LORRAINE MARIA FONCECA, MUMBAI V. ITO 26(2)(2), MUMBAI

ITA 3985/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2144 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BEHARILAL
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.3985/MUM/2014 ASSESSMENT YEAR: 2007-08 MRS. LORRAINE MARIA FONCECA, FLAT NO.10, BERCHMAN HOUSE, ST. PETERS, 31, PALLI ROAD, BANDRA (W), MUMBAI-400050 / VS. INCOME TAX OFFICER-26(2)(2), ROOM NO.612, 6 TH FLOOR, SMT. K.G. MITTAL, AYURVEDI HOSPITAL BLDG. CHARNI ROAD (W), MUMBAI-400002 ( ! /ASSESSEE) ( ' / REVENUE) PAN. NO. AAAPF3419L ! / ASSESSEE BY SHRI BEHARILAL ' / REVENUE BY SHRI ASGHAR ZAIN # '$ % ! & / DA TE OF HEARING : 30/11/2015 % ! & / DATE OF ORDER: 01/12/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 08/01/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, CONFIRMING IMPOSITION OF PENALTY AMOUNTING TO RS.10,32,346/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). LORRAINE MARIA FONCECA ITA NO.3985/MUM/2014 2 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SHRI BIHARILAL, POINTED OUT THAT THE TRIB UNAL VIDE ORDER DATED 22/09/2015 (ITA NO.3500/MUM/2011) SET A SIDE THE MATTER ON QUANTUM ADDITION TO THE FILE OF THE A SSESSING OFFICER. THE LD. COUNSEL FURNISHED THE COPY OF THE AFORESAID ORDER. THE LD. DR, SHRI ASGHAR ZAIN, ALSO CONSENTED THAT SUCH ORDER HAS BEEN PASSED BY THE TRIBUNAL. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE QUANTUM ADDITION ON THE BASIS OF WHICH PENALTY WAS IMPOSED BY THE ASSESSING OFFICER HAS BEEN REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER BY THE TRIBUNAL VIDE ORDER DATED 22/09/2015. THE RELEVANT PORTION OF THE SAME IS REP RODUCED HEREUNDER FOR READY REFERENCE:- THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-28, MUMBAI DATED 03/03/2011 PERTAINING T O THE ASSESSMENT YEAR 2007-08, WHICH IN-TURN HAS ARISEN F ROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 26/10/2010 UN DER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2. GROUND OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) 28 HAS ERRED IN ADDING RS.30,78,644/- ON ACCOUNT OF RETIREMENT BENE FIT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, HE OUGHT NOT T O HAVE ADDED THE SAME. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S AN INDIVIDUAL, WHO FILED HER RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.9,91,050/-, WHICH HAS BEEN SUBJECT TO AN ASSESSMENT UNDER SECTI ON 143(3) R.W.S. 147 OF THE ACT. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD RECEIVED RETIREMENT BENEFITS OF RS.30,78,644/- DETA ILED AS UNDER:- 1) VOLUNTARY SEPARATION PAYMENT : RS.26,03,457 2. LORRAINE MARIA FONCECA ITA NO.3985/MUM/2014 3 2) BONUS : RS. 4,09,887 3) TAX ADVISOR ALLOWANCE : RS. 65,300 4. BEFORE THE ASSESSING OFFICER, THE ASSESSEE CLAIM ED THAT THE ABOVE RETIREMENT BENEFITS ARE EXEMPT IN TERMS OF SECTION 10(10C) OF THE ACT. THE ASSESSING OFFICER HAS REFERRED TO SECTION 10(10 C) OF THE ACT AND HELD THAT ASSESSEE WAS NOT ENTITLED TO THE RELIEF C ONTAINED THEREIN BECAUSE THE VOLUNTARY RETIREMENT TAKEN BY THE ASSES SEE IS NOT UNDER ANY APPROVED SCHEME OF VRS. THEREFORE, THE ASSESSIN G OFFICER ASSESSED THE TOTAL INCOME AT RS.40,69,700/- AS AGAI NST RS.9,91,050/- RETURNED BY THE ASSESSEE. THE CIT(A) HAS ALSO HELD THAT THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF EXEMPTION UNDER SE CTION 10(10C) OF THE ACT ON THE GROUND THAT THE IMPUGNED AMOUNTS WER E NOT RECEIVED BY THE ASSESSEE ON THE BASIS OF ANY APPROVED SCHEME OF VOLUNTARY RETIREMENT OR VOLUNTARY SEPARATION. 