G. Mallikarjuna Rao, Hyd, Hyderabad v. ITO, Ward-12(1), Hyderabad

ITA 747/HYD/2011 | 2007-2008
Pronouncement Date: 14-12-2011 | Result: Allowed

Appeal Details

RSA Number 74722514 RSA 2011
Assessee PAN AEPPG5210D
Bench Hyderabad
Appeal Number ITA 747/HYD/2011
Duration Of Justice 7 month(s) 17 day(s)
Appellant G. Mallikarjuna Rao, Hyd, Hyderabad
Respondent ITO, Ward-12(1), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 14-12-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 14-12-2011
Assessment Year 2007-2008
Appeal Filed On 27-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SHRI CHANDRA POOJARI AM & SMT ASHA VIJAYARAGHAVAN J.M. ITA NO.747/HYD/2011 ASSESSMENT YEAR 2007-08 M/S G. MALLIKARJUNA RAO HYDERABAD. (PAN AEPPG5210D) VS THE ITO WARD 12(1) HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI RAVI SESHIGIRI RAO RESPONDENT BY : SHRI R. LAXMAN DATE OF HEARING : 21.11.2011 DATE OF PRONOUNCEMENT : 16.12.2011 ORDER PER ASHA VIJAYARAGHAVAN JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) II HYDERABAD DATED 25.2.2011 AND IT PERTAINS TO THE ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE I S AN INDIVIDUAL WORKED IN THE STATE BANK OF HYDERABAD AS OFFICER AND HAD OPTED FOR VOLUNTARY RETIREMENT ON 4.10.2006 UNDER THE EXIT SCHEME FRAMED BY THE BANK. THE ASSESSEE HAD FILED THE RETURN OF INCOME FOR THE ACCOUNTING PERIOD 1.4.2006 TO 31.3.2007 RELEVANT FOR THE ASSESSMENT YEAR 2007-08 BY RETURNING AN INCOME OF RS.8 02 500/-. THE RETURN O F INCOME WAS PROCESSED BY THE DEPARTMENT U/S 143(1) AND A RE FUND OF RS.29 856/- WAS GRANTED TO HIM ON 24.1.2008. ITA NO.747/H/2011 SHRI G. MALLIKARJUNA RAO HYDERABAD 2 3. THE ASSESSING OFFICER VIDE HIS LETTER DATED 16 .8.2010 REJECTED THE PETITION OF THE ASSESSEE U/S 154 HOLDI NG THAT THE EXEMPTION CLAIMED U/S 10(10C) OF THE IT ACT CANNOT BE ALLOWED IN VIEW OF THE BOARDS CIRCULAR IN F.NO.200/34/2009 -ITA-II DT. 6.10.2009. THE ASSESSING OFFICER FURTHER DIRECTED T HE ASSESSEE TO FURNISH EVIDENCE FOR PAYMENT OF HOUSING LOAN INS TALMENT OF RS.7 94 274/- SO AS TO ENABLE HIM TO CONSIDER EXEMP TION U/S 80C OF THE ACT. 4. THE CIT(A) HELD THAT : IT IS NOTICED FROM THE CIRCULAR NO.PER/2005-06 DAT ED 21.12.2005 ISSUED BY THE STATE BANK OF HYDERABAD REGARDING STAFF SUPERVISING EXIT OPTION SCHEME I N WHICH IT WAS CATEGORICALLY MENTIONED THAT AS PER THE PROP OSED SCHEME DOES NOT COMPLY WITH RULE 10(10C) OF THE IT ACT 1961 AND NO BENEFIT OF EXEMPTION OF EX GRATIA FROM INCOME TAX IS INTENDED IN THIS SCHEME THERE IS NO LEGAL REQUIREMENT FOR OBTAINING PRIOR APPROVAL OF INCOME TAX DEPARTMENT. IN RESPONSE TO ONE OF THE EMPLOYEES REQUEST A COPY OF THE LETTER SENT BY THE BANK TO IT DEPARTMENT CLAIMING EXEMPTION U/S 10(10C) THE REPLY OF THE BANK MANAGE MENT IS AS UNDER: THE PROVISIONS OF EXIT OPTION SCHEME DOES NOT COMP LY WITH THE GUIDELINES FOR CLAIMING EXEMPTION U/S 10(1 0C) OF THE IT ACT AND THE SAME WAS MADE CLEAR TO THE EXIT OPTEES IN THE SCHEME AT PARA 10 OF ANNEXURE TO THE HEAD OF FICE CIRCULAR NO.PER/2005-06 DATED 21.12.2005 THAT THE ITA NO.747/H/2011 SHRI G. MALLIKARJUNA RAO HYDERABAD 3 PROPOSED SCHEME DOES NOT COMPLY WITH RULE 10(10C) O F THE IT ACT 1961 AND NO BENEFIT OF EXEMPTION OF EX GRAT IA FROM INCOME TAX IS INTENDED IN THIS SCHEME THERE IS NO LEGAL REQUIREMENT FOR OBTAINING PRIOR APPROVAL OF IT DEPA RTMENT IN VIEW OF THE ABOVE FACTS AND POSITION OF THE SCHE ME WHICH IS NOT IN CONFORMITY WITH SECTION 10(10C) OF IT ACT READ WITH RULE 2BA IT IS DECIDED THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UPTO RS.5 LAKHS U/S 10(10C) OF THE IT ACT. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS DIS MISSED. 5. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE US AND SUBMITTED AS FOLLOWS: THAT WHILE FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS THE ASSESSE E WAS NOT AWARE OF THE PROVISIONS OF THE INCOME TAX ACT AND A LSO AS PER THE FORM NO.16 ISSUED BY HIM EMPLOYER THE ASSESSEE HAD OMITTED TO CLAIM DEDUCTION OF RS.5 LAKHS FOR WHICH THE ASSESSE E WAS ELIGIBLE UNDER THE PROVISIONS OF SECTION 10(10C) OF THE IT ACT. IN ADDITION TO THIS THE ASSESSEE HAD ALSO NOT CLAIMED DEDUCTION U8/S 80C TO FULL EXTENT AS IT WAS MENTIONED IN FORM NO.16 THAN RS.25 200/- WAS SHOWN AS REPAYMENT OF HOUSING LOAN AS AGAINST RS.7 94 274/- PAID BY THE ASSESSEE. RECENT LY THE HONBLE SC VIDE JUDGEMENT REPORTED IN 326 ITR 49 IN THE CASE OF CHANDRA RANGANATHAN AND OTHERS VS. CIT HELD THAT TH E OFFICERS WORKED IN RBI OF INDIA WHO WERE PLACED UNDER SIMIL AR CIRCUMSTANCES WERE ELIGIBLE FOR DEDUCTION U/S 10(1 0C) OF THE IT ACT. ITA NO.747/H/2011 SHRI G. MALLIKARJUNA RAO HYDERABAD 4 6. WE HEARD BOTH THE PARTIES. WE FIND THAT IN THE CASE OF CHANDRA RANGANATHAN & OTHERS VS. CIT (326 ITR 49) (SC) IT HAS BEEN HELD AS FOLLOWS: DURING THE COURSE OF HEARING OF THE APPEALS IT WA S BROUGHT TO THE NOTICE OF THE SUPREME COURT THAT BY THE SUBSEQUENT LETTER DATED MAY 8 2009 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES IT WAS INDICATED THA T THE MATTER HAD BEEN REVIEWED ON THE BASIS OF THE JUDGME NT OF THE BOMBAY HIGH COURT DATED JULY 4 2008 IN THE CA SE OF CIT V. KOODATHIL KALLYATAN AMBUJAKSHAN (2009) 309 ITR 113 (BOM.); 219 CTR (BOM.) 80 (2008) 12 DTR 138 AND IT WAS HELD THAT AMOUNT RECEIVED BY THE RETIRING EMPLO YEES OF THE RBI WOULD BE ELIGIBLE FOR EXEMPTION UNDER TH E AFORESAID PROVISIONS OF THE INCOME-TAX ACT. ON BEHA LF OF THE UNION OF INDIA AND THE COMMISSIONER OF INCOME-TAX THE RESPONDENT HEREIN IT WAS SUBMITTED THAT IN VIEW OF THE SAID CIRCULAR THE RESPONDENT WOULD ALLOW THE BENEF IT OF DEDUCTION TO THE APPELLANTS U/S.10(10C) OF THE INCO ME-TAX ACT 1961 AS FAR AS THE RETIRED EMPLOYEES OF THE R ESERVE BANK OF INDIA WERE CONCERNED. THE AMOUNTS RECEIVED BY RETIRING EMPLOYEES OF THE RESERVE BANK OF INDIA OP TING FOR THE OPTIONAL EARLY RETIREMENT SCHEME ARE ELIGIBLE F OR EXEMPTION FROM INCOME TAX U/S 10(10C) OF THE IT ACT 1961. 7. RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HO NBLE SUPREME COURT IN THE CASE CITED (SUPRA) WE ALLOW T HE ASSESSEES APPEAL. ITA NO.747/H/2011 SHRI G. MALLIKARJUNA RAO HYDERABAD 5 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSE E STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON: 14. 12.201 1 SD/- SD/- (CHANDRA POOJARI) ( ASHA VIJAYARAGHAVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 14 TH DECEMBER 2011 COPY FORWARDED TO: 1. SHRI S. RAMA RAO ADVOCATE FLAT NO.102 DOOR NO.3- 6- 643 SHRIYAS ELEGANCE ST. NO.9 HIMAYATNAGAR HYDERABAD-29. 2. THE THE ITO WARD 12(1) HYDERABAD 3. THE CIT(A) II HYDERABAD 4. THE CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP/