Shri Mankeshwar Nath Singhal, Agra V. I.T.O.-2(4), Agra

ITA 538/AGR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0394 (ITAT-AGRA)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: R C TOMAR I T P
• Keywords: Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 538/AGRA/2012 ASSTT. YEAR : 2007-08 SHRI MANKESHWAR NATH SINGHAL, VS. INCOME-TAX OFF ICER, 45, MEENA ENCLAVE, DAYALBAGH, 2(4), AGRA. AGRA (PAN: AQDPS 4782 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.C. TOMAR, I.T.P. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 14.02.2013 DATE OF PRONOUNCEMENT OF ORDER : 22.02.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A)-I, AGRA DATED 07.06.2012 FOR THE ASSESSMENT YEAR 2007- 08 ON THE FOLLOWING GROUNDS: 1. THAT THE LEARNED CIT(A)-I, AGRA HAS ERRED IN LA W AND ON FACTS IN UPHOLDING DISALLOWANCE OF EXEMPTION OF RS. 5,00,000/- CLAIMED UNDER SECTION 10(10C) OF INCOME TAX ACT. 2. THAT THE LEARNED CIT(A)-I, AGRA HAS ERRED IN L AW AND ON FACTS IN HOLDING THAT THE EXIST OPTION SCHEME DOE S NOT SATISFY THE CONDITIONS LAID DOWN UNDER SECTION 10(10C) READ WIT H RULE 2BA. 3. THAT THE LEARNED CIT(A)-I, AGRA HAS ERRED IN L AW AND ON FACTS IN INTERPRETING WRONGLY THE DECISION OF ITAT, AHMEDABAD IN THE CASE OF PANDYA VINOD CHANDRA BHOGILAL VS. ITO REPOR TED IN (2010) ITA NO. 538/AGRA/2012 2 045 DTR 01105; 037 (II) ITCL 0229, (2010) 133 TTJ 0 253 RELIED BY THE APPELLANT BEFORE CIT(A) WHEREAS: I) THE FACTS OF APPELLANTS CASE ARE SIMILAR TO THO SE OF PANDYA VINOD CHANDRA BHOGILAL AND HENCE CASE OF THE APPELLANT IS SQUARELY COVERED BY THE DECISION OF IT AT. II) THE ABOVE DECISION IS BASED ON THE MAIN ISSUE O F THE DISALLOWANCE OF CLAIM UNDER SECTION 10(10C) OF THE ACT BECAUSE THE SCHEME FOR VRS IS NOT IN ACCORDANCE WITH RULE 2 BA. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE HAD BEEN WORKING IN STATE BANK OF INDIA AS ASSISTANT MANAGER, WHICH COMES UND ER THE CATEGORY OF JUNIOR MANAGEMENT AND HE TOOK VOLUNTARY RETIREMENT FROM SE RVICES OF STATE BANK OF INDIA, AGRA UNDER THE EXIT OPTION SCHEME DATED 29.0 4.2005. THIS SCHEME WAS FURTHER MODIFIED VIDE LETTER DATED 15.09.2005 OF ST ATE BANK OF INDIA BY EXTENDING THIS SCHEME TO ALL THE OFFICERS IN JUNIOR MANAGEMEN T, I.E., JMGS, GRADE-I, TO WHICH THE ASSESSEE BELONGS. ON TAKING VOLUNTARY RETIREMEN T, THE ASSESSEE HAS GOT PAYMENT OF RS.5,35,252/-, OUT OF WHICH HE CLAIMED EXEMPTION U/S. 10(10C) OF THE IT ACT AMOUNTING TO RS.5,00,000/-. THE AO MADE ENQUIRIES F ROM THE STATE BANK OF INDIA, AGRA AND IT WAS INFORMED THAT THE ASSESSEE TOOK VOL UNTARY RETIREMENT UNDER THE EXIST OPTION SCHEME FOR WHICH THE ABOVE AMOUNT HAS BEEN PAID AND THE COPY OF SCHEME WAS ALSO PROVIDED. THE AO WAS OF THE VIEW TH AT