Shri Subhas Chanda Ghosh, Howrah V. ACIT, Circle - 25, Kolkata, Kolkata

ITA 1624/KOL/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3188 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 28-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMITABHA RO Y SR DR PER
• Assessee Lawyers: D CHATTERJEE
• Keywords: Rectification of order; Principle of natural justice; Benefit of exemption
• Section: 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI N.S.SAINI, A.M. & SHRI MAHAVIR SINGH, J.M. ] I.T.A. NO.1624/KOL/2011 : ASSESSMENT YEAR : 2004-05 SRI SUBASH CHANDRA GHOSH, HOWRAH -VS- ACIT, CIRCLE-25, KOLKATA PAN : AHIPG 8968J ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 12.06.2013 DATE OF PRONOUNCING THE ORDER : 21.06.2013 APPEARANCES : FOR THE APPELLANT : SHRI D. CHATTERJEE, ADVOCATE : FOR THE RESPONDENT : SHRI AMITABHA RO Y, SR.DR O R D E R PER SHRI N.S.SAINI, A.M. : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-XIV, KOLKATA DATED THE 20 TH SEPTEMBER, 2011 FOR THE ASSESSMENT YEAR 2004-05 BY TAKING THE FOLLOWING GROUNDS OF APPEAL. THAT THE LD. A.O. & THE LD.C.I.T.(A) ARE ERRED IN L AW AS WELL AS TO CONSIDER THE FACTS OF THE CASE ALSO. THAT THE LD. A.O. AS WELL AS THE LD. C.I.T.(A) ARE NOT JUSTIFIED TO DENY THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT AND FAILED TO UNDERSTAND THE SPIRIT OF LAW TO PASS THE ORDER U/S 154 AND U/S 250 OF THE ACT. THAT THE LD. A.O. AS WELL AS THE LD. C.I.T.(A) ARE NOT JUSTIFIED TO ACT WITH THE VINDICTIC VIEW AND ARBITRARY MANNER GOING BEYOND T HE FACTS AND THE LAW OF THE LAND. THAT THE LD. A.O. AND THE LD. C.I.T.(A) FAILED TO CONSIDER THE FACTS AND TO MAINTAIN THE NATURAL JUSTICE AS PROVIDED IN LAW U/ S 10(10C) OF THE ACT. 2. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN T HE INSTANT CASE, THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.1 5,58,923/-, WHICH WAS 2 I.T.A. NO.1624/KOL/2011 SRI SUBASH CHANDRA GHOSH A.Y.2 004-05 PROCESSED UNDER SECTION 143(1) ON 07.12.2004. IN TH E SAID RETURN OF INCOME, THE ASSESSEE HAS NOT CLAIMED DEDUCTION UNDER SECTION 10 (10C) OF THE ACT. THEREAFTER, THE ASSESSEE FILED PETITION FOR RECTIFICATION FOR A LLOWING DEDUCTION UNDER SECTION 10(10C) OF THE ACT, WHICH WAS REJECTED BY THE AO VI DE ITS ORDER DATED 21.06.2010. THE PETITION WAS REJECTED ON THE GROUND THAT DEDUCT ION UNDER SECTION 10(10C) WAS NOT CLAIMED IN THE RETURN OF INCOME AND THEREFORE, THERE WAS NO MISTAKE. 3. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE POINTE D OUT THAT RECTIFICATION PETITION WAS ORIGINALLY FILED ON 04.07.2007, WHICH WAS EVIDENCED BY THE ACKNOWLEDGEMENT COPY OF THE PETITION AND THEREAFTER THE ASSESSEE FILED REMINDERS ON 07.07.2008 AND 23.11.2009. THE A.O. WAS NOT JUST IFIED IN REFUSING THE RECTIFICATION PETITION AS BEING FILED ON 04.12.2009 AND THEREFORE, THE ORDER DATED 21.06.2010 REJECTING THE RECTIFICATION PETITION, AF TER EXPIRY OF SIX MONTHS OF THE RECTIFICATION PETITION WAS INVALID. THE ASSESSEE FU RTHER POINTED OUT THAT IN VIEW OF THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COU RT IN THE CASE OF CIT-VS- K.N.OIL INDUSTRIES (1983) 142 ITR 13 (M.P.) AND THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ANCHOR PROCESSING (P) LTD. VS- CIT (1986) 161 ITR 159 (SC), THE RECTIFICATION PETITION DESERVES TO BE ALLOWED. 4. THE CIT(A) HELD THAT THE AO HAS GIVEN SHOW-CAUSE NOTICE DATED 08.12.2009 IN WHICH IT IS CLEARLY MENTIONED THAT THE RECTIFICA TION APPLICATION DATED 04.12.2009 WAS FILED. THE AO PASSED THE RECTIFICATION ORDER ON 21.06.2010, WHICH IS WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE A PPLICATION WAS FILED BEFORE THE AO. HENCE, THE RECTIFICATION ORDER WAS PASSED WITHI N SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS MADE. 5. WE FIND THAT THE LD. CIT(A) HAS NOT STATED ANYTH ING ABOUT THE CLAIM OF THE ASSESSEE THAT THE ORIGINAL RECTIFICATION PETITION D ATED 04.07.2007 WAS FILED BY THE ASSESSEE ON 05.07.2007. THE ASSESSEE FILED BEFORE U S AT PAGE NO.12 OF THE PAPER BOOK COPY OF THE PETITION DATED 04.07.2007 WHICH BE ARS THE SEAL OF THE DEPARTMENT AND EVIDENCES THE SAME WAS RECEIVED BY THE DEPARTME NT ON 05.07.2007. THUS, WE 3 I.T.A. NO.1624/KOL/2011 SRI SUBASH CHANDRA GHOSH A.Y.2 004-05 FIND THAT THE LD. CIT(A) HAS REJECTED THE CLAIM OF THE ASSESSEE WITHOUT PASSING A SPEAKING ORDER ON THE CONTENTION OF THE ASSESSEE TH AT THE ORIGINAL RECTIFICATION PETITION WAS FILED ON 05.07.2007. WE FURTHER FIND T HAT THE LD. CIT(A), AFTER EXAMINING THE DECISION IN THE CASE OF ANCHOR PROCES SING PVT. LTD. ( SUPRA ), HAS CONCLUDED THAT IN THE INSTANT CASE, THERE IS NO PR ECISE FACTUAL MATERIAL AND CLEAR DATA CONTAINED IN THE RECORD SUFFICIENT TO ENABLE T HE INCOME TAX OFFICER TO CONSIDER WHETHER THE CONDITIONS REQUIRED FOR GRANT OF RELIEF UNDER SECTION 10(10C) WERE SATISFIED. IN ABSENCE OF SUCH MATERIAL COUPLED WITH THE FACT THAT NO RELIEF WAS CLAIMED IN THE RETURN OF INCOME, I HOLD THAT THERE IS NO MISTAKE APPARENT FROM RECORD, FOLLOWING THE DECISION OF THE HONBLE SUPRE ME COURT IN THE CASE OF ANCHOR PROCESSING (PVT. LTD.) VS- C.I.T. (1986) 161 I.T.R . 159 (S.C.). 6. WE FIND THAT THE LD. CIT(A) HAS BROUGHT NO MATER IALS ON THE RECORD ON THE BASIS OF WHICH IT WAS CONCLUDED BY HIM THAT IN THE INSTANT CASE THERE IS NO PRECISE FACTUAL MATERIAL AND CLEAR DATA CONTAINED IN THE RE CORD SUFFICIENT TO ENABLE THE INCOME TAX OFFICER TO CONSIDER WHETHER THE CONDITIO NS REQUIRED FOR GRANT OF RELIEF UNDER SECTION 10(10C) WERE SATISFIED. 7. ON THE OTHER HAND, WE FIND THAT THE ASSESSEE HAS PLACED AT PAGE NOS. 1 TO 6 OF THE PAPER BOOK, WHICH CONTAINS THE COPIES OF IT RET URN SARAL FORM FILED BY THE ASSESSEE ALONG WITH THE COMPUTATION OF INCOME, CALC ULATION OF RELIEF UNDER SECTION 89(1). WE FIND THAT NOTE ON THE COMPUTATION SHEET O F TAXABLE INCOME APPENDED BY THE ASSESSEE READS AS UNDER: NOTE: THE ASSESSEE OPTED FOR EARLY RETIREMENT OPTION FRO M ICICI BANK DURING THE AY 2004-2005. AS ICICI BANK (THE EMPLOY ER) DID NOT ALLOW RELIEF U/S 10(10)C, THE RELIEF U/S 89(1) HAS BEEN CLAIMED FOR COMPENSATION ON TERMINATION OF EMPLOYMENT AS P ER ANNEXURE III OF FORM 10E ATTACHED WITH THIS RETURN. FURTHER, THE CALCULATION SHEET OF RELIEF UNDER SECT ION 89(1) ALSO SHOWS THAT THE ASSESSEE RECEIVED RS.12,78,886/- FROM ICICI BANK UN DER EARLY RETIREMENT OPTION SCHEME 2003 FOR TAKING VOLUNTARY RETIREMENT. WE FUR THER FIND THAT THE DECISION OF 4 I.T.A. NO.1624/KOL/2011 SRI SUBASH CHANDRA GHOSH A.Y.2 004-05 THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF ICIC I BANK EX-EMPLOYEES WELFARE ASSOCIATION VS- UNION OF INDIA AND OTHERS DATED 18 .05.2005 PASSED IN W.P. NO.693 OF 2004 WAS FILED BEFORE THE LD. CIT(A) BY T HE ASSESSEE, WHICH WAS NOT CONSIDERED BY HIM AT THE TIME OF ADJUDICATION OF TH E APPEAL. THE HONBLE CALCUTTA HIGH COURT IN THE AFORESAID CASE HAS HELD AS UNDER: I FULLY AGREE WITH COUNSEL FOR THE REVENUE THAT THE BENEFITS RECEIVED BY THE MEMBERS OF THE ASSOCIATION IN TERMS OF THE SCHEME WERE TAXABLE; AND THAT THE MEMBERS WERE ENTITLED TO EXEMPTION ONLY UPTO T HE AMOUNT MENTIONED IN S.10(10C) OF THE INCOME-TAX ACT, 1961. I AM OF THE VIEW THAT THE BENEFITS RECEIVED BY THE MEMBERS OF THE ASSOCIATION WOULD D EFINITELY BE TREATED AS INCOME, SINCE THERE IS NO DISPUTE THAT THE BENEFIT S WERE RECEIVED CONSEQUENT UPON VOLUNTARY RETIREMENT, AND IN TERMS OF THE SCH EME FRAMED AND FLOATED BY THE RESPONDENT-BANK. A CONTRARY INTERPRETATION, IN MY VIEW, WOULD BE ABSOLUTELY AGAINST THE EXPRESS PROVISION OF S.10 O F THE INCOME-TAX ACT, 1961. THE WORD SALARY HAS BEEN GIVEN A WIDE MEANING AS WOULD APPEAR FROM THE PROVISION OF S.15 OF THE ACT. IT SEEMS TO ME T HAT COUNSEL FOR THE REVENUE IS FULLY JUSTIFIED IN MAKING THE SUBMISSION THAT I N VIEW OF OBSERVATIONS AND FINDINGS OF THE DIVISION BENCH IN THE CASE CITED T O ME, QUESTIONS RAISED BY THE PETITIONERS IN THIS CASE HAVE NO MERIT WORTH CONSI DERATION. COUNSEL FOR THE PETITIONERS HAS THEN ARGUED THAT IF THE AMOUNT RECEIVED BY A MEMBER OF THE ASSOCIATION IS TREATED AS INCOME, THEN HE WOULD BE ENTITLED TO BENEFIT OF S.10(10C) OF THE ACT, WI TH RESPECT TO EXEMPTION. THERE IS NO DISPUTE REGARDING THIS RIGHT OF THE ME MBERS OF THE ASSOCIATION. COUNSEL POINTS OUT THAT THE RESPONDENT-BANK INDISC RIMINATELY DEDUCTED TAX AT SOURCE, AND AS A RESULT, EVEN PERSONS WERE ENTI TLED TO GET BENEFIT OF EXEMPTION WERE NOT GIVEN THE BENEFIT. IT SEEMS TO ME THAT THE CONTENTION IS SPECULATIVE IN NATURE, THOUGH I MUST SAY THAT I ACKNOWLEDGE ITS FORCE. HENCE IT SE EMS TO ME THAT PROPER REMEDY FOR THE MEMBERS OF THE ASSOCIATION WOULD BE TO APPROACH THE RESPONDENT-BANK AND THE REVENUE, IF THE RESPONDENT -BANK DEDUCTED ANY AMOUNT OF TAX FROM THE BENEFITS OF ANY MEMBER OF T HE ASSOCIATION, THOUGH IN VIEW OF PROVISION OF S.10(10C) OF THE ACT, TAX WAS NOT TO BE PAID BY SUCH MEMBER. FOR THESE REASONS WHILE I DISMISS THE WRIT PETITI ON ON MERITS, I GIVE LIBERTY TO THE MEMBERS OF THE ASSOCIATION TO APPRO ACH THE RESPONDENT-BANK AND THE REVENUE FOR SEEKING REFUND OF ANY AMOUNT T HAT WAS PAID IN EXCESS OF THE LEGAL LIABILITY OF ANY MEMBER OF THE ASSOCIATI ON. 5 I.T.A. NO.1624/KOL/2011 SRI SUBASH CHANDRA GHOSH A.Y.2 004-05 IT IS MADE CLEAR THAT IF APPROPRIATE APPROACH IS MADE BY ANY MEMBER OF THE ASSOCIATION AND IT IS FOUND THAT SUCH MEMBE R IS ENTITLED TO GET REFUND OF ANY AMOUNT, THEN THE COMPETENT TAX AUTHORITY SH ALL TAKE IMMEDIATE STEPS FOR DETERMINING THE REFUNDABLE AMOUNT AND HE SHALL REFUND IT WITHOUT ANY UNREASONABLE DELAY WHATSOEVER. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM NOT INCLINED TO MAKE ANY ORDER FOR COSTS IN THE WRIT PETITION. HENCE TH ERE WOULD BE NO ORDER FOR COSTS IN IT. ALL PARTIES CONCERNED ARE TO ACT ON THE SIGNED XE ROX COPY OF THIS DICTATED ORDER ON THE USUAL UNDERTAKINGS. 8. IN THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND TH AT IN THE RETURN OF INCOME FILED BY THE ASSESSEE, THERE WAS MATERIAL TO SHOW T HAT THE ASSESSEE RECEIVED RS. 12,78,886/- FROM ICICI BANK UNDER EARLY RETIREMENT OPTION SCHEME 2003 FOR TAKING VOLUNTARY RETIREMENT. FURTHER WE FIND THAT T HE ASSESSEE FILED THE ORIGINAL RECTIFICATION PETITION ON 04.07.2007 CLAIMING EXEMP TION UNDER SECTION 10(10C) OF THE ACT. 9. IN VIEW OF THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF ICICI BANK EX-EMPLOYEES WELFARE ASSOCIATION ( SUPRA ), IN OUR CONSIDERED OPINION, THE CLAIM OF THE ASSESSEE MERITS TO BE ALL OWED. WE FIND THAT THE CBDT VIDE ITS CIRCULAR NO.14(XI-35) OF 1955 DATED 11.04. 1955 OPINED THAT THE OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF THE IGNOR ANCE OF AN ASSESSEE AS TO HIS RIGHTS AND THAT ALTHOUGH THE RESPONSIBILITY FOR CLA IMING REFUNDS AND RELIEFS RESTS WITH THE ASSESSEE ON WHOM IT IS IMPOSED BY LAW, YET (A) THE OFFICERS SHOULD DRAW THE ATTENTION OF THE ASSESSEES TO ANY REFUNDS OR RE LIEFS TO WHICH THEY ARE ENTITLED BUT WHICH THEY HAVE OMITTED TO CLAIM FOR SOME REASON OR OTHER, AND (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS TO THEIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPTED FOR CLAIMING REFUNDS AND RE LIEFS. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF S.R. KOSHTI VS- CIT (200 5) 276 ITR 165 (GUJ.) HAS HELD AS UNDER: THE AUTHORITIES UNDER THE INCOME-TAX ACT, 1961 ARE UNDER AN OBLIGATION TO ACT IN ACCORDANCE WITH LAW. TAX CAN BE COLLECTED O NLY AS PROVIDED UNDER THE 6 I.T.A. NO.1624/KOL/2011 SRI SUBASH CHANDRA GHOSH A.Y.2 004-05 ACT. IF AN ASSESSEE, UNDER A MISTAKE, MISCONCEPTIO N OR ON NOT BEING PROPERLY INSTRUCTED IS OVER-ASSESSED, THE AUTHORITIES UNDER THE ACT ARE REQUIRED TO ASSIST HIM AND ENSURE THAT ONLY LEGITIMATE TAXES D UE ARE COLLECTED. ONCE AN ASSESSEE IS IN A POSITION TO SHOW THAT HE HAS BEEN OVER- ASSESSED UNDER THE PROVISIONS OF THE ACT, REGARDLE SS OF WHETHER THE OVER- ASSESSMENT IS AS A RESULT OF THE ASSESSEES OWN MI STAKE OR OTHERWISE, THE COMMISSIONER HAS THE POWER TO CORRECT SUCH AN ASSE SSMENT UNDER SECTION 264(1) OF THE INCOME-TAX ACT, 1961. IF THE COMMISS IONER REFUSED TO GIVE RELIEF TO THE ASSESSEE, HE WOULD BE ACTING DE HORS THE POWERS UNDER THE ACT. 10. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDERS O F THE LOWER AUTHORITIES AND DIRECT THE A.O. TO ALLOW RELIEF TO THE ASSESSEE UND ER SECTION 10(10C) OF THE ACT, IN ACCORDANCE WITH LAW. 11. BE IT ALSO STATED THAT NECESSARY MODIFICATION, AS PER LAW, IN THE RELIEF ALREADY ALLOWED UNDER SECTION 89(1) SHALL BE MADE BY THE AO . THEREFORE, THE GROUNDS OF APPEAL IN THE APPEAL OF THE ASSESSEE ARE ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN THE COURT ON 21 ST JUNE, 2013. SD/- SD/- (MAHAVIR SINGH) (N. S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED : 21 ST JUNE, 2013 COPY OF THE ORDER FORWARDED TO: 1. SRI SUBASH CHANDRA GHOSH, 62/4/1, SWAMI VIVEKANANDA ROAD, HOWRAH- 711 104 2. ACIT, CIRCLE-25, KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.) 7 I.T.A. NO.1624/KOL/2011 SRI SUBASH CHANDRA GHOSH A.Y.2 004-05