Shri Natvarlal Shantilal Shah, Anand V. The Income Tax Officer, Ward 4, Anand

ITA 1981/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94754 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N C AMIN
• Keywords: Revised return
• Section: 154; 2

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ ITA NO.1981/AHD/2013 / ASSTT. YEAR: 2007-2008 SHRI NATVARLAL SHANTILAL SHAH 10, JAGDAMBA PARK SOCIETY NR.AKSHAR FARM GOPI-VIDHYA NAGAR ROAD ANAND-388 001. PAN : AJHPS 7814 A VS ITO, WARD - 4 ANAND. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI N.C. AMIN REVENUE BY : SHRI SOMOGYAN PAL, SR.DR / DATE OF HEARING : 28/09/2015 / DATE OF PRONOUNCEMENT: 01/12/2015 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF THE LD.CIT(A)-IV, BARODA DATED 03.5.2013 FOR THE ASSTT. YEAR 2007-08. 2. THE ASSESSEE HAS TAKEN NINE GROUNDS OF APPEAL, W HICH ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPEL LATE TRIBUNAL) RULES, 1963 - THEY ARE DESCRIPTIVE AND ARGUMENTATIV E IN NATURE. IN BRIEF, THE GRIEVANCE OF THE ASSESSEE IS THAT AN AMO UNT OF RS.2,79,305/- RECEIVED BY HIM AS AN EX-GRATIA PAYMENTS FROM STATE BANK OF INDIA UNDER BANKS EXIST OPTION SCHEME OUGHT TO BE EXCLUD ED FROM THE TAXABLE INCOME OF THE ASSESSEE AND APPLICATION OF T HE ASSESSEE MOVED ITA NO.1981/AHD/2013 2 UNDER SECTION 154 OF THE INCOME TAX ACT FOR RECTIFI CATION SHOULD HAVE BEEN ALLOWED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TO OK VOLUNTARY RETIREMENT FROM THE STATE BANK OF INDIA, ANAND ON 3 1.7.2006 UNDER BANKS EXIST OPTION SCHEME. THE BANK HAS PAID PF, GRATUITY, LEAVE ENCASHMENT, PENSION COMMUTATION AND EX-GRATIA AMOUN T OF RS.2,79,305/- ON THE RETIREMENT. THE BANK HAS IS SUED FORM NO.16 AND DEDUCTED TAX ON THE EX-GRATIA PAYMENT OF RS.2,7 9,305/-. THE ASSESSEE HAS FIELD ITS RETURN OF INCOME ON 31.7.200 7 DECLARING TOTAL INCOME AT RS.4,37,344/-. THIS RETURN WAS PROCESSED UNDER SECTION 143(1) AND INTIMATION WAS SENT TO THE ASSESSEE ON 2 5.3.2008, VIDE WHICH REFUND OF RS.7,080/- WAS GRANTED TO THE ASSES SEE. MINISTRY OF FINANCE HAD ISSUED A CIRCULAR BEARING NO.F.NO.173(1 )/32/2009-ITA-1 DATED 8.5.2009. AS PER THIS CIRCULAR, THE ASSESSEE S WHO HAVE AVAILED THE BENEFIT OF BANKS EXIST OPTION SCHEME FROM THE SERVICE AND HAD RECEIVED AN EX-GRATIA PAYMENT, THEN UPTO THE RECEIP T OF RS.5 LAKHS WILL BE EXEMPT FROM TAX UNDER SECTION 10(10C) OF THE INC OME TAX ACT. THE BOARD HAS CLARIFIED POSITION ABOUT THIS ASPECT AND APPRAISED TO ITS OFFICERS TO EXCLUDE THIS AMOUNT FROM TAXABLE INCOME . THE ASSESSEE HAS INCLUDED EX-GRATIA PAYMENT IN HIS TAXABLE INCOME. AFTER THE CIRCULAR HE MOVED AN APPLICATION FOR RECTIFICATION. THIS APPLI CATION WAS MOVED ON 14.6.2010 WHICH ACCORDING TO THE ASSESSEE RECEIVED BY THE ITO, WARD- 4, ANAND ON 23.6.2010. THE ASSESSEE HAS ASKED REFU ND OF RS.69,813/-. THE LD.AO DID NOT TAKE ACTION ON THIS APPLICATION, THEREAFTER, THE ASSESSEE MOVED MORE APPLICATION AS WELL AS WRITTEN LETTER TO THE AO. ULTIMATELY, THE AO HAS OBSERVED THAT THE APPLICATIO N DATED 25.5.2012 WAS RECEIVED IN HIS OFFICE. HE DISMISSED THE APPLI CATION OF THE ASSESSEE BEING TIME BARRED. 4. ON APPEAL, THE LD.CIT(A) AS ALSO CONFIRMED THE A CTION OF THE AO. ITA NO.1981/AHD/2013 3 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTE NDED THAT A SPECIFIC PLEA WAS RAISED BY THE ASSESSEE THAT THE A PPLICATION WAS MOVED ON 14.6.2010. ITS PLEADING WAS NOTED BY THE CIT(A) BUT NO FINDING HAS BEEN RECORDED BY THE CIT(A). SUBMISSIONS MADE BY TH E ASSESSEE WHICH HAS BEEN REPRODUCED BY THE CIT(A) AT PAGE NO.5 OF T HE IMPUGNED ORDER READ AS UNDER: THE GOVERNMENT OF INDIA, MINISTRY OF FINANCE HAS I SSUED ORDER BEARING NO. F.NO. 173(L)/32/2009-ITA-L DATED 8.5.2009. THEREAFT ER I HAVE FILED AN APPLICATION DATED 14.06.10 WHICH WAS RECEIVED BY ITO WARD 4, ANAND ON 23.6.10 (COPY ENCLOSED) FOR GRANTING ME REFUND OF R S.69,813/- NO ACTION HAS BEEN TAKEN BY LEARNED A.O. EVEN THOUGH I HAVE F ILED VARIOUS PAPERS AS MENTIONED IN THE SAID APPLICATION. THEREAFTER REMIN DER LETTER DATED NIL: FILED ON 15.11.10. HOWEVER, NEITHER I RECEIVED ANY REPLY NOR PASSED ANY ORDER BY ITO WARD 4 ANAND AND THE SAID APPLICATION IS PEN DING AS ON TODAY. 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE LD. CIT(A) HAS DISMISSED THE APPLICATION OF THE ASSESSEE FOR TWO REASONS. F IRSTLY, THE APPLICATION HAS BEEN DISMISSED ON MERIT ON THE GROUND THAT THE ASSESSEE HAS INCLUDED THE EX-GRATIA PAYMENTS IN HIS RETURN OF IN COME, AND THEREFORE, NO APPARENT ERROR HAS BEEN COMMITTED BY THE ASSESSE E. THE LD.FIRST APPELLATE AUTHORITY HAS ALSO OBSERVED THAT THE ASSE SSEE DID NOT FILE RETURN WITHIN THE TIME. IN THE SECOND REASONING, T HE LD.CIT(A) HAS OBSERVED THAT THE APPLICATION MOVED BY THE ASSESSEE IS BARRED BY LIMITATION. AS PER SECTION 154(7) OF THE ACT, THE TIME LIMIT FOR FILING OF SUCH APPLICATION IS OF FOUR YEARS AND THE APPLICATI ON FILED BY THE ASSESSEE IS AFTER FOUR YEARS. ON DUE CONSIDERATIO N FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE LD.FIRST APPELLATE AUTHORITY HAS NOT TAKEN COGNIZANCE OF THE APPLICATI ON ALLEGED TO HAVE BEEN FILED ON 14.6.2010. HE HAS NOT MADE REFERENCE TO THE SUBMISSION MADE BY THE ASSESSEE ALLEGING THE FILING OF THE APP LICATION ON 14.6.2010. THE LD.FIRST APPELLATE AUTHORITY OUGHT TO HAVE ASCERTAINED THE FACTS ABOUT THIS, AND ONLY THEREAFTER DECIDE TH E CASE OF THE ASSESSEE. APART FROM THE ABOVE, WE WOULD LIKE TO M AKE REFERENCE TO ITA NO.1981/AHD/2013 4 THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN T HE CASE OF S.R. KOSHTI VS. CIT, 276 ITR 165. THE HONBLE COURT WAS EXAMIN ING THE SCOPE OF POWER OF THE LD.COMMISSIONER UNDER SECTION 264 OF T HE INCOME TAX. THE FOLLOWING OBSERVATIONS IN THIS REGARD WORTH TO NOTE: THE POSITION IS, THEREFORE, THAT, REGARDLESS OF WH ETHER THE REVISED RETURN WAS FILED OR NOT, ONCE AN ASSESSEE IS IN A P OSITION TO SHOW; THAT THE ASSESSEE HAS BEEN OVER-ASSESSED UNDER THE PROVISIONS OF THE ACT, REGARDLESS OF WHETHER THE OVER-ASSESSMENT IS AS A RESULT OF THE ASSESSEE'S OWN MISTAKE OR OTHERWISE, THE COMMIS SIONER HAS THE POWER TO CORRECT SUCH AN ASSESSMENT UNDER SECTION 2 64(1) OF THE ACT. IF THE COMMISSIONER REFUSES TO GIVE RELIEF TO THE ASSESSEE, IN SUCH CIRCUMSTANCES, HE WOULD BE ACTING DE HORS THE POWERS UNDER THE ACT AND THE PROVISIONS OF THE ACT AND, THEREFOR E, IS DUTY-BOUND TO GIVE RELIEF TO AN ASSESSEE, WHERE DUE, IN ACCORD ANCE WITH THE PROVISIONS OF THE ACT. 7. THE ASSESSEE IS A RETIRED EMPLOYEE. THE BANK HA S DEDUCTED TDS ON EX-GRAIA PAYMENTS WHICH IS OTHERWISE EXEMPT FROM TAX UNDER SECTION 10(10C) OF THE ACT. WHEN THE ASSESSEE HAS FILED RE TURN, THE DEPARTMENT WAS DENYING THE EXEMPTION UNDER SECTION 10(10C) OF THE ACT ON THIS EX- GRATIA PAYMENT. AFTER THE DECISION OF THE HONBLE BOMBAY HIGH COURT, THE BOARD HAS ACCEPTED THE POSITION OF LAW AND ISSU ED A CIRCULAR CLARIFYING THE POSITION THAT EXEMPTION UNDER SECTIO N 10(10C) WILL BE ADMISSIBLE TO THE ASSESSEE. THUS, WHEN THE ASSESSE E HAS FILED RETURN THE SITUATION WAS NOT CLEAR. THE STAND OF THE REVE NUE WAS THAT IT IS A TAXABLE INCOME. ONCE THE BOARD HAS ISSUED CIRCULAR EXCLUDING THE AMOUNT FROM TAXABLE NET, THEN IT WOULD RESULT THAT THE ASSESSEE HAS BEEN OVER ASSESSED. HE HAS NOT BEEN ASSESSED BECAU SE OF HIS MISTAKE, BUT BECAUSE OF CONTRADICTORY STAND TAKEN BY THE REV ENUE QUA A PARTICULAR FACT SITUATION. IN OUR OPINION, THE LD. CIT(A) OUGHT TO HAVE LOOKED INTO THIS ASPECT BEFORE DECIDING THE APPEAL OF THE ASSESSEE. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE LD.CIT(A) FOR RE-ADJUDICATION. THE LD.CIT(A) WOULD REQUIRE ITA NO.1981/AHD/2013 5 FIRST TO ASCERTAIN THE FILING OF APPLICATION BY THE ASSESSEE UNDER SECTION 154 AS PLEADED BY HIM IN PARA-7 EXTRACTED (SUPRA). THEREAFTER, THE LD.FIRST APPELLATE AUTHORITY WOULD DECIDE THE FATE OF THE APPLICATION ON MERIT. OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF THE REVENUE OR THIS WILL NOT CAUSE ANY PREJUDICE TO THE DEFENSE/EXPLANATION OF THE ASSESSEE. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 1 ST DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER