Smt. Indra Kumari Bajaj through L/h Sh. Thakur Dass Bajaj, Hisar V. ITO, Hisar

ITA 2735/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3220 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S N MEENA
• Keywords: Earning of tax free income; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(1); 143(2); 147; 148; 10

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C: NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.2735/DEL/2017 A Y 2011-12 APPELLANT BY : SH. RAJ KUMAR , ADVOCATE RESPONDENT BY: SH. S. N. MEENA, SR. DR DATE OF HEARING 2 8 / 11 /201 9 DATE OF PRONOUNCEMENT 04 / 1 2 /201 9 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER THE APPEAL IS FILED BY THE ASSESSEE, AGAINST THE OR DER DATED 29.01.2016 PASSED BY THE CIT(A), HISSAR FOR A.Y. 2011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING FOLLOWING ACTION OF THE ASSESSI NG OFFICER IN: I) INITIATING PROCEEDINGS U/S 147 OF THE INCOME-TAX ACT, 1961 AND COMPLETING ASSESSMENT U/S 147/143(3) OF THE ACT AT AN INCOME OF RS.2067650/-AGAINST THE RETURNED INCOME IN A SUM OF RS.968600/-; INDRA KUMARI BAJAJ THROUGH L/H. SH. THAKUR DASS BAJAJ H. NO. 48, GREEN PARK, HISAR-125001 (HARYANA) VS INCOME TAX OFFICER, WARD - 2 , HISAR (APPELLANT) (RESPONDENT) II) INITIATING PROCEEDINGS U/S 147 OF THE ACT ON THE BA SIS OF CHANGE OF OPINION WITHOUT THERE BEING ANY REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT; III) PASSING ORDER U/S 147/143(3) OF THE ACT WITHOUT DIS POSING OF THE OBJECTION TO REOPENING BY SPEAKING ORDER; IV) MAKING AN ADDITION OF RS.6,50,000/- AND RS. 4,49,05 0/- ON ACCOUNT OF GRATUITY AND LEAVE ENCASHMENT RECEIVED FROM THE STATE GOVERNMENT AFTER RETIREMENT BY RESTRICTING THE EXEMPTION CLAIM ED U/S 10(10)(I) AND 10(10AA)(I) OF THE ACT TO RS.3,50,000/-. 3. RETURN DECLARING AN INCOME OF RS. 13,13,930/- WA S FILED ON 29.07.2011 WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX AC T, 1961 ON THE RETURNED INCOME. THE ASSESSEE WAS EMPLOYEE OF THE CHAUDHARY CHARAN SINGH HARYANA AGRICULTURAL UNIVERSITY, HISAR, A STATE UNIVERSITY, ESTABLISHED UNDER THE HARYANA AND PUNJAB AGRICULTURAL UNIVERSITIES ACT, 1 970 AND NOTIFIED UNDER UNIVERSITY GRANTS COMMISSION. THE ASSESSEE RETIRED ON 31.03.2010. AFTER RETIREMENT DURING THE ASSESSMENT YEAR 2011-12, THE ASSESSEE RECEIVED GRATUITY AMOUNTING TO RS.6,50,000/- AND LEAVE ENCAS HMENT AMOUNTING TO RS. 449050/-, AND CLAIMED EXEMPTION U/S 10(10)(I) AND 1 0(10AA)(I) OF THE INCOME TAX ACT, 1961. GRATUITY AND LEAVE ENCASHMENT AMOUNT WAS CLAIMED EXEMPT INCOME IN THE RETURN BEING STATE UNIVERSITY AND ITS EMPLOYEES ARE TREATED AT PAR WITH THE STATE GOVT, EMPLOYEE FOR ALL PURPOSES, AS PER SECTION 10(10)(I) AND 10(10AA)(I) OF THE INCOME TAX ACT, 1961. IN RESPONS E TO NOTICE U/S 148, APPELLANT HAD SUBMITTED REPLY THAT ORIGINAL RETURN ALREADY SUBMITTED BE TREATED IN RESPONSE TO NOTICE U/S 148. THEREAFTER, NOTICE WAS ISSUED FOR REASSESSMENT U/S 147/143(3) OF THE INCOME TAX ACT, 1961 AND REASSESSMENT WAS MADE BY THE ASSESSING OFFICER VIDE ORDER DATED 30.01.2014. THE ASSESSING OFFICER RESTRICTED THE EXEMPTION ON ACCOUNT OF GRAT UITY AND LEAVE ENCASHMENT U/S 10(10)(I) AND 10(10AA)(I) OF THE ACT AND MADE T HE ADDITION IN THE RETURNED INCOME AS PER DETAIL GIVEN BELOW:- RETURNED INCOME 968600.00 ADDITION ON ACCOUNT OF GRATUITY 650000.00 ADDITION ON ACCOUNT OF LEAVE ENCASHMENT 449050.00 TOTAL INCOME ASSESSED 2067650.00 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE APPEAL WAS DISMISSED ON THE GROUND THAT THE ASSESSEE WAS AN EMPLOYEE OF CHAUDHARY CHARAN SINGH HARYANA A GRICULTURAL UNIVERSITY, WHICH IS NOT A STATE GOVT. 5. THE LD. AR SUBMITTED THAT THE ASSESSMENT WAS FRA MED U/S 143(1) OF THE INCOME TAX ACT, 1961. NO NOTICE U/S 143(2) FOR ASSE SSMENT WAS ISSUED WITHIN SIX MONTHS FROM THE END OF THE ASSESSMENT YEAR. THE REAFTER, NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 WAS ISSUED ON 03-10-2013 W ITHOUT SERVICE OF COPY OF REASONS INITIATED BEFORE PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961. IN RESPONSE TO NOTICE U/S 148, THE ASSESSEE HAD SUBMIT TED REPLY THAT ORIGINAL RETURN ALREADY SUBMITTED BE TREATED IN RESPONSE TO NOTICE U/S 148. THEREAFTER, NOTICE WAS ISSUED FOR REASSESSMENT U/S 147/143(3) O F THE INCOME TAX ACT, 1961 AND REASSESSMENT WAS MADE BY THE ASSESSING OFF ICER VIDE ORDER DATED 30-01-2014. GRATUITY AND LEAVE ENCASHMENT AMOUNT WA S CLAIMED EXEMPT INCOME IN THE RETURN BEING STATE UNIVERSITY AND ITS EMPLOYEES ARE TREATED AT PAR WITH THE STATE GOVERNMENT, EMPLOYEE FOR ALL PUR POSES, AS PER SECTION 10(10)(I) AND 10(10AA)(I) OF THE INCOME TAX ACT, 19 61. THE ASSESSEE RETIRED FROM SERVICE BEFORE 24.05.2010. THE LD. AR SUBMITTE D THAT THIS ISSUE IS CONSIDERED BY THE TRIBUNAL IN NUMBER OF CASES WHERE IN THE TRIBUNAL HAS GRANTED RELIEF IN FAVOUR OF ASSESSEES WHO WERE WORK ING IN THE CHAUDHARY CHARAN SINGH HARYANA AGRICULTURAL UNIVERSITY, HISAR , A STATE UNIVERSITY, ESTABLISHED UNDER THE HARYANA AND PUNJAB AGRICULTU RAL UNIVERSITIES ACT, 1970 AND NOTIFIED UNDER UNIVERSITY GRANTS COMMISSI ON. THE LD. AR RELIED UPON THE DECISION OF THE TRIBUNAL IN CASE OF RAM KA NWAR RANA VS. ITO BEING ITA NO. 1307/DEL/2016 ORDER DATED 16.06.2016. 6. THE LD. DR RELIED UPON THE ORDER OF THE CIT(A) A ND THE ASSESSMENT ORDER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS TO GROUND NOS. (I) TO (III) RELATING TO INITIATION OF REASSESSMENT PROCEEDINGS IS NOT PRESSED BY THE LD. AR, HENCE DISMISSED. IT IS PERTINENT TO NOTE THAT THE ASSESSEE WAS AN EMPLOYEE OF CHAUDHARY CHARAN SINGH HARYANA AGRICULTURAL UNIVERSITY, HISAR, A STA TE UNIVERSITY, ESTABLISHED UNDER THE HARYANA AND PUNJAB AGRICULTURAL UNIVERSI TIES ACT, 1970 AND NOTIFIED UNDER UNIVERSITY GRANTS COMMISSION. THE TR IBUNAL IN CASE OF RAM KANWAR RANA (SUPRA) HELD THAT THE EXEMPTION U/S 10( 10)(I) AND 10(10AA)(I) OF THE ACT ARE AVAILABLE TO THE ASSESSEE IN RESPECT OF THE ARREARS OF GRATUITY AND DISMISSED THE GROUNDS ABOUT THE INITIATION OF THE R E-ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN IN SEVERAL DECISIONS INCLUDING RAGHU BIR SINGH PANGHAL VS. ITO IN ITA NO. 1308/DEL/2016. AS IN THE PRESENT CASE AL SO THE ASSESSEE IS FOUND TO BE AN EMPLOYEE HOLDING A CIVIL POST UNDER A STATE, THEREFORE, THE PROVISIONS OF SECTION 10(10)(I) OF THE ACT ARE ATTRACTED IN THIS CASE AND THE ASSESSEE IS ENTITLED TO EXEMPTION IN RESPECT OF GRATUITY AMOUNT RECEIVED IN TOTAL UPTO RS. 10 LAC WHICH COVERS A SUM OF RS. 6,50,000/- RECEIVE D DURING THE YEAR. AS REGARDS THE ARREARS OF LEAVE ENCASHMENT, IT IS ALSO ON THE SAME FOOTING TO THAT OF EXEMPTION CLAIMED UNDER SECTION 10(10)(I). THERE FORE, THE ASSESSEE IS ENTITLED FOR THE EXEMPTION CLAIMED UNDER SECTION 10 (10)(I) AND 10(10AA)(I) OF THE ACT. THE CIT(A) AS WELL AS THE ASSESSING OFFICE R WAS NOT RIGHT IN DISALLOWING THE SAME. THUS, GROUND NO. (IV) IS ALLOWED. 8. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 4 TH DECEMBER, 2019. SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBL E) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: 04/12/2019 *NEHA* COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI DATE OF DICTATION 27.11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 04.12.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS 04.12.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 04.12.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 04.12.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 04.12.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 04.12.2019 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER