SMITA VIKAS VAIDYA, MUMBAI V. ITO 26(2)(4), MUMBAI

ITA 2598/MUM/2013

• Counselvise Citation: 259819914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K SHIVRAM; NEELAM C JADHAV
• Assessee Lawyers: PRAKASH L PATHADE
• Keywords: Reopening of assessment

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.2598/MUM/2013 ( / ASSESSMENT YEAR : 2008-09) MRS.SMITA VIKAS VAIDYA, D-301, GORAI MANGALMURTI CHS LTD, NEAR GORAI DEPOT, BORIVALI (W), MUMBAI-400091 / VS. INCOME TAX OFFICER 26(2) - 4, DR.K.G.MITTAL AYURVEDIC HOSPITAL, 6 TH FLOOR, CHARNI ROAD, MUMBAI-400002. ( / APPELLANT) .. ( !' / RESPONDENT) ./ #$ ./PAN/GIR NO. : ABMPV5261H % / APPELLANT BY : SHRI PRAKASH L PATHADE !' & % /RESPONDENT BY : SHRI K SHIVRAM & MS.NEELAM C JADHAV ' & ( ) / DATE OF HEARING : 9.7.2014 *+ & ( ) /DATE OF PRONOUNCEMENT : 9.7.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 25.02.2013 PASSED BY LD CIT(A)-28, MUMBAI AND IT RELATES TO TH E ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE REJECTION OF CLAIM FOR EXEMPTION OF RS.5.00 LAKHS MADE BY THE ASSESSEE U/S 10(10C) OF THE ACT. THOUGH THE ASSESSEE HAS ALSO CHALLENGED THE VALIDIT Y OF RE-OPENING OF ASSESSMENT, YET THE LD A.R DID NOT PRESS THE SAME DURING THE COURSE OF HEARING. ACCORDINGLY THE GROUND RELATING TO THE VALIDITY OF REOPENING OF ASSESSMENT IS DISMISSED AS NOT PRESSED. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE IS AN EX-EMPLOYEE OF M/S NEW INDIA CO-OP BANK LTD. THE ASSESSEE OPTE D FOR VOLUNTARY RETIREMENT UNDER NEW INDIA BANK VOLUNTARY RETIREMENT SCHEME AND ACCO RDINGLY RECEIVED A SUM OF I.T.A. NO.2598/MUM/2013 2 RS.6.00 LAKHS AS COMPENSATION. THE ASSESSEE CLAIME D EXEMPTION TO THE TUNE OF RS.5.00 LAKHS U/S 10(10C) OF THE ACT IN HER RETURN OF INCOM E. THE AO TOOK THE VIEW THAT THE SCHEME OF VOLUNTARY RETIREMENT FRAMED BY M/S NEW IN DIA CO-OP BANK LTD IS NOT IN ACCORDANCE WITH RULE 2BA OF THE INCOME TAX RULES AN D ACCORDINGLY REJECTED THE CLAIM FOR EXEMPTION OF RS.5.00 LAKHS U/S 10(10C) OF THE A CT. 4. IN THE APPEAL FILED BEFORE LD CIT(A), THE ASS ESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS AND CONTENDED THAT SHE IS ENTITLED TO EXE MPTION U/S 10(10C) OF THE ACT:- (A) CIT VS. KOODATHIL KALLYATAN AMBUJAKSHAN (309 I TR 113)(BOM) (B) CHANDRA RANGANATHAN AND OTHERS VS. CIT (326 IT R 49)(SC) THE LD CIT(A) HELD THAT THE FACTS PREVAILING IN THE INSTANT CASE ARE NOT IDENTICAL TO THE FACTS PREVAILING IN THE ABOVE CITED CASE. THE LD C IT(A) ALSO EXAMINED THE VOLUNTARY RETIREMENT SCHEME FRAMED BY THE EMPLOYER OF THE ASS ESSEE AND EXPRESSED THE VIEW THAT THE SAME IS NOT IN ACCORDANCE WITH THE RULE 2B A OF THE I.T RULES. HENCE, THE LD CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 5. WE HAVE HEARD THE PARTIES AND CAREFULLY PERU SED THE RECORD. THE LD A.R, BESIDES THE TWO CASE LAW REFERRED ABOVE, ALSO PLACED STRONG RELIANCE ON THE DECISION RENDERED BY THE THIRD MEMBER IN THE CASE OF DCIT VS. KRISHNA GO PAL SAHA (2009)(121 ITD 368)(KOL)(TRIB), WHEREIN THE HONBLE THIRD MEMBER H AS TAKEN THE VIEW THAT THE PROVISIONS OF SEC. 10(10C) SHOULD BE INTERPRETED LI BERALLY IN A MANNER WHICH IS BENEFICIAL TO RETIRED EMPLOYEES. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY THE HONBLE THIRD MEMBER IN TH E CASE OF KRISHNA GOPAL SAHA (REFERRED SUPRA):- FROM THE ABOVE IT IS EVIDENT THAT WHILE THE LEARNE D AM RELIED UPON THE DECISION OF HONOURABLE MADRAS HIGH COURT IN THE CASE OF CIT VS. M. CHEDDURAI & ORS (2008) 5 DTR (MAD) 201, HE HAS NOT TAKEN INTO ACCOU NT THE DECISIONS OF OTHER HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT . THE HONBLE JURISDICTIONAL HIGH COURT UNDER THE IDENTICAL FACTS HELD THE ASSES SEE I.E., THE RETIRED EMPLOYEE, TO BE ENTITLED FOR DEDUCTION UNDER SECTION 10(10C). SIMILAR VIEW IS TAKEN BY HONOURABLE BOMBAY AS WELL AS KARNATAKA HIGH COURTS. THE DECISION OF HONOURABLE JURISDICTIONAL HIGH COURT IS BINDING UPO N US AND MORE OVER IF TWO VIEWS ARE POSSIBLE WHILE INTERPRETING THE PROVISION , A VIEW WHICH IS FAVOURABLE TO THE ASSESSEE HAS TO BE ADOPTED. HONOURABLE JURISID ICTIONAL HIGH COURT IN THE ABOVE REFFERRED CASE OF SAIL DSP VR EMPLOYEES ASSOC IATION 1998 VS. UNION OF INDIA (SUPRA) HAS ALSO HELD THAT THE PROVISIONS OF S. 10(10C) ARE TO BE INTERPRETED LIBERALLY IN A MANNER WHICH IS BENEFICIAL TO RETIRE D EMPLOYEES. IN VIEW OF THE ABOVE, I RESPECTFULLY FOLLOWING THE DECISIONS OF HO NOURABLE JURISDICTIONAL HIGH COURT, BOMBAY HIGH COURT AND KARNATAKA HIGH COURT A GREE WITH THE LEARNED JM I.T.A. NO.2598/MUM/2013 3 AND HOLD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER S. 10(10C) TO THE EXTENT OF RS.5 LAKHS. 6. IN THE INSTANT CASE, WE NOTICE THAT THE LD CI T(A) HAS ENTERTAINED THE VIEW THAT THE SCHEME FRAMED BY THE EMPLOYER OF THE ASSESSEE IS NO T IN ACCORDANCE WITH RULE 2BA ON THE REASONING THAT (A) THE EMPLOYER HAS DEDUCTED TDS ON THE PAYMENT AND HENCE, IN THE OPINION OF THE EMPLOYER, THE SCHEME IS NOT COVERED BY RULE 2BA. (B) THE SCHEME APPARENTLY NOT APPLICABLE TO A LL EMPLOYEES NAMELY, CLERICAL CADRE OR GROUP C EMPLOYEES ETC. THERE MAY NOT BE ANY DISPUTE THAT THE VIEW ENTERTAI NED BY THE EMPLOYER OF THE ASSESSEE WITH REGARD TO THE PARTICULAR PROVISION OF THE INCOME TAX ACT IS NOT BINDING ON THE ASSESSEE. FURTHER THE LD CIT(A) HAS ONLY DRAWN INFERENCE FROM THE READING OF A PARTICULAR CLAUSE OF THE SCHEME THAT THE SAID SCHEM E IS NOT APPLICABLE TO ALL EMPLOYEES, I.E., HE HAS NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THE SAID SCHEME IS NOT MADE APPLICABLE TO ALL EMPLOYEES. HENCE, WE ARE UN ABLE TO ACCEPT THE VIEW EXPRESSED BY LD CIT(A). FURTHER THE HONBLE CALCUTTA HIGH CO URT IN THE CASE OF SAIL DSP VR EMPLOYEES ASSOCIATION, WHICH HAS BEEN REFERRED BY T HE THIRD MEMBER IN THE CASE OF KRISHNA GOPAL SAHA (SUPRA) HAS EXPRESSED THE VIEW T HAT THE PROVISIONS OF SEC. 10(10C) SHOULD BE INTERPRETED LIBERALLY IN A MANNER BENEFIC IAL TO THE RETIRED EMPLOYEES. IN VIEW OF THE ABOVE, WE ARE UNABLE TO SUSTAIN THE ORDER PA SSED BY LD CIT(A). ACCORDINGLY, WE SET ASIDE HIS ORDER AND DIRECT THE AO TO ALLOW THE EXEMPTION OF RS.5.00 LAKHS TO THE ASSESSEE U/S 10(10C) OF THE ACT. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 9TH JULY, 2014. *+ ' , -. / 0 9TH JULY, 2014 + & 2 3 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER - ' MUMBAI: 9 TH JULY,2014. . . ./ SRL , SR. PS I.T.A. NO.2598/MUM/2013 4 ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3 . ' 5( ( ) / THE CIT(A)- CONCERNED 4. ' 5( / CIT CONCERNED 5. 67 2 !(8 , ) 8 , - ' / DR, ITAT, MUMBAI CONCERNED 6. 2 9 : / GUARD FILE. ; ' / BY ORDER, TRUE COPY < # (ASSTT. REGISTRAR) ) 8 , - ' /ITAT, MUMBAI