M/s. Shri Shankarsingh C. Thakur, Aurangabad V. Commissioner of Income-tax,

ITA 833/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1111 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 24-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Salary income
• Section: 143(3); 10(14); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO. 833 /PN/20 1 4 / ASSESSMENT YEAR : 20 09 - 1 0 SHRI SHANKARSINGH C. THAKUR, PLOT NO.154, N - 5, CIDCO, AURANGABAD 431002 . / APPELLANT PAN: A BRPT2717K VS. THE COMMISSIONER OF INCOME TAX, AURANGABAD . / RESPONDENT / APPELLANT BY : S HRI PRAMOD S. SHINGTE / RESPONDENT BY : S HRI S.K. RASTOGI, CIT / DATE OF HEARING : 11 . 0 8 .201 6 / DATE OF PRONOUNCEMENT: 12 . 0 8 .201 6 / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF C I T , AURANGABAD , DATED 24 . 02 .20 1 4 RELATING TO ASSESSMENT YEAR 20 09 - 1 0 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) . 2 . THE ASSES SEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO . 833 /PN/20 1 4 SHRI SHANKARSINGH C. THAKUR 2 01. THE ASSESSMENT ORDER PASSED BY THE LEARNED ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 CANNOT BE SAID AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE LEARNED COMMISSIONER OF INCOME TAX, AURANGABAD IS NOT JUSTIFIED IN REVISING THE ORDER PASSED U/S 143(3) AND MAKING AN ADDITION OF RS.3,89,838/ - ON ACCOUNT OF CONVEYANCE ALLOWANCE. HENCE, LEARNED ASSESSING OFFICER MAY BE DIRECTED TO DELETE THE ADDITION OF RS.3,89,838/ - . 02. S UCH OTHER ORDERS BE PASSED AS MAY BE DEEMED FIT AND PROPER. 3. THE ISSUE ARISING IN THE PRESENT APPEAL FILED BY THE ASSESSEE IS AGAINST THE JURISDICTION EXERCISED BY THE COMMISSIONER OF INCOME TAX, AURANGABAD UNDER SECTION 263 OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DISCLOSING TOTAL INCOME OF RS. 14,92,780/ - . THE SAID RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1)(A) OF THE ACT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS FOR TH E REASON THAT THE ASSESSING OFFICER SHOULD EXAMINE THE SOURCE OF CASH DEPOSITS ABO VE THE THRESHOLD LIMITS IN THE SAVINGS BANK ACCOUNT. THE ASSESSING OFFICER THEREFORE, ISSUED NOT ICE UNDER SECTION 143(2) OF THE ACT AND DURING THE COURSE OF ASSESSMENT PROCE EDINGS, IT WAS NOTED THAT THE ASSESSEE WAS DEVELOPMENT OFFICER WITH LIC OF INDIA AND HAD SHOWN SALARY INCOME ONLY. THE ASSESSEE WAS REQUIRED TO FURNISH THE SOURCE OF CASH DEPOSIT IN THE SAVINGS BANK ACCOUNT AT RS. 13,97,150/ - WITH AXIS BANK LTD. WITH DOCUM ENTARY EVIDENCE. SINCE THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF CASH DEPOSIT, SAME WAS ADDED AS INCOME OF ASSESSEE. THE SAID ADDITION WAS DELETED BY THE CIT(A), AGAINST WHICH THE REVENUE FILED AN APPEAL, WHICH WAS DISMISSED BECAUSE OF LOW TAX EFFE CT. ON THE OTHER HAND, THE COMMISSIONER ON VERIFICATION OF ASSESSMENT ORDER WAS OF THE VIEW THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE. THE COMMISSIONER NOTED ON VERIFICATION OF FORM 16 ISSUED BY THE LIC OF INDIA, AURANGABAD THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD ITA NO . 833 /PN/20 1 4 SHRI SHANKARSINGH C. THAKUR 3 RECEIVED GROSS SALARY OF RS.20,69,769/ - AND AFTER ALLOWING THE ELIGIBLE DEDUCTIONS, THE N ET SALARY CHARGEABLE TO TAX WAS RS. 19,61,180/ - . HOWEVER, IN THE COMPUTATION OF INCOME, THE ASSESSEE HAD FURTHER CLAIMED DEDUCTION OF RS. 3,89,838/ - ON ACCOUNT OF CONVEYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLOWANCE FROM SALARY. THE COMMISSIONER WAS OF THE VIEW THAT THE SAID CONVEYANCE ALLOWANCE AS WELL AS ADDIT IONAL CONVEYANCE ALLOWANCE WAS NOT ALLOWABLE UNDER SECTION 10(14) OF THE ACT . THEREFORE, SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE EXPLAINED THAT THE CONVEYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLOWANCE R ECEIVED BY HIM WAS REIMBURSEMENT OF CONVEYANCE EXPENDITURE INCURRED BY THE ASSESSEE, AGAINST WHICH THE LIC OF INDIA HAD ISSUED CERTIFICATE TO THE ASSESSEE AND THEREFORE, THE SAID EXPENDITURE WAS TO BE ALLOWED AS EXEMPT UNDER SECTION 10(14) OF THE ACT. THE COMMISSIONER DID NOT ACCEPT THE CLAIM OF ASSESSEE AND HE OBSERVED THAT THE PLEA OF ASSESSEE THAT CONVEYANCE ALLOWANCE WAS REIMBURSEMENT OF EXPENDITURE WAS WITHOUT ANY CORROBORATIVE EVIDENCE AND HENCE NOT ACCEPTABLE. IN VIEW THEREOF, THE ASSESSING OFFICER WAS DIRECTED TO GIVE CONSEQUENTIAL EFFECT TO THE ORDER PASSED BY MAKING AN ADDITION OF RS. 3,89,838/ - ON ACCOUNT OF CONVEYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLOWANCE. 5. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER. 6. THE LEARNED A UTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE COMMISSIONER HAD EXCEEDED HIS JURISDICTION IN EXERCISING THE POWER UNDER SECTION 263 OF THE ACT. HE EXPLAINED THAT SUM OF RS.3,89,838/ - WAS THE REIMBURSEMENT OF EXPENDITURE WHICH WAS ALLOWABLE TO THE ASSESSEE UNDER SECTION 10(14) OF THE ACT, HENCE, THE SAME WAS CORRECTLY ALLOWED IN THE HANDS OF ASSESSEE. HE FURTHER POINTED OUT THAT THE CASE OF ASSESSEE WAS SELECTED ITA NO . 833 /PN/20 1 4 SHRI SHANKARSINGH C. THAKUR 4 FOR SCRUTINY UNDER CASS FOR SOLITARY REASON OF EXAMINING THE SOURCE OF CASH DEP OSIT IN SAVINGS BANK ACCOUNT OF THE ASSESSEE. HE FURTHER REFERRED TO THE CIRCULAR OF CBDT IN THIS REGARD AND POINTED OUT THAT WHERE THE CASES ARE SELECTED ON THE BASIS OF INFORMATION RECEIVED THROUGH AIR OR UNDER CASS, THEN THE ASSESSING OFFICER HAS TO DE CIDE THE CASES ONLY ON THE BASIS OF WHICH THE SAME WERE SELECTED. IN CASE THE ASSESSING OFFICER FEELS THAT THERE ARE SOME OTHER A REAS REQUIRED TO BE LOOKED INTO, THEN HE HAS TO SEEK THE APPROVAL OF ADMINISTRATIVE COMMISSIONER, WHERE THERE IS POTENTIAL ESC APEMENT OF INCOME OF MORE THAN RS.10 LAKHS AS PER CBDT CIRCULAR DATED 09.09.2010. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF COMMISSIONER. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE EXERCISE OF JURISDICTION OF REVISION ARISING IN THE PRESENT APPEAL IS AGAINST THE EXERCISE OF JURISDICTION OF REVISION BY COMMISSIONER UNDER SECTION 263 OF THE ACT. WHERE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF REVENUE, THE COMMISSIONER IS EMPOWERED TO EXERCISE THE JURISDICTION UNDER SECTION 263 OF THE ACT AGAINST SUCH ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSESSING OFFICER HAD SELECTED THE RETURN OF INCOME FILED BY THE ASSESSEE FOR SCRUTINY IN CASS I.E. IT WAS PICKED UP FOR LIMITED PURPOSE OF EXAMINING THE SOURCE OF CASH DEPOSITS ABO VE THE THRESHOLD LIMIT IN THE SAVINGS BANK ACCOUNT. THE SCRUTINY TO BE CARRIED OUT IN THE CASE OF ASSESSEE WAS LIMI TED SCRUTINY. THE CBDT HAD PASSED INSTRUCTIONS IN SUCH CASES WHICH WERE PICKED UP FOR SCRUTINY ON THE BASIS OF DATA IN AIR OR CASES OF CASS. IT HAS BEEN DECIDED THAT SCRUTINY OF SUCH CASES WOULD BE LIMITED TO THE INFORMATION RECEIVED OR APPLIED AND IN CA SE WHERE THE ASSESSING OFFICER WAS OF THE VIEW THAT WIDER SCRUTINY HAD TO BE ITA NO . 833 /PN/20 1 4 SHRI SHANKARSINGH C. THAKUR 5 TAKEN UP, THEN THE SAME HAD TO BE CARRIED OUT WITH THE APPROVAL OF ADMINISTRATIVE COMMISSIONER, WHERE THERE WAS POTENTIAL ESCAPEMENT OF INCOME OF MORE THAN RS.10 LAKHS. THE ASSES SMENT IN THE CASE OF ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON ACCOUNT OF SCRUTINY UNDER CASS FOR LIMITED REASONING. THE ASSESSING OFFICER HAD NOT OPTED FOR WIDER SCRUTINY IN THE CASE OF ASSESSEE. IN SUCH CIRCUMSTANCES, WHERE THE ASSESSIN G OFFICER HAD EXERCISED THE LIMITED POWERS OF SCRUTINIZING THE CASE OF ASSESSEE ON THE POINTS FOR WHICH IT WAS SELECTED, THE ORDER OF ASSESSING OFFICER CANNOT BE HELD TO BE ERRO NEOUS FOR NOT LOOKING AT ISSUE WHICH WAS NOT PART OF ITS SELECTION PROCESS. 9. THE COMMISSIONER HAS HELD THE ORDER OF ASSESSING OFFICER TO BE ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF REVENUE BY NOT CONSIDERING THE CLAIM OF DEDUCTION OF RS. 3,89,838/ - ON ACCOUNT OF CONVEYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLOWANCE FR OM THE SALARY. IN VIEW THEREOF, WHERE THE ASSESSING OFFICER HAD LIMITED ZONE OF EXERCISING OF HIS JURISDICTION, NON - LOOKING INTO THE CLAIM OF ASSESSEE ON ACCOUNT OF CONVEYANCE AND ADDITIONAL CONVEYANCE ALLOWANCE CANNOT MAKE THE ASSESSMENT ORDER AS ERRONEO US. IN ANY CASE, EVEN IF WE TAKE UP THE POINT THAT THE ASSESSING OFFICER NEEDED TO WIDE N ITS SCRUTINY, THEN THE EMBARGO IS PLACED BY THE CBDT CIRCULAR THAT THE PERMISSION IS TO BE SOUGHT FROM THE ADMINISTRATIVE COMMISSIONER WHERE THE ESCAPEMENT OF INCOME IS MORE THAN RS.10 LAKHS. THE TOTAL EXPENDITURE CLAIMED AS DEDUCTION WAS RS. 3,89,838/ - AND IT IS BEYOND THRESHOLD LIMIT OF RS.10 LAKHS AND HENCE, COULD NOT BE PART OF WIDER SCRUTINY, IF ANY. EVEN THE CLAIM OF ASSESSEE IS JUSTIFIABLE , WHEREIN THE CONVEYAN CE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLOWANCE HAS BEEN PAID BY THE EMPLOYER LIC OF INDIA TO THE ASSESSEE, WHO WAS THE DEVELOPMENT OFFICER , ON ACCOUNT O F REIMBURSEMENT OF EXPENSES . S UCH REIMBURSEMENT WOULD ONLY TAKES PLACE ITA NO . 833 /PN/20 1 4 SHRI SHANKARSINGH C. THAKUR 6 WHERE THE ASSESSEE ESTABLISHES ITS CLAIM THAT IT HAS INCURRED EXPENSES. IN SUCH CIRCUMSTANCES, WHERE THE EXPENSES HAVE BEEN REIMBURSED TO THE ASSESSEE, THERE IS NO MERIT IN THE ORDER OF COMMISSIONER IN HOLDING THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE INCURRING OF EXPENDITURE. SI NCE THE ORDER PASSED BY ASSESSING OFFICER IS NOT ERRONEOUS, THE CONDITIONS LAID DOWN IN SECTION 263 OF THE ACT ARE NOT FULFILLED. ACCORDINGLY, THE COMMISSIONER HAS EXCEEDED HIS JURISDICTION IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT, WHICH ARE S ET - ASIDE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 12 TH D AY OF AUGUST , 201 6 . SD/ - SD/ - ( R.K. PANDA ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 12 TH AUGUST , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. / THE C I T , AURANGABAD ; 4 . , , / DR A , ITAT, PUNE; 5 . / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE