Sri Ch Rangadu, Visakhapatnam V. The ITO Ward-2(3) Visakhapatnam, Visakhapatnam

ITA 277/VIZ/2011

• Counselvise Citation: 27725314 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 14-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D MANOJ KUMAR
• Keywords: Bonafide belief; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, VISHAKHAPATNAM BEFORE S/SHRI B. RAMAKOTAIAH (AM) & SAKTIJIT DEY (JM) I.T.A. NO.277/VIZ/2011 ASSESSMENT YEAR :2007 - 08 CH. RANGADU, FLAT NO.3A, SRI SAI RESIDENCY, 43 - 11 - 2/15, SUBBALAKSHMI NAGAR, VISAKHAPATANAM VS. ITO, WARD 2(3), VISAKHAPATNAM PAN/GIR NO. : AAZPU 9585 F ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI G.V.N.HARI RESPONDENT BY : SRI D.MANOJ KUMAR DATE OF HEARING : 0 9 /12/2013 DATE OF PRONOUNCEMENT : 11 /12/2013 O R D E R PER SAKTIJIT DEY, JM : THE ASSESEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2 007 - 08 AGAINST ORDER DATED 12.5.2011 OF LD CIT(A) VISAAKHAPATNAM. 2. THE SHORT ISSUE BEFORE US FOR OUR ADJUDICATION IN THIS CASE IS WHETHER OR NOT THE CIT (A) IS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR EXEMPTION OF RS.5,00,000/ - U/S.10(10C) OF THE I.T.ACT, 1961. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE WAS AN EMPLOYEE OF THE STATE BANK OF INDIA AND FILED H IS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 2 I.T.A. NO.277/VIZ/2011 ASSESSMENT YEAR :2007 - 08 27.7.2007 DECLARING TOTAL INCOME OF RS.4,66,240/ - AFTER CLAIMING EXEMPTION OF RS.5,00,000/ - UNDER SECTION 10(10C) OF THE ACT. THE RETURN UNDER SECTION 143(1) WAS PROCESSED RESULTING IN REFUND. SUBSE QUENTLY, THE AO NOTICED THAT THE AMOUNT RECEIVED BY THE ASSESSEE AS EX - GRATIA FROM THE BANK UNDER EXIT OPTION SCHEME DOES NOT QUALIFY FOR DEDUCTION U/.S.10(10C) OF THE ACT AS PER THE CIRCULAR ISSUED BY THE SBI VIDE CDO/PH/HRD - IR/12/05 - 06 DT.3.5.2005 ISSU ED BY THE STATE BANK OF INDIA HR DEPARTMENT, HYD, LHO. HENCE, THE AO REOPENED THE ASSESSMENT BY ISSUING A NOTICE U/S.148. DURING THE REASSESSMENT PROCEEDINGS, WHEN THE AO PROPOSED TO DISALLOW THE CLAIM MADE U/S.10(10C) OF THE ACT, IT WAS CONTENDED ON BE HALF OF THE ASSESSEE THAT ASSESSEE ENTERTAINS A BONAFIDE BELIEF THAT VOLUNTARY RETIREMENT SCHEME IS ELIGIBLE FOR EXEMPTION UNDER THE SAID PROVISION AND IN SUPPORT OF SUCH CONTENTION, RELIANCE WAS PLACED ON CERTAIN DECISIONS OF DIFFERENT BENCHES OF THE TRIB UNAL. THE AO, HOWEVER, WAS OF THE VIEW THAT AS PER THE PROVISION CONTAINED IN SECTION 10(10C), ANY AMOUNT RECEIVED OR RECEIVABLE BY AN EMPLOYEE ON HIS VOLUNTARY RETIREMENT OR TERMINATION OF HIS SERVICE, IN ACCORDANCE WITH ANY SCHEME OR SCHEMES OF VOLUNTAR Y RETIREMENT OF THE CASE OF PUBLIC SECTOR COMPANY REFERRED TO IN SUB - CLAUSE (I) OF SECTION 10(10C), SCHEME OF VOLUNTARY SEPARATION IS EXEMPT, TO THE EXTENT SUCH AMOUNT DOES NOT EXCEED FIVE LAKH RUPEES. HOWEVER, ACCORDING TO THE AO, IN ASSESSEES CASE, IT IS NOT A VOLUNTARY RETIREMENT OR TERMINATION OF SERVICE OR A SCHEME OF VOLUNTARY SEPARATION. THE ASSESSEE HAS OPTED EXIT OPTION SCHEME OF THE SBI, WHICH ITSELF SPEAKS ABOUT THE TAXABILITY OF THE EX - GRATIA. THEREFORE, THE ASSESSEES CASE DOES NOT FALL W ITHIN THE AMBIT OF SECTION 10(10C) OF THE I.T.ACT. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT BY DISALLOWING ASSESSEES CLAIM UNDER SECTION 10(10C) OF THE ACT. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED BY THE AO, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. LD CIT(A), HOWEVER, UPHELD THE ACTION OF THE AO BY HOLDING THAT THE SCHEME OF THE STATE BANK OF INDIA IS IN CONTRAVENTION OF SECTION 10(10C) OF THE ACT R.W RULE 2BA WHICH WAS ALSO MADE KNOWN TO THE EMPLOYEES AT THE TIME O F OPTING FOR EXIT OPTION SCHEME. THEREFORE, THE CIT(A) HELD THAT THE EXIT OPTION SCHEME OF THE SBI CANNOT BE EQUATED WITH THE VOLUNTARY RETIREMENT SCHEME OF THE RBI AND OTHER SIMILAR SCHEMES WHICH WERE CONSIDERED IN THE DECISIONS RELIED UPON BY THE ASSESS EE. THE CIT ON THE AFORESAID OBSERVATIONS, DISMISSED THE APPEAL OF THE ASSESSEE. 3 I.T.A. NO.277/VIZ/2011 ASSESSMENT YEAR :2007 - 08 5. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAS CLAIMED EXEMPTION UNDER SECTION 10(10C) OF THE ACT ON THE AMOUNT OF RS.5 LAKHS RECEIVED BY HIM UNDER THE EXIT OPTION SCHEME OF SBI. IT IS THE VIEW OF THE LOWER AUTHORITIES THAT THE EXIT OPTION SCHEME OF SBI UNDER WHICH THE ASSESSEE WAS GIVEN THE AMOUNT OF RS.5 LAKHS CANN OT BE EQUATED WITH THE VOLUNTARY RETIREMENT SCHEME OF THE RBI OR OTHER BANKS. BEFORE US, LD A.R. RELIED UPON THE FOLLOWING DECISIONS OF THE COORDINATE BENCHES TO SUPPORT HIS CONTENTION THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE: I) ITA NO.303 TO 977/AHD/2010 IN THE CASE OF JITENDRA VITTHALDAS VS ITO; II) ITA NO.122/AHD/2010 IN THE CASE OF ITO VS. NALIN NATWARLAL SHAH ; III) ITA NO.925 IN THE CASE OF SHRI BIKRAM JIT PASSI; IV) I.T.A. NO.326/PUNE/2010 IN THE CASE OF SHRI JAVERILAL DALIC HAND CHHAJED; V) PANDYA VINODCHANDRA BHOGILAL VS ITO, 13 TTJ (AHD) 253 O N CAREFUL EXAMINATION OF THE DECISIONS RELIED UPON BY THE ASSESSEE, WE FIND THAT THE ISSUE IS NO MORE RES - INTEGRA AS DIFFERENT BENCHES OF THE TRIBUNAL ON CONSIDERING THE IDENTICAL IS SUE OF AMOUNT RECEIVED UNDER THE EXIT OPTION SCHEME OF THE SBI, H ELD THAT THE SAID SCHEME QUALIFIES FOR EXEMPTION UNDER SECTION 10(10C) OF THE ACT. FOLLOWING THE CONSISTENT VIEW OF THE COORDINATE BENCHES OF THIS TRIBUNAL, WE HOLD THAT THE ASSESSEE IS ELIG IBLE TO CLAIM EXEMPTION U/S.10(10C) OF THE ACT ON THE AMOUNT RECEIVED BY IT UNDER EXIT OPTION SCHEME OF THE SBI. ACCORDINGLY, WE DELETE THE ADDITION OF RS.5 LAKHS MADE TO THE INCOME OF THE ASSESSEE. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/12/2013 . SD/ - S D/ - (B.RAMAKOTAIAH ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER VISHAKHAPATNAM DATED 11 / 12/2013 PARIDA , SR. PS 4 I.T.A. NO.277/VIZ/2011 ASSESSMENT YEAR :2007 - 08 COPY OF THE ORDER FORWARDED TO : 1. CH. RANGADU, FLAT NO.3A, SRI SAI RESIDENCY, 43 - 11 - 2/15, SUBBALAKSHMI NAGAR,VISAKHAPATANAM 2. THE RESPONDENT.: ITO, WARD 2(3), VISAKHAPATNAM 3. THE CIT(A) - VISAKHAPATNAM 4. CIT VISAKHAPATNAM 5. DR, ITAT, VISHAKHAPATNAM 6. GUARD FILE. BY ORDER SR.PS, ITAT, VISHAKHAPATNAM //TRUE COPY//