Godavari Vijay Kulkarni Vs ITO (ITAT Pune)
The Pune Bench of the Income Tax Appellate Tribunal heard the assessee’s appeal against the order dated 08.09.2023 passed by the Commissioner of Income Tax (Appeals)/NFAC for Assessment Year 2019-20. This was the second round of proceedings before the Tribunal after the Bombay High Court set aside the Tribunal’s earlier order dated 12.03.2024 and remanded the matter for a fresh hearing on the ground that the assessee had not been afforded a reasonable opportunity of being heard and that the principles of natural justice had not been followed. Subsequently, during the pendency of the proceedings, the original assessee expired and the Bombay High Court permitted his legal heir, Smt. Godavari Vijay Kulkarni, to continue the proceedings.
The assessee, who was employed as General Manager with Pfizer Healthcare India Pvt. Ltd., filed the return of income declaring total income of ₹57,84,740 after claiming relief of ₹13,22,187 under Section 89(1) of the Income-tax Act, 1961. The case was selected for scrutiny to verify the refund claim and relief claimed for arrears or advance salary. During assessment, the Assessing Officer noted that the assessee had received ₹37,21,803 as part of the final settlement, including ₹15,37,387 as ex-gratia severance pay, ₹12,00,000 towards early bird and group participation incentives, ₹7,04,317 as notice period payout, and ₹2,19,449 under other earnings. The assessee contended that the amount received on cessation of employment was a capital receipt. The Assessing Officer rejected this contention and denied relief under Section 89(1), treating the receipt as taxable. The CIT(A), in an ex parte order, upheld the assessment.