5. BEFORE US, T HE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED AMOUNT WAS RECEIVED FROM ERSTWHILE EMPLOYER M/S. DELTA AIR LINES IN TERMS OF A VOLUNTARY SEPARATION SCHEME, COPY OF WHICH HAS BE EN PLACED AT PAPER BOOK PAGES 5 TO 12. IT WAS ASSERTED BY THE LD . REPRESENTATIVE FOR THE ASSESSEE THAT THE AFORESAID SCHEME WAS BEFO RE THE LOWER AUTHORITIES AND THE SAME COMPLIED WITH THE REQUIREM ENTS OF SECTION 10(10C) OF THE ACT AND, THEREFORE, THE EXEMPTION WA S RIGHTLY CLAIMED BY THE ASSESSEE. 6. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE POINTED OUT THAT THERE IS NO MENTION IN THE ORDERS OF THE LOWER AUTHORITIES ABOUT THE VOLUNTARY SEPARATION SCHEME BEING REFERRED BY T HE ASSESSEE AND, THEREFORE, THE LOWER AUTHORITIES HAVE NOT ACCEPTED THE CLAIM OF THE ASSESSEE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIO NS CAREFULLY. THE DISPUTE IN THE PRESENT APPEAL RELATES TO THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER THE PROVISIONS OF SECTION 10(10C) O F THE ACT ON THE LORRAINE MARIA FONCECA ITA NO.3985/MUM/2014 4 GROUND THAT SHE RECEIVED THE AMOUNT ON ACCOUNT OF V OLUNTARY RETIREMENT SCHEME FROM HER ERSTWHILE EMPLOYER M/S. DELTA AIRLINES. AS PER THE ASSESSING OFFICER AS WELL AS THE CIT(A), EXEMPTION UNDER SECTION 10(10C) OF THE ACT IS NOT ALLOWABLE BECAUSE THE ASSESSEE LEFT THE SERVICE VOLUNTARILY AND NOT IN TERMS OF ANY APP ROVED SCHEME OF THE EMPLOYER COMPANY. THE CLAIM SET UP BY THE ASSES SSEE IS THAT THE SAID FINDING OF THE LOWER AUTHORITIES IS WITHOUT TA KING INTO CONSIDERATION THE VOLUNTARY SEPARATION SCHEME FOR I N-FLIGHT SERVICES EMPLOYEES OF DELTA AIRLINES, A COPY OF WHICH HAS AL SO BEEN PLACED IN THE PAPER BOOK FILED BEFORE US. 7.1 SECTION 10(10C) OF THE ACT PROVIDES FOR EXEMPTI ON OF ANY AMOUNT RECEIVED BY AN EMPLOYEE ON VOLUNTARY RETIREMENT OR TERMINATION OF HIS SERVICE IN ACCORDANCE WITH ANY SCHEME OR SCHEME S OF VOLUNTARY RETIREMENT OR OTHER SCHEMES PRESCRIBED THEREIN. IT IS ALSO PROVIDED IN SECTION 10(10C) OF THE ACT THAT THE SCHEME OF VOLUN TARY RETIREMENT SHOULD MEET WITH THE REQUIREMENTS CONTAINED IN RULE - 2BA OF THEINCOME TAX RULES, 1962. THUS, IT WOULD BE NECESS ARY TO EXAMINE THE CLAIM OF THE ASSESSEE HAVING REGARD TO THE PROV ISIONS OF SECTION 10(10C) OF THE ACT R.W.R 2BA OF THE RULES. IN THE A BSENCE OF ANY FINDING ON THIS ASPECT BY THE LOWER AUTHORITIES, WE DEEM IT FIT AND PROPER TO RESTORE THE MATTER BACK TO THE FILE OF AS SESSING OFFICER, WHO SHALL PASS AN ORDER AFRESH ON THIS ASPECT AS PER LA W. 7.2 NEEDLESS TO MENTION, THE ASSESSEE SHALL FURNISH THE REQUISITE MATERIAL IN SUPPORT OF HER CLAIM OF EXEMPTION UNDER SECTION 10(10C) OF THE ACT AND THE ASSESSING OFFICER SHALL CONSIDER THE SUBMISSIONS AND MATERIAL PUT-FORTH BY THE ASSESSEE AND ADJUDICATE A FRESH AS PER LAW. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS ABOVE. 2.2. WE NOTE THAT THE TRIBUNAL FOUND THAT NO FINDI NG WITH RESPECT TO CLAIM OF THE ASSESSEE UNDER THE PRO VISIONS OF LORRAINE MARIA FONCECA ITA NO.3985/MUM/2014 5 SECTION 10(10C) OF THE ACT R.W.R 2BA OF THE RULES W AS NOT GIVEN BY THE LOWER AUTHORITIES, THEREFORE, THE MATT ER WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER. IN V IEW OF THE ABOVE, WE DEEM AT APPROPRIATE TO SEND THE PENALTY A PPEAL ALSO TO THE FILE OF THE ASSESSING OFFICER AND DECID E IN ACCORDANCE WITH LAW ON THE BASIS OF OUTCOME ON QUAN TUM ADDITION. THUS, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES, AT TH E CONCLUSION OF THE HEARING ON 30/11/2015. SD/- SD/- ( RAJENDRA ) (JOGINDER SINGH) #$ / ACCOUNTANT MEMBER %$ / JUDICIAL MEMBER # $ MUMBAI; ( DATED : 01/12/2015 F{X~{T? P.S/. . . &%'()*)+' / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 # 1! ( *+ ) / THE CIT, MUMBAI. 4. 0 0 # 1! / CIT(A)- , MUMBAI 5. 3'4 .! , 0 *+& * , # $ / DR, ITAT, MUMBAI 6. 6 7$ / GUARD FILE. / BY ORDER, /3+! .! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI