MUGDHA SHIRISH AGARKAR vs. THE PRINCIPAL CHIEF COMMISSIONER INCOME TAX, PUNE AND ORS.

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WP/12515/2017HC BombayHCBM01047499201701 March 2018Author: HON'BLE SHRI JUSTICE SANDEEP KASHINATH SHINDE,HON'BLE SHRI JUSTICE M.S. SANKLECHA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned order dated May 2, 2016, passed by the Assessing Officer rejecting the petitioner's rectification application was in breach of the principles of natural justice, as it was passed without granting the petitioner a personal hearing. Consequently, the Court quashed and set aside the impugned order. The petitioner's rectification applications, dated September 30, 2009, and December 4, 2015, were restored to the Assessing Officer for fresh disposal. The Assessing Officer was directed to consider the decision of the Bombay High Court in Commissioner of Income-Tax-III, Pune Vs. Shri. Ramesh Dattatraya Kulkarni and any relevant Circulars issued by the Central Board of Direct Taxes. The Assessing Officer was also directed to grant a personal hearing to the petitioner and dispose of the applications expeditiously, preferably within four weeks from the date of the order. No issue was expressly left undecided.

What were the facts?

The petitioner, Mrs. Mugdha Shirish Agarkar, a retired employee of the State Bank of India (SBI) who took voluntary retirement under the SBI Exit Option Scheme in the previous year relevant to Assessment Year 2008-09, challenged an order dated May 2, 2016, passed by the Assessing Officer. This order rejected her application for rectification under Section 154 of the Income-Tax Act, 1961. The petitioner contended that she was entitled to the exemption available to retired SBI employees under Section 10(10C) of the Act, as previously held by the Bombay High Court in Commissioner of Income-Tax-III, Pune Vs. Shri. Ramesh Dattatraya Kulkarni. The Assessing Officer had rejected her rectification application without granting a personal hearing.

What were the issues?

1. Whether the Assessing Officer's order rejecting the petitioner's rectification application under Section 154 of the Income-Tax Act, 1961, is liable to be quashed and set aside on the ground of breach of principles of natural justice, specifically the denial of a personal hearing? (Question of law and fact, turning on Section 154 and principles of natural justice). Assessee's Contention: The petitioner argued that the Assessing Officer's order was passed in breach of the principles of natural justice as she was not granted a personal hearing. She relied on the Bombay High Court's decision in Commissioner of Income-Tax-III, Pune Vs. Shri. Ramesh Dattatraya Kulkarni, which held that ex-SBI employees were entitled to exemption under Section 10(10C). Revenue's Contention: The judgment records no specific arguments from the respondents (revenue).

Which sections of the Income-tax Act were involved?

Section 154,Section 10(10C)

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 12515 OF 2017 Mrs. Mugdha Shirish Agarkar ….Petitioner V/s. The Principal Chief Commissioner, Income-Tax, Pune and Ors. ….Respondents * Ms. Pranati Mehra, Advocate for the petitioner. Mr. Sham V. Walve, Advocate for the respondents.

CORAM :- CORAM :- M.S. SANKLECHA, & M.S. SANKLECHA, &

SANDEEP K. SHINDE, JJ. SANDEEP K. SHINDE, JJ.

DATE :- DATE :-

1ST MARCH, 2018. 1ST MARCH, 2018. P.C. :- P.C. :- 1.

This petition under Article 226 of the Constitution of India challenges the order dated 2nd May, 2016 passed by the Assessing Officer rejecting the petitioner's application for rectification made under Section 154 of the Income-Tax Act, 1961.

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The petitioner is a retired employee of the State Bank of India who took voluntary retirement in the previous year relevant to the Assessment Year 2008-09 under the SBI Exit Option Scheme. The petitioner was not granted the benefit of exemption available to retired employees of SBI Exit Optees under Section 10(10C) of the Act. Thus, the petitioner filed her rectification applications which was rejected by the Assessing Officer on 2nd May, 2016 without grant of personal hearing. It is the petitioner's case that, she is entitled to exemption under Section 10(10C) of the Act as an ex-SBI employee as held by the Bombay High Court in the case of Commissioner of Income-Tax-III, Pune Vs. Shri. Ramesh Dattatraya Kulkarni (Income Tax Appeal No. 1494 of 2013 decided on 9 th April, 2015). 3.

In the above view, as admittedly, the impugned order on rectification has been passed in breach of principles of natural justice, i.e. without granting the petitioner a personal hearing, the impugned order dated

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2nd May, 2016 is quashed and set aside. The petitioner's rectification applications dated 30th September, 2009 and 4th December, 2015 is restored to the Assessing Officer for fresh disposal after taking into account, the decision of this Court in Commissioner of Income-Tax-III, Pune Vs. Shri. Ramesh Dattatraya Kulkarni (Income Tax Appeal No. 1494 of 2013 decided on 9 th April, 2015) and Circular issued by the Central Board of Direct Taxes in this regard. 4.

In view of the fact that the petitioner is a retired employee, the Assessing Officer is directed to dispose of the rectification applications, as expeditiously as possible in accordance with law preferably within four weeks from today. This after granting personal hearing to the petitioners. 5.

Petition is disposed of in above terms. No order as to costs. ( (SANDEEP K. SHINDE, J) SANDEEP K. SHINDE, J)

(M.S. SANKLECHA, J) (M.S. SANKLECHA, J)

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