Case Law Details
Facts of the case:
The assessee filed return of income for the year under consideration declaring taxable income of Rs.2,23,430/- . In the return of income, the assessee had claimed Rs.5 lacs as exempt under section 10(10C) of the out of total amount of Rs.6,86,346/- being the amount of ex-gratia received by him from his the then employer , State Bank of Patiala at the time of his retirement under the scheme known as Exit Option Scheme floated by the State Bank of Patiala. The assessee had also received gratuity and leave encashment, which amount was also claimed by the assessee as deduction under sections 10(10C) and 10(10AA) of the Income Tax Act , 1961. The Assessing Officer did not allow the claim of the assessee for the reasons stated in the assessment order dated 13.12.2010 passed under section 143(3) r .w.s. 147 of the Act. The appeal of the Assessee was dismissed by the CIT(A) as the same was barred by the imitation.
Questions of Law:
- Whether the CIT(A) was justified in not condoning the delay?
- Whether disallowing the claim of the appellant at Rs.5,00,000/- u/s 10(10C) was right?
Contentions of the Assessee
The assessee was advised not to file any appeal due to the reasons that in case the appeal is preferred, the provisions with regard to the penalty would be attracted. However, the assessee on 15.12.2011 came to know that his other colleagues have filed appeals before the Income Tax Appellate Authorities and most of them had succeeded in such appeals. The issue appealed against was covered in his favour as per the decision of the I.T.A.T. , Division Bench, Chandigarh in ITA No.925/Chd/2011 vide order dated 1.11.2011 in the case of Shri Bikram Jit Passi Vs. DCIT, Ambala Cantt relating to assessment year 2008-09 where it was held that an employee, who takes voluntary retirement, is entitled to deduction under section 10(10C) even if the payment is stretched over a period of years. They have also held that provision of section 10(10C) should be interpreted in a manner beneficial to the optee for voluntary retirement. The assessee is entitled to the exemption under section 10(10C) of the Act and also rebate under section 89 of the Act in respect of the amount received in excess of Rs.5,00,000 on account of voluntary retirement.
Contention of the Revenue:
The Learned CIT(A) by dismissing the appeal of the Assessee on the condonation of delay held that the grounds for delay was very general in nature and the delay can’t be condoned. Further, there was no decision on the merits.
Held by the Tribunal:
The Hon’ble tribunal while relying on the Judgment of Shri Arun Rohtagi & Others Vs. ITO 4(1), Kanpur & Others in ITA No.1275/LUC/2006 to 1279/LUC/2006 in which it was observed that the employees did not file appeals before the Tribunal on the ground that the RBI had deducted tax and their counsel had advised against filing of the appeals. But after receipt of the order of the I.T.A.T. (Bombay Bench) in favour of the assesses, the appeals were filed and there was no delay thereafter. In such circumstances, the Tribunal held that in order to impart justice to the employees/assesses the delay deserves to be condoned. Accordingly, the Tribunal condoned the delay in filing the appeals. Regarding the issue of Section 10(10)(C), the Hon’ble Tribunal allowed the claim of the assessee holding that the authorities below were not justified in disallowing the amount of Rs.5 lacs under section 10(10C) of the Act. Accordingly, this issue was held in the favour of the Assessee.
