE CONSISTENCY. I, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS DELETE THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A). 12. THE FACTS OF THE ANOTHER CASES IN ITA NOS. 1574, 1576, 1577, 1580 & 1581/DEL/2016 ARE SIMILAR TO THE FACTS INV OLVED IN ITA NO. 1575/DEL/2016 (SUPRA). THEREFORE, THE FINDINGS GIVEN IN FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS TO ALL THESE APPEALS. 13 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE S ARE ALLOWED . ( ORDER PRON OUNCED IN THE COURT ON 27 /05/2 016 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DATED: 27 /05/2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(AP PEALS) 5. DR: ITAT ASSISTANT REGISTRAR