IN THE SCHEME, IT HAS BEEN CLEARLY MENTIONED THAT THE PROPOSED SCHEME DOES NOT APPLY WITH RULE 10(10C) OF THE IT ACT AND NO BENEFIT IS INTENDED AS SUCH. THE AO ON THE BASIS OF INFORMATION COLLECTED FROM THE BANK, DISALLOWED THE CLAIM OF AS SESSEE U/S. 10(10C) AND MADE ITA NO. 538/AGRA/2012 3 THE ADDITION OF RS.5,00,000/-. THE ADDITION WAS CHA LLENGED BEFORE THE LD. CIT(A) AND ASSESSEE CITED MANY DECISIONS OF THE TRIBUNAL A ND OTHER HIGH COURTS TO SHOW THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER T HE ABOVE PROVISION. THE SUBMISSION OF THE ASSESSEE IS INCORPORATED IN THE A PPELLATE ORDER. THE LD. CIT(A) CONSIDERED THIS ISSUE IN DETAIL AND DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE IT WAS CLEARLY EXPLAINED THAT THE VACANCIES CREATED BY THE EXIT OPTION SCHEME ARE ALSO COUNTED FOR FILLING UP OF THE VACAN CIES, THEREFORE, THE SCHEME IS NOT BENEFICIAL FOR THE ASSESSEE. ACCORDING TO THE L D. CIT(A), EXIT OPTION SCHEME UNDER WHICH THE ASSESSEE HAS TAKEN VOLUNTARY RETIRE MENT, IT HAS BEEN CLEARLY FOUND BY HIM THAT THE SCHEME DOES NOT COMPLY WITH RULE 2B A AS MUCH AS IN THE SAID RULE, VACANCY CAUSED BY VOLUNTARY RETIREMENT SCHEME IS NOT TO BE FILLED UP, HAS NOT BEEN COMPLIED WITH IN THIS SCHEME AS CLEARLY PROVID ED IN CLAUSE 14 OF THIS SCHEME AND ACCORDINGLY, ADDITION OF RS.5,00,000/- WAS CONF IRMED AND THE APPEAL OF THE ASSESSEE WAS DISMISSED. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND RELIED UPON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SURENDRA PRABHU P., 279 ITR 402 AND ALSO RELIED UPON THE ORDERS OF ITAT CHANDIGARH BENCH IN THE CASE OF RAJINDER VIJ V S. ITO DATED 11.05.2012 IN ITA NO. 308/2012, IN THE CASE OF MANMOHAN SINGH BED I VS. ACIT DATED ITA NO. 538/AGRA/2012 4 26.07.2012 IN ITA NO. 507/2012 AND IN THE CASE OF B IKRAM JIT PASSI VS. ITO DATED 09.11.2011 IN ITA NO. 925/2012, IN WHICH THE ASSESS EES WERE WORKING UNDER STATE BANK OF INDIA AND THE CLAIM OF ASSESSEES U/S. 10(10 C) HAVE BEEN ALLOWED. COPIES OF THE ORDERS ARE PLACED ON RECORD. HE HAS ALSO REL IED UPON THE DECISION OF ITAT, AHMEDABAD BENCH IN THE CASE OF PANDYA VINODCHANDRA BHOGILAL VS. ITO REPORTED IN 45 DTR 105, IN WHICH ALSO THE ASSESSEE WAS DEPUT Y MANAGER IN STATE BANK OF INDIA AND CLAIM OF ASSESSEE HAS BEEN ALLOWED U/S. 1 0(10C) OF THE IT ACT. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD AND FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASS ESSEE BY THE ABOVE DECISIONS OF VARIOUS BENCHES OF ITAT, I.E., CHANDIGARH BENCH AND AHMEDABAD BENCH NOTED ABOVE, IN WHICH SIMILAR CLAIM OF THE ASSESSEE HAS B EEN ALLOWED U/S. 10(10C) OF THE IT ACT WHILE THEY WERE WORKING IN STATE BANK OF IND IA AND OPTED FOR VOLUNTARY RETIREMENT UNDER THE EXIST OPTION SCHEME. SINCE THE CO-ORDINATE BENCHES OF TRIBUNAL HAVE ALLOWED SIMILAR CLAIM OF ASSESSEE IN THE SIMILAR SCHEME OPTED BY THE ASSESSEE, THEREFORE, THE LD. CIT(A) SHOULD HAVE ALL OWED THE CLAIM OF ASSESSEE. FURTHER WE FIND THAT THE LD. CIT(A) MAINLY REJECTED THE CLAIM OF ASSESSEE BECAUSE ACCORDING TO HIM EXIT OPTION SCHEME, UNDER WHICH TH E ASSESSEE HAD TAKEN VOLUNTARY RETIREMENT, DOES NOT COMPLY WITH RULE 2BA OF THE IT RULES BECAUSE THE ITA NO. 538/AGRA/2012 5 VACANCIES CREATED BY THE EXIT OPTION SCHEME ARE ALS O COUNTED FOR FILLING UP OF THE VACANCIES. HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SURENDRA PRABHU P. (SUPRA) IN PARA 48 HELD THAT RULE 2BA CANNOT OVE RRIDE THE PROVISIONS OF THE ACT UNDER WHICH THE ASSESSEE HAS MADE A CLAIM. PARA 48 OF THE JUDGMENT AFORESAID IS REPRODUCED AS UNDER : RULE 2BA OF THE RULES PRESCRIBES REQUIREMENTS FOR A SCHEME OF VOLUNTARY RETIREMENT. IT IS A RULE FRAMED FOR THE P URPOSE OF WORKING OUT THE PROVISIONS OF SECTION 10(10C) OF THE ACT AN D IT CANNOT OVERRIDE THE PROVISIONS OF THE ACT AND IT IS THE SECTION WHI CH PREVAILS OVER THE RULES. THE SECTION SPECIFICALLY SPEAKS OF VOLUNTARY RETIREMENT / TERMINATION OF AN EMPLOYEE IN ACCORDANCE WITH THE S CHEME TO BE ENTITLED FOR BENEFIT OF EXEMPTION UNDER THE SECTION AND MERELY BECAUSE RULE 2BA OF THE RULES DOES NOT SPEAK OF TERMINATIO N, THE ASSESSING AUTHORITY COULD NOT HAVE CONCLUDED THAT THE ASSESSE E IS NOT ENTITLED TO CLAIM RELIEF UNDER SECTION 89(1) OF THE ACT. FURTHE R, THE FALLACY IN THE REASONING AND CONCLUSION OF THE ASSESSING AUTHORITY IS, IF THE RULE DOES NOT SPEAK OF TERMINATION BUT ONLY SPEAKS OF VOLU NTARY RETIREMENT AND SEPARATION, THEN THE ASSESSING AUTHORITY COULD NOT HAVE GRANTED EXEMPTION UNDER SECTION 10(10C) OF THE ACT ON THE A MOUNTS RECEIVED BY THE ASSESSEE FROM HIS EMPLOYER. THIRDLY, THERE I S NO ESSENTIAL DIFFERENCE BETWEEN THE EXPRESSIONS VOLUNTARY RETIR EMENT/SEPARATION AND TERMINATION. THEREFORE, IN OUR VIEW, THE APPRO ACH OF THE ASSESSING AUTHORITY APPEARS TO BE TOO HYPERTECHNICA L AND, THEREFORE, CANNOT BE ACCEPTED. 5. THE OBJECTION OF THE LD. CIT(A) HAS BEEN CONSIDE RED FAVOURABLY BY THE HONBLE KARNATAKA HIGH COURT. THEREFORE, NOTHING SU RVIVES IN FAVOUR OF THE REVENUE DEPARTMENT TO CONFIRM THE ADDITION IN THE C ASE OF ASSESSEE. WE, THEREFORE, FOLLOWING THE VARIOUS DECISIONS OF DIFFERENT BENCHE S OF TRIBUNAL AND THE DECISION OF KARNATAKA HIGH COURT, HOLD THAT THE ASSESSEE IS ENT ITLED FOR EXEMPTION U/S. 10(10C) ITA NO. 538/AGRA/2012 6 OF THE IT ACT. THE ORDERS OF THE AUTHORITIES BELOW ARE, ACCORDINGLY, SET ASIDE AND THE ADDITION OF RS.5,00,000/- IS ACCORDINGLY DELETE D. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY