Satya Pal Singh, New Delhi V. ITO, New Delhi

ITA 6502/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7388 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-07-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 31-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHALINI VERMA
• Assessee Lawyers: B P ANTHWAL
• Keywords: Rectification of order; Benefit of exemption
• Section: 154

Judgement Text

ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.6502/DEL/2012 ASSESSMENT YEAR : 2004-05 SATYA PAL SINGH, VS INCOME TAX OFFICER, A-703, MANGLIK CO-OP GHS., WARD 46(1), PLOT NO. 25, SECTOR-6, NEW DELHI. DWARKA, NEW DELHI-110075 (PAN: AHIPS4386G) (APPELLANT) (RESPONDENT) APPE LLANT BY: SHRI B.P. ANTHWAL RESPONDENT BY : SMT. SHALINI VERMA, SR. DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT(A)-XXX, NEW DELHI DATED 31.10.2012 IN APPEAL N O. 444/2011-12 FOR AY 2004-05 BY WHICH APPEAL FILED U/S 250(6) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) HAS BEEN DISMISSED CONFIRMING A ND UPHOLDING THE ORDER OF THE AO DATED 11.3.2011 BY WHICH APPLICATION FOR REC TIFICATION FILED U/S 154 OF THE ACT HAS BEEN UPHELD AS JUSTIFIED. ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THI S APPEAL:- 1. THAT THE ASSESSING OFFICER HAS ERRED TO UNDERSTAND THE MISTAKE APPARENT FROM RECORD AND IGNORED THE FACTS RAIS E D BY THE ASSESSEE FOR RECTIFICATION U /S 154. WHICH IS BAD IN LAW AND FACTS OF THE CASE . 2 . T H A T TH E ASSESSING OFFICER HAS NO T EXERCISED SINCE 10 1 08 / 2006 TO 11 / 03 / 2011 T O DISPOSE TH E APPL I CATION OF TH E ASSESSEE DESPITE REPEAT E D REMINDER FROM TIM E TO TIME FROM THE ASSESSEE , AND NOW HAS DISPOSED THE APPLICATION WI THOUT UNDERSTANDING THE FACTS OF THE CASE AND PROVISIONS LAID DOWN IN THE INCOME-TA X A CT 1961 . WHICH IS BAD IN LAW AND F ACTS O F THE CASE. 3. T HAT THE ASSESSING OFFICER HAS NOT PROVIDED ANY PERSONAL HEARING BEFORE R EJ E CTION OF THE PLEA OF ASSESSEE AND PASSED THE ORDER IN HURRY. WHICH IS BAD IN LAW AND FACTS OF THE CASE. 4. T HAT THE ASSESSING OFFICER HAS PROLONGED THE CLAIM OF THE A SSESSEE AND TOOK MO RE THAN 4-5 YEARS TO DECIDE THE FATE OF APPLICATION FILED U / S 154 B Y THE ASSESSEE . WHICH IS BAD IN LAW AND FACTS OF THE CASE. 5. THAT THE RELIEF U/S 10(1OC) AND U/S 89 (1) SUPPOSED TO BE GIVEN EVEN THE SAME IS NOT CLAIMED BY THE ASSESSEE. THE A.O. SHOULD FOLLOW THE PROVISIONS OF THE INCOME-TAX ACT, AND GIVE THE RELIEF ACCORDING TO THE LAW NOT ONLY IN FAVOUR OF REVENUE BUT IN FAVOUR OF THE ASSESSEE ALSO. ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 3 6. THAT IN PRESENT CASE THE RELIEF FOR WHICH APPELL ANT WAS ENTITLED WAS NOT ALLOWED EVEN AFTER THE APPELLA NT HAS MOVED AND APPLICATION U/S 154 OF THE INCOME-TAX ACT. THE DEDUCTION ARE ON MERITS MAY PLEASE BE ALLOWED. 7. THE APPLICATION U/S 154 WAS FILED WITH IN PRESCRIBED TIME AND SAME SHOULD BE ENTERTAIN AND MERITS TO BE ALLOWED. