Shamik Pankajbhai Parikh Vs ITO (ITAT Ahmedabad)
In a recent case before the Income Tax Appellate Tribunal (ITAT) Ahmedabad, an individual, Shamik Pankajbhai Parikh, contested the taxability of voluntary severance pay or ex-gratia received on account of the termination of employment. The dispute arose from the assessment year 2017-18, and the appellant appealed against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)].
Grounds of Appeal: The appellant raised several grounds of appeal, each challenging different aspects of the order. The key issues can be summarized as follows:
1. Adjustment to Total Income:
- The CIT(A) confirmed the action of the Assessing Officer in adjusting the total income of the appellant.
- The appellant argued that the explanation furnished by them regarding the adjustments made to the total income was not considered.
2. Total Income Processed under Section 143(1):
- The CIT(A) held that there was no mistake apparent on record in the order passed by the Assessing Officer.
- The appellant contended that the order did not consider their right to seek rectification under Section 154 of the Income Tax Act.
3. Taxability of Voluntary Severance Pay:
- The CIT(A) concluded that voluntary ex-gratia received by the appellant is taxable under Section 17(3)(i) of the Act.
- The appellant argued that such payments should not be considered as compensation for the purpose of Section 17(3)(i).
4. Violation of Principles of Natural Justice:
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