SMT. VISHALAKSHI SUDHEER V. THE PRINCIPAL COMMISSIONER OF INCOME-TAX

WP/9214/2018

AI Insights

The case involves Smt. Vishalakshi Sudheer, the legal representative and wife of the late Sri. M.V. Sudheer, who challenged the orders of the Income Tax authorities regarding the taxation of gratuity and leave encashment benefits received from her late husband's employer, Titan Co. Ltd. The petitioner contested the partial exemption granted on these benefits for the Assessment Year 2013-14, relying on specific circulars that provided for such exemptions. The initial assessment and subsequent appeal to the Commissioner of Income Tax (Appeals) were unsuccessful, leading to a revision petition under Section 264 of the Income Tax Act, which was deemed not maintainable by the Principal Commissioner of Income-Tax. The High Court of Karnataka, upon hearing the writ petition, directed the petitioner to approach the ITAT, emphasizing the correct procedural forum for such disputes.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 738218 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-03-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALAGI
• Assessee Lawyers: S PARTHASARATHI
• Keywords: Assessment Year 2013-14; Gratuity; Income Tax; Leave encashment; Legal representative
• Section: 250; 264; 226; 227

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2018 BEFORE THE HON’BLE MRS. JUSTICE S.SUJATHA W.P.NO.9214/2018(T-IT) BETWEEN: SMT. VISHALAKSHI SUDHEER AGED 51 YEARS, WIFE & LR OF LATE SRI. M.V. SUDHEER, RESIDING AT NO.88, \"LALITHA NIVAS\", 4TH CROSS, SARASWATHIPURAM, ULSOOR, BENGALURU-560 008. ... PETITIONER (By Sri. S PARTHASARATHI, ADV.,) AND: 1. THE PRINCIPAL COMMISSIONER OF INCOME-TAX BENGALURU-5, ROOM NO.538, 5TH FLOOR, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095. 2. THE COMMISSIONER OF INCOME-TAX (APPEALS) 5, 7TH FLOOR, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BENGALURU-560 095. 3. THE INCOME-TAX OFFICER WARD 5(3)(5), HMT BHAVAN, 2 BELLARY ROAD, BANGALORE-560 032. .. RESPONDENTS (By Sri JEEVAN J. NEERALAGI, ADV. ) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INIDA PRAYING TO QUASH THE ORDER OF THE 1ST RESPONDENT DATED 14.12.2017 PASSED UNDER SECTION 264 OF THE ACT FOR THE ASSESSMENT YEAR 2013-14 IN FILE F.NO.REV.PET. U/S.264 /VISHALAKSHI/ PR.CIT-5 / 2017-18 (ANNEXURE-J) AND ETC. THIS WP COMING ON FOR PRLY. HEARING THIS DAY, THIS COURT MADE THE FOLLOWING: ORDER The petitioner has challenged the order of the Respondent No.1 dated 14.12.2017 vide Annexure-J passed under Section 264 of the Income Tax Act, 1961 (‘Act’ for short) for the Assessment year 2013-14 inter alia challenging the order of the Respondent No.2 dated 29.07.2016 passed under Section 250 of the Act. 2. The petitioner is the legal representative and wife of the assessee namely Sri M.V.Sudheer, who was an assessee under the Act. The assessee was an employee of Titan Co. Ltd. (‘Company’ for short). He 3 died on 06.10.2012 while in active service. The petitioner being the wife and legal representative of the assessee received the dues from the employer-Company after deduction of applicable tax under the Act. The amount so received included gratuity after reducing the tax deducted at source and also leave encashment benefit. The petitioner filed the return of income for the Assessment Year 2013-14 in respect of the assessee in the capacity of legal representative wherein the petitioner claimed exemption from taxation in respect of gratuity amount and also the leave encashment benefit received, by placing reliance on Circular No.573 dated 21.08.1990 and Circular No.309 dated 03.07.1981. The petitioner declared other income and after considering the deduction of tax at source, prayed for refund of excess tax deducted. The Assessing Officer, in the course of assessment proceedings held that the petitioner was not entitled to the exemption in respect of gratuity and leave encashment benefit in full as claimed and the same was restricted to Rs.10 Lakhs in the case 4 of gratuity and Rs.3 Lakhs in the case of leave encashment. Aggrieved by the same, an appeal was preferred before the Commissioner of Income Tax (Appeals) (for short ‘CIT (Appeals)’ – Respondent No.2 herein, who confirmed the order of the Assessing Authority. Aggrieved by the same, the petitioner preferred a Revision petition under Section 264 of the Act before the Respondent No.1. The same came to be rejected as not maintainable. Hence, this writ petition. 3. Heard the learned counsel appearing for the parties and perused the material on record. 4. It is prima facie apparent that the petitioner has chosen a wrong forum in challenging the order of the Appellate Authority-CIT (Appeals). Hence, the Respondent No.1 is justified in rejecting the revision as not maintainable. It is incumbent on the petitioner to prefer an appeal before the Income Tax Appellate Tribunal (for short ‘ITAT’) against the order of the CIT (Appeals). Hence, this Court is of the considered view 5 that the ends of justice would be met in directing the petitioner to file the statutory appeal before the ITAT in accordance with law. If such an appeal is preferred, within a period of two weeks from today, the ITAT shall consider the same in accordance with law and pass appropriate orders on merits in an expedite manner without objecting on the aspect of limitation. Hence, the following: ORDER The writ petition stands disposed of with liberty to the petitioner to file an appeal, before the jurisdictional Appellate Tribunal, within a period of two weeks from today. On such appeal being filed, the same shall be considered by the Tribunal in accordance with law without objecting for the limitation. Sd/- JUDGE TL "