Shri Gopalkrishna Haribhai Dave, Kheda V. The Income Tax Officer, Ward-2, Nadiad

ITA 1809/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0321 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Revised return
• Section: 143(3); 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA.NO.1809/AHD/2013 / ASSTT. YEAR: 2007-2008 GOPALKRISHNA HARIBHAI DAVE 11, RATNAGIRI SOCIETY NANA RATNAKAR MATA ROAD KAPADWANJ. VS ITO, WARD-2 NADIAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI SUNIL TALATI, AR REVENUE BY : SHRI JAMES KURIAN, SR.DR / DATE OF HEARING : 30/09/2016 / DATE OF PRONOUNCEMENT: 07/10/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE LD.C IT(A)-IV, BARODA DATED 12.3.2013 FOR THE ASTT.YEAR 2007-08. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ORDER OF THE AO DATED 10.6.2011 PASSED UNDER SECTIO N 154 OF THE INCOME TAX ACT, 1961 VIDE WHICH THE LD.AO HAS REJECTED THE CLA IM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 10(10C) OF THE AMOUNTS RECE IVED UNDER VRS SCHEME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS ORIGINAL RETURN OF INCOME FOR THE ASSTT.YEAR 2007-08 ON 25.7.2007 D ECLARING TOTAL INCOME AT ITA NO.1809/AHD/2013 2 RS.2,01,940/-. THE ASSESSEE HAS ATTACHED A NOTE WI TH COMPUTATION OF INCOME DEMONSTRATING THAT A SUM OF RS.5 LAKHS WAS SHOWN AS EXEMPT INCOME UNDER VRS SCHEME. THE ASSESSEE HAD, THEREFORE, CLAIMED R EFUND OF RS.1,99,660/-. SUBSEQUENTLY, THE ASSESSEE HAS REVISED THIS RETURN ON 28.3.2008. HE OFFERED A SUM OF RS.5 LAKHS FOR TAXATION. THE REFUND WORKED OUT BY THE ASSESSEE WAS AT RS.51,564/-. THIS RETURN WAS PROCESSED UNDER SECTI ON 143(3) OF THE ACT ON 17.4.2008. THE ASSESSEE, THEREAFTER, MOVED AN APPL ICATION ON 17.2.2011. HE PRAYED THAT A SUM OF RS.5.00 LAKHS RECEIVED BY HIM UNDER VRS SCHEME WOULD BE EXEMPT UNDER SECTION 10(10C) OF THE INCOME TAX A CT. THIS APPLICATION OF THE ASSESSEE WAS REJECTED BY THE AO VIDE ORDER DATE D 10.6.2011. 4. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. THE LD.CIT(A) HAS OBSERVED THAT THERE IS NO APPARENT ER ROR IN THE ORDER OF THE AO. THE ASSESSEE HIMSELF HAS REVISED RETURN, AND HE HIM SELF HAS OFFERED A SUM OF RS.5.00 LAKHS FOR TAXATION. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT WHEN THE ASSESSEE H AS REVISED THE RETURN ON 28.3.2008, THERE WAS A FLUID SITUATION ABOUT TAXABI LITY OR NON-TAXABILITY OF SUCH VRS COMPENSATION. UNDER THIS DILEMMA, THE ASS ESSEE HAS FILED REVISED RETURN. WHEN THE ASSESSEE HAS FILED APPLICATION FO R RECTIFICATION OF THIS MISTAKE, BY THAT TIME, CBDT HAS ISSUED A CIRCULAR N O.F.NO.173(1)/32. IT WAS ISSUED ON 8.5.2009. VIDE THIS CIRCULAR, BOARD HAS ADVISED THAT IT HAS ACCEPTED DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. KOODATHIL KALLYATAN AMBUJAKSHAN, (2008) 219 CTR (BOM) 80 AND OBSERVED THAT EMPLOYEES OF RESERVE BANK OF INDIA AND OTHERS WHO H AVE OPTED FOR VRS WILL BE ENTITLED FOR DEDUCTION UNDER SECTION 10(10C) OF THE INCOME TAX ACT, 1961. AFTER THIS CIRCULAR, THE AO OUGHT TO HAVE RECTIFIED HIS ORDER PASSED UNDER SECTION 143(1) OF THE ACT. THE HONBLE GUJARAT HIG H COURT IN THE CASE OF ITA NO.1809/AHD/2013 3 S.R.KOSHTI VS. CIT, 276 ITR 165 HAS CONSIDERED ALMO ST SIMILAR SITUATION. THE HONBLE COURT HAS OBSERVED THAT AUTHORITIES UND ER THE INCOME TAX ACT ARE UNDER OBLIGATION TO ACT IN ACCORDANCE WITH LAW. TAX CAN BE COLLECTED ONLY AS PROVIDED UNDER THE ACT. IF AN ASSESSEE, UNDER A MISTAKE, MISCONCEPTION OR ON NOT BEING PROPERLY INSTRUCTED, IS OVER-ASSESSED, AUTHORITIES UNDER THE ACT ARE REQUIRED TO ASSIST AND ENSURE THAT ONLY LEGITIM ATE TAX DUES ARE COLLECTED. IN THIS CASE ALSO, THE ASSESSEE IS WORKING AS ASSISTAN T MANAGER WITH INDUSTRIAL FINANCIAL CORPORATION OF INDIA LTD. HE TOOK VRS AN D RECEIVED A COMPENSATION OF RS.7.50 LAKHS OF WHICH EMPLOYER HAS DEDUCTED TDS AND DID NOT INFORM ASSESSEE REGARDING EXEMPTION FROM THE TA X THAT PETITIONER WOULD BE ENTITLED, AND ACCORDINGLY, THE ASSESSEE HAS OFFERED THAT FOR TAXATION. THE ASSESSEE, THEREAFTER, FILED AN APPLICATION UNDER SE CTION 154, WHICH WAS ACCEPTED BY THE AO, BUT LD.COMMISSIONER SOUGHT TO R EVISE THAT ORDER OF THE AO. THE HONBLE COURT HAS ALLOWED WRIT PETITION OF THE ASSESSEE AND IMPOSED COST OF RS.5,000/- ON THE LD.COMMISSIONER. IT DIRECTED THE REVENUE TO RECOVER THE COST FROM THE COMMISSIONER. HAD THE REVENUE AUTHORITIES HAVE EXAMINED THE FACTS OF THE PRESENT CASES, IN THE LIG HT OF THE HONBLE GUJARAT HIGH COURTS DECISION, AS WELL AS IN THE LIGHT OF C BDT CIRCULAR, THEN, PROBABLY, THE APPLICATION FOR RECTIFICATION WOULD H AVE BEEN ALLOWED. ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASSESSEE, A ND DIRECT THE AO TO GRANT EXEMPTION OF RS.5.00 LAKHS UNDER SECTION 10(10C) OF THE INCOME TAX ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 7 TH OCTOBER, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 07/10/2016