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT THE ASSESSEE WAS WORKING IN BSES RAJDHANI POWER LTD. (FORMERLY D ELHI VIDYUT BOARD) AND OPTED FOR VOLUNTARY RETIREMENT SCHEME 2003 OFFE RED BY HIS EMPLOYER. THE ASSESSEE RECEIVED A SUM OF RS.13,73,667.16 INCL UDING EX GRATIA OF RS. 10,68,480 FROM HIS EMPLOYER IN DECEMBER 2003. THE ASSESSEE FILED A RETURN ON 30.10.2004 CLAIMING REFUND OF RS.11,906. SUBSEQ UENTLY, THE ASSESSEE CAME TO KNOW FROM SOME NEWSPAPER THAT HE IS ENTITLE D TO GET RELIEF U/S 10(10C) MORE THAN RS.5 LAKH AS HE CLAIMED IN HIS RE TURN OF INCOME. THEN THE ASSESSEE FILED A RECTIFICATION APPLICATION U/S 154 OF THE ACT BEFORE THE AO ON 10.08.2006 FOR RECTIFICATION OF MISTAKE APPARENT ON RECORD ON HIS PART FOR NOT CLAIMING EXEMPTION U/S 10(10C) OF THE ACT FOR M ORE THAN RS. 5 LAKH AS PER PREVAILING LAW OF THAT TIME. THE ASSESSEE HAD SUBMITTED THE DOCUMENTS AS DESIRED BY THE AO VIDE HIS LETTER DATED 17.3.201 0 AND 5.7.2010. FINALLY THE ITO WARD 46(1) CONSIDERED THE MATTER AND REJECT ED THE APPLICATION OF THE ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 4 ASSESSEE FOR RECTIFICATION VIDE HIS LETTER DATED 11 .3.2011. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHIC H WAS ALSO DISMISSED BY PASSING IMPUGNED ORDER. NOW, THE EMPTY HANDED ASSE SSEE IS BEFORE THIS TRIBUNAL WITH THE GROUNDS AS REPRODUCED HEREINABOVE . 4. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL INTER ALIA WRITTEN SYNOPSIS AND P APER BOOK FILED ON BEHALF OF THE ASSESSEE SPREAD OVER 63 PAGES AND ALSO CONSI DERED THE RATIO OF THE DECISIONS RELIED BY THE ASSESSEE AND THE REVENUE. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNDI SPUTEDLY THE ASSESSEE WAS AN EMPLOYEE OF STATE PUBLIC SECTOR UNDERTAKING AND HE RECEIVED AMOUNT OF RS.13,73,667.16 FROM HIS EMPLOYER ON VRS. THE C OUNSEL FURTHER SUBMITTED THAT IN THIS SITUATION, THE ASSESSEE WAS ENTITLED FOR RELIEF U/S 10(10C) FOR ANY AMOUNT RECEIVED/RECEIVABLE BY HIM A T THE TIME OF VOLUNTARY RETIREMENT. LD. COUNSEL FURTHER POINTED OUT THAT T HE AO REJECTED APPLICATION OF THE ASSESSEE FOR RECTIFICATION WITHOUT CONSIDERI NG THE RATIO OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS P. SURENDRA PRABHU (2005) 279 ITR 402 (KARNATAKA) . 6. LD. COUNSEL OF THE ASSESSEE ALSO SUBMITTED THAT THE ASSESSEE HAD GIVEN EVERY TIME A SET OF RELEVANT DOCUMENTS AND EXPLAINE D HIS VERSION REGARDING MISTAKE APPARENT FROM RECORD WHILE FILING THE INCOM E TAX RETURN, WHICH WAS ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 5 VERBALLY ACCEPTED BY THE AO AND ASSESSEE WAS ASSURE D THAT THE AO WILL TAKE NECESSARY ACTION BUT THE AO KEPT THE SAME PENDING F OR A LONG TIME AND SUBSEQUENTLY AS PER ADVICE AND DIRECTION OF INCOME TAX OMBUDSMAN, THE AO DECIDED AND REJECTED THE APPLICATION OF THE ASSE SSEE ON 11.3.2011 WITHOUT ANY JUSTIFIED AND COGENT REASONING. LD. CO UNSEL OF THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF K.R. ALGAPPAN & OTHERS VS ACIT (2011) 332 ITR 5 17 (MADRAS) AND SUBMITTED