Case Law Details
Deepak Budhani Vs ITO (ITAT Chandigarh)
Ld. AR submitted that the assessee did not claim the amount of VRS as exempt in the return of income for the simple reason that the assessee was an illiterate person who did not have any knowledge of the provisions of the Income Tax Act and also did not have any access to expert professional advice and, therefore, it was under these circumstances that the assessee had filed the return of income without claiming the benefit of exemption under section when the assessee came to know that assessments of his erstwhile fellow workers had been completed with they being granted the benefit of exemption u/s 10(10B) of the Act that he chose to file the appeal before the Ld. NFAC, although, belatedly but the reason for delay was not intentional but was rather due to the assessee’s unawareness regarding the provisions of Income Tax Act. The Ld. AR also submitted that the Ld. NFAC, in some cases pertaining to erstwhile fellow co-workers of the assessee, has allowed the benefit of exemption. To support this contention, she drew our attention to order of the Ld. NFAC, Delhi in the case of Shri Raj Kumar Singh vide order dated 18.08.2021 for assessment year 2017-18 wherein the assessee had been allowed the benefit of exemption u/s 10(10B) of the Act vis-a-vis the amount received on VRS. Referring to the said order, the Ld. AR pointed out that in this case, the Ld. NFAC had condoned a delay of 31 months and 10 days and had then allowed the benefit of exemption.
The facts are not in dispute at all and the only issue before me at this present juncture is the question as to whether the Ld. NFAC was justified in not condoning the delay of 2 years, 5 months and 17 days. It is settled law that the appellate authorities have power to allow relief to the assessee to which he is otherwise entitled, even though, no claim has been made by the assessee in the return of income.
In Writ Petition No. 783 of 2012 in the case of Sanchit Software and Solutions Pvt. Ltd Vs. Commissioner of Income Tax and Others, Hon’ble Mumbai High Court held that in any civilized system, the assessee is bound to pay the tax which he liable under the law to the Government. The Government on the other hand is obliged to collect only that amount to tax which is legally payable by an assessee. The entire object of the administration of tax is to secure the Revenue for the development of the country and not to charge assessee more tax than which is due and payable by the assessee. The Hon’ble High Court further observed that as far as back in 1955, the Central Board of Direct Tax had issued a Circular directing AO not to take advantage of assessee’s ignorance and / or mistake. Article 265 of the Constitution of India also provides that no tax shall be levied or collected except by the authority of law.
In view of the above, I deem it expedient that in the interest of substantial justice, the delay be condoned. I, accordingly, direct the Ld. NFAC to condone the delay of 2 years, 5 months and 17 days and adjudicate on assessee’s appeal on merits in accordance with law preferably within a period of one year from the date of receipt of this order after giving due opportunity to the assessee to present his case.
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