Introduction: The recent order from the Income Tax Appellate Tribunal (ITAT) Pune in the case of Anita Anil Rangale vs. ACIT addresses the intricacies of relief under Section 89 of the Income-tax Act for an employee opting for the Early Retirement Scheme (ERS). The appeal stems from the denial of relief by the Assessing Officer (AO), raising questions about the nature of the scheme and the employee’s entitlement.
1. Background of the Case:
2. AO’s Decision and Denial of Relief:
3. Additional Evidence – Key Turning Point:
4. ITAT’s Decision and Re-adjudication:
Conclusion: The ITAT Pune’s directive for re-adjudication in Anita Anil Rangale’s case signifies the importance of additional evidence. The revelation that employees, including the appellant, were not entitled to the ERS, and the company had no obligation under the scheme, could potentially alter the assessment outcome. The order underscores the principles of fairness and due process, allowing the appellant an opportunity to present crucial evidence and have the matter reconsidered.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee is directed against the order dated 08.12.2022 passed by the CIT(A) in National Faceless Appeal Centre (NFAC), Delhi in relation to assessment year 2016-17.
2. Briefly stated, the facts of the case are that the assessee has been a salaried employee of Colgate Palmolive (India) Ltd., Aurangabad Unit. An Early Retirement Scheme (ERS) was formulated by the employer. The assessee was one of the employees opting for the ERS. He claimed relief u/s 89 of the Income-tax Act, 1961 (hereinafter also called „the Act‟) to the extent of Rs.6,06,258/- in the return of income, without claiming exemption u/s 10(10C). The Assessing Officer (AO) held that there was no termination of employment and the amount received by the assessee was compensation which was not a capital receipt. He, therefore, held it to be profits in lieu of salary as per section 17(3) and re-worked the amount of relief u/s 89. No succor was provided by the CIT(A). Aggrieved thereby, the assessee has come up in appeal before the Tribunal.
3. I have heard both the sides and perused the record. At the very outset, the ld. counsel for the assessee submitted that the proceedings before the AO have gone on the premise that the assessee opted for voluntary retirement, which was not thrust upon him. He placed on record a letter dated 06.10.2023 issued by the Colgate Palmolive (India) Ltd. stating that the assessee and other employees were not entitled for the scheme nor was the company under any obligation under the same to the employees. It was submitted that this is an important additional evidence which has bearing on the issue. In view of the fact that an additional evidence has been placed before the Bench, which appears to have significance in deciding the matter, I am of the considered opinion that it would be just and fair if the impugned order is set-aside and the matter is remitted to the file of the AO with a direction to decide the issue afresh in the hue of the above additional evidence as per law after allowing a reasonable opportunity of hearing to the assessee. I order accordingly. Needless to say, the assessee will be at liberty to file any further evidence in support of his contention.
4. In the result, appeal is allowed for statistical purposes.
Order pronounced in the Open Court on 10th October, 2023.