THAT WHEN THE MATTER IS FINALLY DECIDED B Y HONBLE SUPREME COURT AND THE PETITIONERS/ASSESSEES WERE HELD ENTITLED TO CLAIM EXEMPTION U/S 10(10C) OF THE ACT, THEN THE ORDERS OF THE AO REJEC TING THE APPLICATION FOR RECTIFICATION OF THE ASSESSMENT ORDERS HAD TO BE SE T ASIDE. LD. COUNSEL OF THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CHANDRA RANGATHAN & OTHER VS CIT AND THE DECISION OF ITAT, MUMBAI BENCH K IN THE CASE OF VAISHALI A. SHELAR VS ACIT (2007) 14 SOT 407 (MUMBAI) AND SUBMITTED THAT THE AMOUNT RECEIVED BY RETIRING EMPLOYEES OF THE RBI OPTING FOR EARLY RETI REMENT SCHEME ARE ELIGIBLE FOR EXEMPTION FROM INCOME TAX U/S 10(10C) OF THE AC T AND THE ASSESSEE IS ALSO ENTITLED TO RELIEF U/S 89 OF THE ACT IN RESPEC T OF THE SUMS WHICH ARE IN EXCESS OF THE EXEMPTION GRANTED. LD. COUNSEL OF TH E ASSESSEE VEHEMENTLY CONTENDED THAT THE AO OUGHT TO HAVE ALLOWED APPLICA TION OF THE ASSESSEE FOR ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 6 RECTIFICATION U/S 154 OF THE ACT BECAUSE THE SAME W AS PASSED WITHOUT CONSIDERING THE RELEVANT LEGAL POSITION AND RATIO O F THE DECISIONS OF HONBLE SUPREME COURT AND VARIOUS HIGH COURTS ON THE ISSUE. 7. REPLYING TO THE ABOVE CONTENTION OF THE ASSESSEE , LD. DR POINTED OUT THAT AS PER PROVISIONS OF SECTION 10(10C) OF THE AC T, ANY AMOUNT RECEIVED OR RECEIVABLE BY AN EMPLOYEE OF A PUBLIC SECTOR COMPAN Y ON HIS VOLUNTARY RETIREMENT IS NOT SUBJECT TO INCOME TAX TO THE EXTE NT SUCH AMOUNT DOES NOT EXCEED RS. 5 LAKH. THE DR FURTHER POINTED OUT THAT THE MEANING AND ESSENCE OF THIS PROVISION CLEARLY SHOWS THAT THE AMOUNT REC EIVED BY AN EMPLOYEE OF A PUBLIC SECTOR UNDERTAKING IS SUBJECT TO EXEMPTION U /S 10(10C) OF THE ACT SUBJECT TO LIMIT OF RS.5 LAKH WHICH WAS GRANTED BY THE AO FOR THE ASSESSEE IN THE ASSESSMENT ORDER PASSED U/S 143(1) OF THE ACT A ND, THEREFORE, THERE WAS NO MISTAKE APPARENT FROM THE RECORD AND THUS, THE A O WAS RIGHT AND JUSTIFIED IN REJECTING THE APPLICATION OF THE ASSESSEE FILED U/S 154 OF THE ACT AND CIT(A) WAS ALSO RIGHT IN UPHOLDING THE SAME ORDER. THE DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND CONTENDED THAT WHEN THERE IS A LIMIT PRESCRIBED BY THE STATUTORY PROVISIONS OF THE ACT F OR GRANT OF EXEMPTION U/S 10(10C), THEN THE REVENUE AUTHORITIES ARE NOT ENTIT LED TO GRANT OF EXCESSIVE EXEMPTION BEYOND THE LIMIT PRESCRIBED BY THE ACT. ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 7 8. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS AN D CONTENTIONS AND CAREFUL PERUSAL OF THE RELEVANT MATERIAL AND DECISI ONS RELIED BY BOTH THE PARTIES, AT THE OUTSET, WE NOTE THAT ADMITTEDLY, TH E ASSESSEE APPELLANT OPTED FOR SPECIAL VOLUNTARY RETIREMENT SCHEME 2003 OFFERE D BY HIS EMPLOYER AND THE ASSESSEE RECEIVED A SUM OF RS.13,73,667.16 AND THE ASSESSEE CLAIMED EXEMPTION U/S 10(10C) OF THE ACT CLAIMING EXEMPTION OF RS. 5 LAKH WHICH WAS ALLOWED BY THE AO. SUBSEQUENTLY, THE ASSESSEE FILED AN APPLICATION FOR RECTIFICATION U/S 154 OF THE ACT ON THE BASIS OF NE WSPAPER INFORMATION PRESUMING THAT HE IS ENTITLED TO GET EXEMPTION U/S 10(10C) OF THE ACT FOR THE AMOUNT RECEIVED UNDER VOLUNTARY RETIREMENT SCHEME F OR THE AMOUNT OF MORE THAN RS. 5 LAKH. 9. COMING TO THE DECISIONS RELIED BY THE ASSESSEE FROM THE DECISIONS OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS P. SURENDRA PRABHU, WE OBSERVE THAT THEIR LORDSHIPS HELD THAT THE ASSESSEE , THE EMPLOYEE OF THE BANK WAS NOT ONLY ENTITLED TO THE BENEFIT OF EXEMPTION U /S 10(10C) OF THE ACT TO THE EXTENT PRESCRIBED IN THE PROVISIONS ITSELF BUT FOR ANY AMOUNT OVER AND ABOVE THE PRESCRIBED LIMIT UNDER THE AFORESAID PROV ISIONS, THE ASSESSEE WAS ALSO ENTITLED TO GET RELIEF U/S 89(1) OF THE ACT R /W RULE 21A OF THE INCOME TAX RULES 1962. ON CAREFUL READING OF THIS JUDGMEN T, WE ARE UNABLE TO SEE ANY LEGAL PROPOSITION OR DIRECTION THAT THE EMPLOYE E OF A PUBLIC SECTOR ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 8 UNDERTAKING OR ANY OTHER EMPLOYEE IS ENTITLED FOR B ENEFIT U/S 10(10C) OF THE ACT BEYOND THE PRESCRIBED LIMIT I.E. RS. 5 LAKH AS MENTIONED IN THE RELEVANT PROVISIONS. THEREFORE, WE RESPECTFULLY HOLD THAT B ENEFIT OF THE RATIO OF THIS DECISION IS NOT AVAILABLE FOR THE ASSESSEE IN THE P RESENT CASE. ON CAREFUL READING OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CHANDRA RANGATHAN & OTHER VS CIT (SUPRA) AND THE DECISION O F ITAT, MUMBAI BENCH K IN THE CASE OF VAISHALI A. SHELAR VS ACIT (SUPRA), WE OBSERVE THAT THAT THE SAME LEGAL PROPOSITION HAS BEEN REITE RATED THAT THE PAYMENT RECEIVED BY AN EMPLOYEE UNDER OPTIONAL EARLY RETIRE MENT SCHEME/VRS IS EXEMPTED U/S 10(10C) OF THE ACT UPTO A SUM OF RS. 5 LAKH. IN THIS SITUATION WHEN THE AO HAS ALREADY GRANTED EXEMPTION OF RS. 5 LAKH U/S 10(10C) OF THE ACT IN THE ASSESSMENT ORDER PASSED U/S 143(1) OF TH E ACT, THEN IT CANNOT BE SAID THAT THERE WAS AN APPARENT MISTAKE IN THE ASSE SSMENT ORDER WHICH WAS REQUIRING RECTIFICATION US/ 154 OF THE ACT AND IN T HIS SITUATION, THE AO WAS JUSTIFIED IN REJECTING THE APPLICATION OF THE ASSES SEE FOR RECTIFICATION. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER DATED 11.3.2011 WAS JUSTIFIED AS THERE WAS NO MISTAKE APPARENT FROM THE RECORD AND THE CIT(A) WAS RIGHT IN REJECTING THE APPEAL OF THE ASS ESSEE. ACCORDINGLY, ON THE BASIS OF FOREGOING DISCUSSION, WE REACH TO A CO NCLUSION THAT ALL THE ITA NO. 6502/DEL/2012 ASSTT.YEAR: 2004-05 9 GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE D EVOID OF MERITS AND DESERVE TO BE DISMISSED AND WE DISMISS THE SAME. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED ON THE LINES AS DISCUSSED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 01.09.2014. SD/- SD/- (S.V. MEHROTRA) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 1 ST SEPTEMBER 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. COMMISSIONER OF INCOME TAX(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR