Shri Harilal Shankerlal Raval, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-4(3), RAJKOT-GUJARAT

ITA 497/RJT/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0487 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 20-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.497/RJT/2014 / ASSESSMENT YEAR: 2007-2008 SHRI HARILAL SHANKERLAL RAVAL, 58, JMC NAGAR, RAIYA ROAD, RAJKOT PAN: ABOPR 4946 F VS INCOME-TAX OFFICER, WARD 4 (3), RAJKOT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M.J. RANPURA, CA REVENUE BY : SHRI YOGESH PANDEY, DR / DATE OF HEARING : 06/10/2015 /DATE OF PRONOUNCEMENT: 27/10/2015 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-III, R AJKOT DATED 18.05.2012 PASSED FOR ASSESSMENT YEAR 2007-08. 2. THIS APPEAL WAS PRESENTED BEFORE THE TRIBUNAL ON 20.08.2014. THE REGISTRY HAS POINTED OUT THAT THE APPEAL IS TIM E BARRED BY 765 DAYS. IN ORDER TO EXPLAIN THE DELAY, THE ASSESSEE HAS FILED AN APPLICATION ALONG WITH THE AFFIDAVIT. IN THE APPLI CATION, IT IS PLEADED BY THE ASSESSEE THAT HE IS AN EX-EMPLOYEE OF STATE BANK OF INDIA WHO TOOK VOLUNTARY RETIREMENT UNDER THE EXIT OPTION SC HEME OF STATE BANK OF INDIA. HE HAS CLAIMED AN EXEMPTION U/S 10( 10C) OF THE ITA NO. 497 /RJT/2014 SHRI HARILAL SHANKERLAL RAVAL VS. ITO AY : 2007-08 - 2 - INCOME-TAX ACT AMOUNTING TO RS.2,78,893/-. THIS WA S DENIED TO THE ASSESSEE. HIS APPEAL WAS DECIDED ON 18.05.2012, BUT THE ORDER WAS NOT SERVED UPON HIM. HE PLEADED THAT HE CAME TO KNOW A BOUT THE ORDER WHEN THE PENALTY OF RS.61,300/- WAS IMPOSED UPON HI M U/S 271(1)(C). THIS ORDER WAS SERVED UPON THE ASSESSEE ON 21.03.20 14. THEREAFTER, THE ASSESSEE HAS MADE ENQUIRY AND FILED APPLICATION FOR THE COPY OF THE ORDER. THESE ASPECTS HAVE MADE HIS APPEAL TIME BAR RED BY 765 DAYS. THE ASSESSEE PRAYED FOR CONDONATION OF DELAY. 3. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE OPPOSED THE PRAYER OF THE ASSESSEE. HE CONTENDED T HAT THE ASSESSEE SHOULD BE VIGILANT IN PROSECUTING THE INCOME-TAX LI TIGATION. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE IS AN O LD MAN, DERIVING INCOME FROM PENSION. HE IS NOT WELL-VERSED WITH TH E INCOME-TAX PROCEEDINGS AND PROBABLY NOT ASSESSABLE TO TAX AFTE R THIS YEAR WHEN HE RECEIVED VOLUNTARILY RETIREMENT ON LUMP-SUM BASIS. THE REVENUE HAS NOT FILED ANY REPLY TO THE AFFIDAVIT OF THE ASSESSE E OPPOSING THAT THE ORDER WAS DULY SERVED UPON THE ASSESSEE ON THE ADDR ESS GIVEN BY HIM. THE POSSIBILITY OF NON-SERVICE OF THE ORDER CANNOT BE RULED OUT. THEREFORE, WE FIND FORCE IN THE EXPLANATION OF THE ASSESSEE AND CONDONE THE DELAY IN FILING THE APPEAL. WE PROCEED TO DECIDE THE APPEAL ON MERIT. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 19.03.2008 DECLARING TOTAL INCO ME OF RS.91,567/-. ITA NO. 497 /RJT/2014 SHRI HARILAL SHANKERLAL RAVAL VS. ITO AY : 2007-08 - 3 - THE ASSESSEE WAS AN EMPLOYEE OF STATE BANK OF INDIA . HE OPTED FOR EXIT OPTION SCHEME. HE RECEIVED AN EX-GRATIA PAY MENT OF RS.2,78,893/- FROM STATE BANK OF INDIA. THE ASSESSE E CLAIMED EXEMPTION U/S 10(10C) OF THE INCOME-TAX ACT. THIS EXEMPTION WAS DENIED TO THE ASSESSEE AND HIS INCOME WAS DETERMINE D AT RS.3,70,856/. DISSATISFIED BY THE ASSESSMENT ORDER OF THE ASSESSI NG OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A). IT IS CONTENDED THAT AFTER THE DECISION OF BOMBAY HIGH CO URT IN THE CASE OF CIT VS. KOODATHIL KALLYATAN AMBUJAKSHAN, REPORTED I N (2009) 309 ITR 0113, THE ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE. THE LEARNED FIRST APPELLATE AUTHORITY HAS EXAMINED THE ISSUE ELABORATELY. IN PRINCIPLE, THE LEARNED FIRST APPELLATE AUTHORITY WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AS FAR AS THE RATIO OF LAW LAID DOWN IN THE JUDGMENT OF HONBLE BOMBAY HIGH COURT, BUT THE LEARNED CIT(A) IS OF THE OPINION THAT AS PER RULE 2BA OF THE INCOM E-TAX RULES, ONE OF THE CONDITIONS FOR AVAILING THE BENEFIT OF SECTION 10(10C) IS THAT THE BANK SHOULD REDUCE THE SANCTIONED STRENGTH OF THE P OST WHICH ARE ELIGIBLE UNDER THE EXIT OPTION SCHEME. THE LEARNED CIT(A) FURTHER OBSERVED THAT THE CIT(A)-VI, BARODA HAS MADE AN INQ UIRY FROM THE BANK ABOUT THE STATUS OF THE EMPLOYEES ELIGIBLE FOR EXIT OPTION SCHEME. LEARNED CIT(A) HAS REPRODUCED THOSE DETAILS ON PAGE NO.6 OF THE IMPUGNED ORDER AND THEREAFTER OBSERVED THAT DEC ISION OF HONBLE BOMBAY HIGH COURT IS DISTINGUISHABLE ON FACTS. IN THIS WAY, LEARNED CIT(A) HAS CONFIRMED THE DISALLOWANCE OF EXEMPTION CLAIMED U/S 10(10C) OF THE INCOME-TAX ACT. ITA NO. 497 /RJT/2014 SHRI HARILAL SHANKERLAL RAVAL VS. ITO AY : 2007-08 - 4 - 6. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE RELI ED UPON THE ORDER OF THE ITAT, RAJKOT BENCH IN THE CASE OF DILIPSINH J. BHATTI & OTHERS V/S. ACIT IN ITA NO.1269/RJT/2010 WHERE SIMILAR BE NEFIT WAS EXTENDED TO THE EX-EMPLOYEES OF THE STATE BANK OF S AURASHTRA. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ISSUE IN DISPUTE IS COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. KOODATHIL KALLYATAN AMBUJAKSHAN (SUPRA). THE LEARN ED FIRST APPELLATE AUTHORITY HAS CREATED DISTINCTION WITH RE GARD TO THE FACTS NARRATED IN THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT VIS--VIS THE FACTS IN THE CASE OF THE ASSESSEE. THE BASIC R EASON ASSIGNED BY THE LEARNED CIT(A) IS THAT NO POST WAS ABOLISHED FROM W HERE EMPLOYEES RETIRED UNDER EXIT OPTION SCHEME OF STATE BANK OF I NDIA. THIS CONCLUSION HAS BEEN DRAWN ON THE STRENGTH OF THE FO LLOWING DETAILS COLLECTED FROM THE ORDER OF THE CIT(A)-VI, BARODA I N THE CASE OF SHRI SURESH KANTILAL DOSHI FOR ASSESSMENT YEAR 2006-07. THESE DETAILS READ AS UNDER:- TOTAL NUMBER OF EMPLOYEES IN THE ELIGIBLE CADRES AS ON 31.03.2005 60266 TOTAL NUMBER OF EMPLOYEES RELEASED UNDER THE SSEOS IN FY 2005-06 1669 TOTAL NUMBER OF EMPLOYEES RELEASED UNDER THE SSEOS IN FY 2006-07 4353 TOTAL NUMBER OF EMPLOYEES RELEASED UNDER THE SSEOS IN FY 2007-08 274 ITA NO. 497 /RJT/2014 SHRI HARILAL SHANKERLAL RAVAL VS. ITO AY : 2007-08 - 5 - TOTAL NUMBER OF EMPLOYEES IN THE ELIGIBLE CADRES AS ON 31.03.2007 55599 TOTAL NUMBER OF EMPLOYEES IN THE ELIGIBLE CADRES AS ON 31.03.2008 57765 TOTAL NUMBER OF POSTS ABOLISHED IN THE IMPLEMENTATI ON OF THE SCHEME NIL 9. ON DUE CONSIDERATION OF THE ABOVE, WE ARE OF THE VIEW THAT INSTEAD OF REFERRING THESE BASIC DETAILS, THE LEARN ED REVENUE AUTHORITIES OUGHT TO HAVE CALLED FOR THE SCHEME FOR MULATED BY THE STATE BANK OF INDIA ITSELF. THE REVENUE AUTHORITIE S FURTHER OUGHT TO HAVE FIND-OUT WHETHER THE BENEFIT HAS BEEN DENIED T O OTHER SIMILARLY SITUATED EMPLOYEES OF SBI. IT IS ALSO PERTINENT TO MENTION HERE THAT THE BANK HAS NOT FILLED-UP THE POST UP TO 31.03.2008 OU T OF TOTAL NUMBER OF EMPLOYEES ELIGIBLE IN THE CADRES ON 31.03.2005. IN OTHER WORDS, CADRES STRENGTH OUT OF WHICH EMPLOYEES COULD OPT FOR EXIT WAS 60,266 AND AS ON 31.03.2008 THIS STRENGTH IS 57,765. MEANING THE REBY EVEN IF THE BANK HAS NOT INFORMED THE CIT(A)-VI, BARODA ABOUT T HE SPECIFIC ABOLISHMENT OF POST OF EMPLOYEE, NO RECRUITMENT HAS BEEN MADE. THE CADRE STRENGTH IS ON THE REDUCTION TREND. SIMILAR IS THE FACTS IN THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT. THERE A LSO THE HONBLE COURT HAS DRAWN INFERENCE FROM THE AVAILABLE MATERI AL. THE SCHEME APPEARS TO HAVE BEEN SILENT ON THIS ISSUE IN THAT J UDGMENT ALSO. THE ITAT, RAJKOT BENCH IN THE CASE OF DILIPSINH J. BHATT I (SUPRA) HAS CONSIDERED THE CIRCULAR OF CBDT AND JUDGMENT OF THE HONBLE BOMBAY HIGH COURT WHILE ALLOWING THE BENEFIT U/S 10(10C) TO THE EMPLOYEES OF STATE BANK OF SAURASHTRA. TAKING INTO CONSIDERA TION OF THESE DETAILS, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE DISALLOWANCE OF ITA NO. 497 /RJT/2014 SHRI HARILAL SHANKERLAL RAVAL VS. ITO AY : 2007-08 - 6 - EXEMPTION CLAIMED U/S 10(10C). LEARNED ASSESSING O FFICER IS DIRECTED TO GIVE EXEMPTION U/S 10(10C) TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 27.10.2015 SD/- SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD, DATED /10/2015 *BIJU T. ! / COPY OF ORDER FORWARDED TO:- 1. ! / APPELLANT- 2.#$ ! / RESPONDENT 3.&'& ( / CONCERNED CIT/DIT 4. (- / CIT (A) 5 .+,-#.. , , / DR, ITAT, RAJKOT 6 .-0123 / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) & ' / ITAT, RAJKOT