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Facts
The assessee, after voluntary retirement in 2019, had income assessed at Rs. 28,02,718/- with a penalty for AY 2020-21 by the AO due to non-filing of reply during assessment. The CIT(A) dismissed the assessee's appeals due to substantial delays (445 days for assessment appeal, 8 months for penalty appeal) without condoning the delay or granting claimed exemptions/relief for voluntary retirement compensation, leave encashment, gratuity, and arrear salary.
Held
The Tribunal condoned the delays in filing appeals, emphasizing that substantial justice is more important than procedural delays. It set aside both the assessment and penalty orders for *de novo* adjudication by the Assessing Officer, instructing the assessee to file all necessary details and ensuring an opportunity of hearing, to prevent double taxation on arrear salary and address other claims.
Key Issues
The key issues were the condonation of delays in filing appeals, the correctness of the assessment and penalty orders, and the assessee's eligibility for exemptions/relief under sections 10(10C), 10(10AA), 10(10) for retirement benefits and relief under 89(1) for arrear salary.
Sections Cited
Section 250, Section 143(3), Section 144B, Section 270A, Section 10(10C), Section 10(10AA), Section 10(10), Section 89(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
ORDER PER BENCH : These two appeals filed by the Assessee against the separate orders of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2020-21 dated 23.07.2025 & 28.08.2025 emanating from the Assessment Order passed under section 143(3) read with section 144B of the Act, dated 13.09.2022 and penalty order under section 270A of the Act, dated 22.03.2023 respectively. For the sake of convenience, & 2585/PUN/2025 [A] these two appeals were heard together and are being disposed of by this common order. We treat appeal in as lead appeal. The Assessee has raised the following grounds of appeal :
1. 1. The Id CIT(A) erred in law and on facts in dismissing the appeal ex-parte without appreciating the facts and circumstances of the case.
2. The Id CIT(A) erred in law and on facts in confirming the action of AO in assessing income at Rs 28,02,718/- without appreciating the facts and circumstances of the case.
3. The Id CIT(A) erred in law and on facts in not granting exemption u/s 10(10C) of Rs 5,00,000/- in respect of compensation f voluntary retirement, Section 10(10AA) of Rs 2,39,352/- in respect of earned leave encashment on retirement, Section 10(10) of Rs 4,45,185/- in respect of gratuity cum retirement of the Income Tax Act.
4. The Id CIT(A) erred in law and on facts in not granting relief u/s 89(1) in respect of arrears of salary.
The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.”
Delay : 1.1 There is a delay of 37 days in filing appeal before this Tribunal. Assessee has filed condonation petition along with 2 & 2585/PUN/2025 [A] Affidavit. Substantial justice is more important than procedural delays. In these facts, we are convinced that there is reasonable and sufficient cause for delay. Hence, Delay is condoned.
Findings & Analysis : 2. We have heard both the parties and perused the records. In this case, Assessee had been working with Hindustan Antibiotics Ltd., Pimpri, Pune since 13.09.1993 and got Voluntary Retirement from the Company on 31.12.2019. The assessee filed original return of income electronically for the A.Y.2020-21 on 31.10.2020 declaring total income of Rs.16,25,300/-. Thereafter, the assessee filed revised return of income electronically on 26.03.2021 declaring total income of Rs.4,47,310/-. Assessee’s Revised Return of Income was selected for scrutiny. During the assessment proceedings, Assessee failed to file reply to the show-cause notice issued by Assessing Officer, therefore, Assessing Officer assessed the total income at Rs.28,02,718/-. Assessing Officer also levied penalty u/s.270A of the Act.
Aggrieved by the Assessment Order and Penalty Order, Assessee filed appeal before ld.CIT(A). There was a delay of 445 days in filing appeal before the ld.CIT(A), against the assessment 3 & 2585/PUN/2025 [A] order. Similarly, there was a delay of 8 months in filing appeal against the penalty order. Ld.CIT(A) dismissed the appeal stating that there was no sufficient reason for condonation of delay. Aggrieved by the ld.CIT(A)’s order, Assessee has filed two separate appeals. For the sake of convenience, both the appeals were heard together.
Ld.AR filed a paper book. Ld.AR submitted that the Company Hindustan Antibiotics Ltd., was in bad financial position and therefore, had not paid the employees their salaries. Ld.AR filed an elaborate submission explaining arrear salary received by Assessee. Ld.AR pleaded that there has been double taxation in the case of assessee.
4.1 However, it is an admitted fact that these details were not filed during assessment proceedings. Substantial justice is more important than the procedural delay. Admittedly, Assessee had not filed the details of arrear salary and Section 89(1) claim during assessment proceedings, but for this mistake, Assessee should not be made to pay double tax. In these facts and circumstances of the case, in the interest of justice, we set-aside the assessment order to the Assessing Officer for denovo adjudication. Assessee shall file 4 & 2585/PUN/2025 [A] all necessary details before the Assessing Officer. The Assessing Officer shall provide opportunity of hearing to the Assessee. Accordingly, Grounds of appeal raised by the assessee are allowed for statistical purpose.
5. In the result, appeal of the assessee in is allowed for statistical purpose. 6. Since we have set-aside the assessment order to Assessing Officer, we also set-aside the penalty order to ld.Assessing Officer for denovo adjudication. Accordingly, appeal in is allowed for statistical purpose.
To sum up, both appeals of the assessee are allowed for statistical purpose. Order pronounced in the open Court on 13 February, 2026. VINAY BHAMORE Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पपणे / Pune; ददिधंक / Dated : 13 Feb, 2025/ SGR & 2585/PUN/2025 [A]