SH. BHALLE RAM NAIN,CHANDIGARH vs. ACIT, BHIWANI

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ITA 3290/DEL/2014Status: DisposedITAT Delhi23 June 2016AY 2009-104 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue of exemption under Section 10(14) for LIC Development Officers is debatable, as evidenced by differing High Court rulings. Therefore, it cannot be rectified under Section 154, which is meant for apparent mistakes.

What were the facts?

The assessee, a Development Officer of LIC, claimed exemption under Section 10(14) for expenditure. The AO denied this exemption through a rectification order under Section 154, which was upheld by the CIT(A).

What were the issues?

Whether the denial of exemption under Section 10(14) was a rectifiable mistake under Section 154, given the debatable nature of the issue.

Which sections of the Income-tax Act were involved?

Section 10(14),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : SMC-II : NEW DELHI

Before: SHRI R.S. SYAL

For Appellant: Shri Parikshit Aggarwal, CA
For Respondent: Shri Deepak Garg, Sr. DR
Hearing: 23.06.2016Pronounced: 23.06.2016

ORDER This appeal filed by the assessee is directed against the order passed by the CIT(A) on 13.3.2014 confirming the order passed u/s 154 by the AO denying the benefit of exemption u/s 10(14) of the Act in relation to the A.Y. 2009-10.

2.

Briefly stated, the facts of the case are that the assessee is a Development Officer of LIC of India, who filed return claiming exemption u/s 10(14) on expenditure amounting to Rs.1,12,466/-. The return was processed. Thereafter, the AO passed order u/s 154 on 8.8.2012 denying the benefit of such exemption. The ld. CIT(A) upheld the rectification order.

3.

I have heard the rival submissions and perused the relevant material available on record. The question as to whether or not exemption u/s 10(14) should be allowed to the Development Officers of the LIC has been decided by various High Courts in one way or the other. The Hon’ble jurisdictional High Court in CIT vs. Branch Manager, LIC of India, 298 ITR 358 (P&H) has approved the view of the Tribunal holding that the assessee, a branch of LIC, could not be held as an assessee in default for not deducting tax at source in view of the fact that the Revenue did not challenge simultaneous orders passed by the Tribunal pertaining to the other offices of the LIC. The Hon’ble Rajasthan High Court in CIT vs. Madan Gopal Bansal (2014) 366 ITR 319 (Raj) has allowed exemption u/s 10(14) in respect of conveyance allowance and additional conveyance allowance for meeting actual expenditure incurred in discharge of the field duties. This shows that the issue as to whether exemption u/s 10(14) should be allowed, is at any rate, a debatable one. Section 154 talks of rectifying a mistake which is apparent from record. It does not encompass debatable issues within its fold. If two views are possible on a point, the issue becomes debatable and moves out of the purview of rectification proceedings. In my considered opinion, the ld. CIT(A) was not justified in upholding the denial of exemption u/s 10(14) in proceedings u/s 154 of the Act. I, therefore, overturn the same.

4.

In the result, the appeal is allowed.

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