SMT. AMBIKA JYOTI DATTA, Jaipur V. ITO, Jaipur

ITA 766/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5450 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Keywords: Bonafide belief

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 766/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SMT. AMBIKA JYOTI DATTA 21/233, KAVERI PATH, MANSAROVAR JAIPUR CUKE VS. THE ITO WARD- 1 (3) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AFDPD 9826 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI MANISH AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27/01/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 03 /03/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 18-07-2013 FOR THE ASSESSMEN T YEAR 2008-09 WHEREIN FOLLOWING GROUNDS ARE RAISED. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S 10(10B) OF THE I.T. ACT, 1961 AMOUNTI NG TO RS. 1,97,840/- ARBITRARILY. ITA NO. 766/JP/2013 SMT. AMBIKA JYOTI DATTA VS. ITO , WARD- 1 (3), JAI PUR . 2 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN IGNORI NG THE EVIDENCES ADDUCED AND HAS CONFIRMED THE DISALLOWANC E OF DEDUCTION ON THE BASIS THAT THE APPELLANTS WORK WA S TEMPORARY IN NATURE AND HENCE CESSATION OF WORK DOE S NOT AMOUNT TO RETRENCHMENT. HENCE, SUCH AN OBSERVATION BEING CONTRARY TO THE FACTS, THE DEDUCTION OF RS. 1,97,84 0/- DESERVES TO BE ALLOWED. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 2-07-2008 DECLARING HER TOTAL INCOME AT RS. 1,44,063/-. THE AO OBSERVED THAT THE ASSESSEE IS A CONTRACTUAL SERVICE PROVIDER TO CARE INDIA, AN INTE RNATIONAL NGO SPONSORED BY THE GOVT. OF USA. SHE WAS EMPLOYED BY CARE INDIA ON CONTRACTUAL EMPLOYMENT FOR SPECIFIED PERIOD WHICH W AS RENEWABLE AT THE OPTION OF CARE INDIA. THE AO OBSERVED THAT HER SERV ICES WERE DISCONTINUED CONSEQUENT TO THE EXPIRY OF THE CONTRA CTED PERIOD. SHE WAS NOT TERMINATED WITHIN THE CONTRACTED PERIOD WHICH I S NOT COVERED UNDER THE INDUSTRIAL DISPUTES ACT, 1947 . THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS NOT INCLUDED THE TAXABLE INCOME ARISIN G OUT OF THIS SETTLEMENT OF THE ORIGINAL EMPLOYMENT CONTRACT, THOUGH TAX OF RS. 50,010/- WAS DEDUCTED AT SOURCE. THE ASSESSEE SUBMITTED THAT SHE HAS FILED THE RETURN ON THE BASIS OF THE FORM NO. 16 ISSUED BY CARE INDIA U NDER A BONAFIDE BELIEF THAT TAXABLE INCOME IS INCLUDED AND EMPLOYER HAD NO T ISSUED ANY SEPARATE ITA NO. 766/JP/2013 SMT. AMBIKA JYOTI DATTA VS. ITO , WARD- 1 (3), JAI PUR . 3 FORM NO. 16 FOR THE PAYMENT MADE IN APRIL 2017. HOW EVER, AFTER RAISING THE ENQUIRES BY THE AO, THE ASSESSEE FILED THE REVI SED COMPUTATION SHOWING TOTAL TAXABLE INCOME AT RS. 3,90,409/- AS A GAINST RS. 1,44,063/- DECLARED IN THE ORIGINAL RETURN WHEREIN THE AO OBSE RVED THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 10(10B) OF THE ACT IN RE SPECT OF RETRENCHMENT BENEFIT AMOUNTING TO RS. 1,97,840/- BECAUSE OF TERM INATION OF CONTRACTUAL EMPLOYMENT. ACCORDING TO THE AO, THE CLAIM MADE BY THE ASSESSEE AS TO RETRENCHMENT IS NOT COVERED UNDER INDUSTRIAL DISPUT ES ACT, 1947 WHICH WAS DISALLOWED AND ADDED THE SAME TO THE TOTAL INCO ME OF THE ASSESSEE. 2.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) WHO UPHELD THE DISALLOWANCE MADE BY THE AO BY FOLLO WING OBSERVATIONS. 4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER. IT IS SEEN THAT THE CLAIM OF THE APPELLANT HAS BEEN DENIE D ON THE GROUND THAT M/S. CARE IS A INTERNATIONAL NGO AND IS NOT CO VERED UNDER THE INDUSTRIAL DISPUTES ACT, 1947. MOREOVER, AS PER THE TERMS OF EMPLOYMENT CONTRACT, THE ASSESSEE'S SERVICES WERE F OR A LIMITED PERIOD, RENEWABLE AT THE OPTION OF THE EMPLOYER. HE R SERVICES WERE TERMINATED SUBSEQUENT TO THE EXPIRY OF THE SPECIFIE D PERIOD. THE SERVICES WERE NOT WITHIN THE CONTRACT PERIOD. MOREO VER, THE EMPLOYER ITSELF HAD INCLUDED THE AMOUNT IN THE APPE LLANTS TAXABLE INCOME. THE CLAIM OF THE APPELLANT IS THAT EVEN IF HER CASE IS NOT COVERED UNDER THE INDUSTRIAL DISPUTES ACT, 1947, IT IS COVERED BY THE LAST I.E. ANY AWARD/ CONTRACT OF SERVICES OR OT HERWISE, AT THE TIME OF RETRENCHMENT. 4. THE CLAIM OF THE APPELLANT DIES NOT APPEAR TO BE CORRECT. EVEN IF IT IS PRESUMED THAT THE CASE OF TH E APPELLANT IS ITA NO. 766/JP/2013 SMT. AMBIKA JYOTI DATTA VS. ITO , WARD- 1 (3), JAI PUR . 4 COVERED UNDER THE INDUSTRIAL DISPUTES ACT, 1957, TH E NATURE OF HER JOB DOES NOT QUALIFY FOR EXEMPTION U/S 10(10B). IT IS NOTICED THAT FROM THE VERY BEGINNING HER WORK WAS TEMPORARY IN N ATURE AND HENCE CESSATION OF SUCH WORK DOES NOT AMOUNT TO RET RENCHMENT, AS HELD BY THE APEX COURT IN THE CASE OF ESCORTS LTD. (11 HON'BLE SUPREME COURT 521). IT IS FURTHER NOTED THAT IMMEDI ATELY AFTER THIS SO-CALLED RETRENCHMENT IN APRIL, 2007, THE APPELLAN T GOT FRESH APPOINTMENT FROM CARE INTERNATIONAL IN THE MONTH OF JUNE, 2007 ITSELF . IN VIEW OF THESE FACTS, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE AO. IN THE RESULT, THE APPEAL IS DISMISSED ON THIS POINT. 2.3 BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) , THE ASSESSEE IS BEFORE ITAT. 2.4 DURING THE COURSE OF HEARING, THE LD. AR CONTEN DS THAT FROM THE PLAIN READING OF SECTION, IT CLEARLY REVEALS THAT ANY COMPENSATION RECEIVED BY A WORKMAN UNDER THE INDUSTRIAL DISPUTE ACT, 1947, OR ALSO UNDER ANY AWARD, CONTRACT OF SERVICE OR OTHERWISE A T THE TIME OF RETRENCHMENT IS COVERED UNDER THIS SECTION. THUS SC OPE OF THIS SECTION IS VERY WIDE, IT IS NOT ONLY INCLUDE THE WORKMAN UNDER THE INDUSTRIAL DISPUTE ACT, 1947 BUT ALSO INCLUDES WORKMAN UNDER ANY OTHER ACT OR RULES, UNDER ANY STAND BY ORDERS, UNDER ANY AWARD, CONTRACT OF S ERVICE OR OTHERWISE, THUS COMPENSATION RECEIVED BY THE ASSESSEE UNDER TH E CONTRACT OF SERVICE IS DULY ELIGIBLE FOR DEDUCTION U/S 10(10B). THE ALL EGATION OF AO THAT THE CARE INDIA IS NOT COVERED BY THE INDUSTRIAL DISPUTE ACT, 1947 IS MISINTERPRETATION OF LAW, THUS THE ASSESSEE DULY IS ELIGIBLE FOR CLAIMING ITA NO. 766/JP/2013 SMT. AMBIKA JYOTI DATTA VS. ITO , WARD- 1 (3), JAI PUR . 5 DEDUCTION U/S 10(10B) OF THE I.T. ACT, 1961. FURTHE R THE EXPLANATION (A) CLEARLY STATES THAT COMPENSATION RECEIVED AT THE TI ME OF CLOSURE OF UNDERTAKING IS DEEMED TO BE THE RETRENCHMENT COMPEN SATION. IN THE CASE OF ASSESSEE FROM THE TERMINATION LETTER DATED 14-04 -2007, IT IS CLEARLY STATED THAT DUE TO THE CLOSURE OF THE PROJECT, THE SERVICES OF THE ASSESSEE WAS TERMINATED. THUS THE COMPENSATION RECEIVED BY A SSESSEE OF RS. 1,97,840/- IS THE RETRENCHMENT COMPENSATION AND ACC ORDINGLY ELIGIBLE FOR EXEMPTION. 2.5 THE LD. DR CONTENDS THAT THE ASSESSEE WAS A TEM PORARY CONTRACTUAL EMPLOYEE AND AS PER TERMS OF SERVICES, NO RETRENCHM ENT COMPENSATION WAS PAYABLE TO HER. IN THE RETURN OF INCOME, NO CLA IM U/S 10(10B) WAS FILED BY THE ASSESSEE . THEREAFTER, THE DEDUCTION H AS BEEN SOUGHT TO BE CLAIMED ON THE BASIS OF THE REVISED COMPUTATION AND REVISED SALARY CERTIFICATE. THE LD. DR CONTENDS THAT SINCE THE SAI D NGO IS NOT COVERED UNDER THE INDUSTRIAL DISPUTES ACT, 1947, THE DEDUCT ION U/S 10(10B) CANNOT BE ALLOWED TO THE ASSESSEE. THE LD. DR FURTHER RELI ED ON THE ORDERS OF THE LOWER AUTHORITIES. 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN MY CONSIDERED VIEW, THE LD. CIT(A) HAS RIGHTLY DENIED THE CLAIM OF RETRENCHMENT TO THE ASSESSEE U/ S 10(10B) OF THE I.T. ITA NO. 766/JP/2013 SMT. AMBIKA JYOTI DATTA VS. ITO , WARD- 1 (3), JAI PUR . 6 ACT. IT IS NOT DISPUTED THAT THE ASSESSEES EMPLOYM ENT WAS ONLY FOR A LIMITED PERIOD AND RENEWAL AT THE OPTION OF THE EMP LOYER. THE SERVICES WERE ALSO TERMINATED AFTER A SPECIFIED PERIOD AND N OT WITHIN THE CONTRACT PERIOD. IN VIEW THEREOF, I FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH IS UPHELD. THUS THE APPEAL OF THE ASSESSEE IS DISMISSED. 3.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 / 0 3/2016 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03 /03/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. AMBIKA JYOTI DATTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1 (3), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 766/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR