ITO (Ward) 1(1), Belgaum V. Maktumsab abdullasab ankalagi, Belgaum

ITA 257/PAN/2013

• Counselvise Citation: 25724114 RSA 2013
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PAF
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 257/PNJ/2013 (ASSESSMENT YEAR-2008-09) INCOME TAX OFFICER, WARD -1(1) BELGAUM. (APPELLANT) VS. MAKTUMSAB ABDULLASAB ANKALAGI, 48/1B2, CAPTAIN JOSHI COLONY, SHAHU NAGAR, BELGAUM PAN:ABYPA5799F (RESPONDENT) APPELLANT BY : MR. BARTHAKUR, DR RESPONDENT BY : NONE DATE OF HEARING : 07/11/2013 DATE OF ORDER : 29/11/2013 O R D E R PER: D.T. GARASIA THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 18.07.2013 FOR THE ASSESSMENT YEAR 2008-09. 2. THE FOLLOWING GROUNDS ARE RAISED BY THE DEPARTMENT WHICH READ AS UNDER: (I) THE ORDER PASSED BY THE CIT(A) IS AGAINST THE ORDER/INSTRUCTION OF THE BOARD IN F. NO. 200/34/2009-IT. I DATED 6.10.2009 AND AS SUCH, COVERED BY THE EXCEPTIONS AT PARA-8(B) OF INSTRUCTION NO.3/2011 DATED 09.02.2011 IN REGARD TO MONETARY LIMIT FOR FILING OF APPEAL AND THEREFORE, IT IS PRAYED THAT THE APPEAL ON THE ISSUE BE ADMITTED IN LAW. (II)THE CIT(A) ERRED IN IGNORING E-CIRCULAR ON EXIST OPTION SCHEME ISSUED BY THE STATE BANK OF INDIA, CORPORATE CENTRE, MUMBAI WHEREIN, AS PER PARA-10, IT IS CLEARLY MENTIONED THAT NO EXEMPTION OF EX-GRATIA FROM INCOME TAX UNDER SECTION 10(10C) OF THE I.T. ACT, 1961, IS INTENDED IN THAT SCHEME. (III) THE CIT(A) ERRED IN PRESUMING THAT REQUIREMENTS OF RULE 2BA OF I.T. RULES, 1962 HAVE BEEN MET IGNORING THE E-CIRCULAR OF THE SBI, AS WELL AS THE BOARDS INSTRUCTION 2 . ITA NO. 257 PNJ 2013,(A.Y.2008-09) ITO VS. MAKTUMSAB ABDULLASAB ANKALAGI, BELGAUM. NO. 200/34/2009-IT. I DATED 6.10.2009 WHEREIN, IT IS CLEARLY MENTIONED THAT THE SCHEME FRAMED BY THE STATE BANK OF PATIALA AND STATE BANK OF INDIA DOES NOT LAY OUT ELIGIBILITY FOR DEDUCTION UNDER SECTION 10(10C). 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: 3.1. THE ASSESSEE IS EMPLOYEE OF STATE BANK OF INDIA, WHO HAS TAKEN VOLUNTARY RETIREMENT UNDER EXIT OPTION SCHEME. THE ASSESSEE HAS RECEIVED EX-GRATIA AMOUNT OF RS. 3,86,430/- CONSEQUENT UPON RETIREMENT. ACCORDING TO THE AO AS PER RULE 2BA OF THE INCOME TAX RULES, EXEMPTION U/S 10CC CAN BE ALLOWED TO THE EMPLOYEE CONSEQUENT UPON VOLUNTARY RETIREMENT SUBJECT TO FOLLOWING CONDITION. AS PER THE ASSESSING OFFICER, ASSESSEE HAS NOT SATISFIED THE CONDITIONS U/S 10(10C) FOR EX-GRATIA PAYMENT AND IT WAS DISALLOWED AND BROUGHT TO TAX. 4. THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS ALLOWED THIS APPEAL IN PARA- 12,13 & 14 REPRODUCED AS UNDER: 12. A PERUSAL OF THE ASSESSMENT ORDER- THE AO REFERRED THE BOARDS INSTRUCTIONS F.NO. 200/34/2009 ITA I DATED 06.10.2009 THEREBY IT HAS BEEN CLARIFIED THAT THE EXIT OPTION SCHEME OF STATE BANK OF INDIA OF PATIALA ARE NOT IN ACCORDANCE WITH RULE 2BA AND ACCORDINGLY SUCH CASES TO BE REVIEWED. IT IS OBSERVED THAT THE CIRCULAR ISSUED BY THE CBDT IMPLIED THAT EXIT OPTION NOTIFIED BY THE STATE BANK OF INDIA AND STATE BANK OF PATIALA ARE NOT IN ACCORDANCE WITH RULE 2BA AND SUGGESTED TO REVIEW SUCH CASES. HOWEVER AS DECISION OF HONBLE ITAT MUMBAI, KOLKATA AND AHMEDABAD, CITED ABOVE HELD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION U/S. 10(10C) EVEN THOUGH THE VOLUNTARY SEPARATION SCHEME IS NOT IN CONFORMITY WITH THE REQUIREMENT OF RULE 2BA. 13. HOWEVER IN THIS CONTEXT, IT IS RELEVANT TO MENTION THE OBSERVATION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. HERO CYCLE PVT. LTD., AND OTHERS (1997) 228 ITR 463 WHEREIN IT IS HELD THAT- MORE-OVER, IT IS WELL SETTLED THAT CIRCULARS CAN BIND THE INCOME TAX OFFICER BUT WILL NOT BIND THE APPELLATE AUTHORITY OR THE TRIBUNAL OR THE COURT OR EVEN THE ASSESSEE. 14. IN THE LIGHT OF DETAILED DISCUSSION MADE ABOVE, FACTS AS WELL AS THE LEGAL POSITION, IT IS MY CONSIDERED OPINION THAT APPELLANT IS ENTITLED TO EXEMPTION U/S. 10(10C) OF THE ACT. THE ASSESSING OFFICER IS THEREFORE, DIRECTED TO ALLOW EXEMPTION TO THE EXTENT OF RS. 3,86,430/- TOWARDS EX-GRATIA PAYMENTS. 5. HAVING HEARD LEARNED AR, ASSESSEE DID NOT REMAIN PRESENT BUT FILED THE WRITTEN STATEMENT AND CONTENDED THAT THE TAX EFFECT IN THIS APPEAL IS BELOW 3 3 . ITA NO. 257 PNJ 2013,(A.Y.2008-09) ITO VS. MAKTUMSAB ABDULLASAB ANKALAGI, BELGAUM. LAKHS. THEREFORE, DEPARTMENT APPEAL MAY BE DISMISSED. LEARNED DR CONTENDED THAT AS PER BOARD CIRCULAR THERE ARE EXCEPTION OF INSTRUCTION NO. 3/2011 DATED 9.2.2011 AND THIS CASE FALLS UNDER THE EXCEPTION, THEREFORE APPEAL MAY BE DECIDED ON MERIT. 6. WE HAVE GONE THROUGH THE ORDER OF CIT(A) AND WRITTEN SUBMISSION FILED BY THE ASSESSEE. WE ARE OF THE VIEW THAT THE CIT(A) HAS ANALYSED VARIOUS JUDGEMENTS RENDERED BY TRIBUNAL AND HIGH COURTS VIS-A-VIS SCHEME OF THE BANK AND CONDITION MENTIONED IN RULE 2BA AND HELD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10(10C) SINCE ALL THE REQUIREMENTS OF RULE 2BA ARE SATISFIED. MOREOVER BOTH CIRCULARS ARE NOT BINDING TO THE TRIBUNAL. WE FIND THAT THE CIT(A) HAS RELIED UPON THE DECISION OF TRIBUNAL IN CASE OF PATRIC I BRITTO & ORS. VS. ITO , ITA NO. 4493/MUMBAI/2006 AND VARIOUS DECISION OF THE TRIBUNAL. WE FIND THAT THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL FILED BY THE REVENUE IS LESS THAN RS. 3 LACS, AND THEREFORE, THE APPEAL IS NOT MAINTAINABLE. THE REVENUE FILED THE APPEAL ON 20.09.2013 AND AS PER THE CBDTS LATEST CIRCULAR INSTRUCTION NO. 3/2011 UNDER F. NO. 279/MISC.142/2007-ITJ DATED 9 TH FEBRUARY, 2011, THE APPEAL SHOULD NOT BE ENTERTAINED. IN VIEW OF THE INSTRUCTIONS OF THE CBDT SINCE THE TAX EFFECT IS LESS THAN RS. 3 LACS, WE DISMISS THE APPEAL OF THE REVENUE . THEREFORE, WE DISMISS THE APPEAL. 8. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/11/2013. SD/- SD/- ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 29.11.2013 P.S.- *PK* 4 . ITA NO. 257 PNJ 2013,(A.Y.2008-09) ITO VS. MAKTUMSAB ABDULLASAB ANKALAGI, BELGAUM. COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER