RAJDEEP MOHAPATRA,CUTTACK vs. CIT, CUTTACK

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ITA 74/CTK/2016Status: DisposedITAT Cuttack22 September 2017AY 2011-125 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT was not justified in revising the AO's order under Section 263. The AO had indeed sought and received information from the employer before allowing the relief.

What were the facts?

The CIT invoked Section 263, stating the Assessing Officer (AO) allowed relief under Section 90/91 without documentary proof. The AO had previously sought information from the assessee's employer and, after satisfaction, granted the relief.

What were the issues?

Whether the CIT was justified in revising the assessment order under Section 263 when the AO had obtained necessary information from the employer before allowing relief under Section 90/91.

Which sections of the Income-tax Act were involved?

Section 263,Section 90,Section 91,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE

For Appellant: Shri P.R.Mohanty/D.S.Jethi,, AR
For Respondent: Shri A.K.Mohapatra,, CIT DR
Hearing: 19/09

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No. 74/CTK/2016 Assessment Year : 2011-2012

Rajdeep Mohapatra, Vs. ACIT, Circle 2(2), Cuttack Gorakabar Road, Tulsipur, Cuttack PAN/GIR No.aaypm 6200 e (Appellant) .. ( Respondent)

Assessee by : Shri P.R.Mohanty/D.S.Jethi,, AR Revenue by : Shri A.K.Mohapatra,, CIT DR

Date of Hearing : 19/09/ 2017 Date of Pronouncement : 22 /09/ 2017

O R D E R Per N.S.Saini, AM This is an appeal filed by the assessee against the order of the CIT,

Cuttack u/s.263 of the Act dated 7.1.2016 for the assessment year 2010-

2011.

2.

The assessee has raised the following grounds:

“1. For that, the order of the forum below is arbitrary, illegal, unjustified and erroneous and has been passed on improper application of mind, being devoid of merit, as such deserves to be quashed in limine.

2.

For that, the order passed U/s 263 of the l.T. Act, 1961 deserves to be quashed on the ground that, Section 263 has no application in absence of the cumulative condition necessary for invocation of Section 263 i.e., neither the order is erroneous nor it is prejudicial to the interest of revenue.

3.

For that, the Learned Commissioner of Income Tax failed to appreciate Relief U/S 90 of the Income Tax Act 1961.which were verified by the Learned AO vide notice dt. 2nd Jan 2014 as well as C1T during the revision proceedings, hence the order of the Learned C1T is vitiated and bad in law. Without considering the evidences filed before the Learned CIT the order passed by him is liable to be quashed in the facts and circumstances of the case.

4.

For that, the order the Learned Commissioner of Income Tax, fails to ensure the confirmations form the employer, hence the order so passed by the Commissioner is bad in law should be quashed in the facts and circumstances of the case.

5.

For that, the appellant craves leave to add/amend/alter further grounds if any at the time of hearing of appeal.”

3.

The brief facts of the case are that the CIT observed that the

Assessing Officer completed assessment u/s.143(3) of the act by passing

order on 17.1.2014 determining the total income of the assessee at

Rs.18,42,590/-. The assessment records for the assessment year 2011-

12 was called and examined and it was observed that the Assessing

Officer has allowed relief of Rs.1,69,476/- u/s.90/91 of the I.T.Act, 1961

at the time of completion of regular assessment without the assessee

furnishing any documentary proof for the same. Therefore, the

assessment order dated 17.1.2014 is prejudicial to the interest of the

Revenue as relief of Rs.1,69,476/- u/s. 90/91 of the I.T.Act, 1961 was

allowed without any documentary proof. Hence, he set aside the order of

the Assessing Officer and restored the matter back to the file of the

Assessing Officer for adjudication of the issue afresh after allowing

adequate opportunity of hearing to the assessee.

4.

Ld A.R. of the assessee submitted that the Assessing Officer during

the course of assessment proceedings has written to the employer of the

assessee M/s. Keane India Limited, vide letter dated 2nd January, 2014.

He received the reply from the said company and after being satisfied had

passed order u/s.143(3) of the Act allowing relief of Rs.1,69,476/-

u/s.90/91 of the Act to the assessee, hence, the order of the CIT setting

aside the order of the Assessing Officer on the ground that while

completing the assessment, no documentary proof was examined by the

Assessing Officer for granting relief to the assessee, is not justified.

Therefore, the order of the CIT should be quashed. He further relied on

the decision of Hon’ble Delhi High Court in the case of Yoshio Kubo and

others vs CIT in ITA No.441/2003 and others, dated 31.7.2013, wherein,

Hon’ble High Court at page 43 para 42 of the order held that the amounts

paid by employers to pension, or social security funds, or for medical

benefits, are not perquisites within the meaning of expression, under

section 17(1)(v) and, therefore, the amounts paid by the employer in

that regard are not taxable in the hands of the employee-assessee.

5.

On the other hand, ld D.R. supported the order of the CIT.

6.

We have heard the rival submissions, perused the orders of lower

authorities and materials available on record. In the instant case, the

undisputed facts are that in the assessment framed u/s.143(3) of the Act

on 17.1.2014, the Assessing Officer allowed relief of Rs.1,69,476/-

u/s.90/91 of the Act being medicare contribution and social security

contribution paid by the employer of the assessee in US$ 1623.20

equivalent to Rs.1,69,476/-. Thereafter, the CIT passed order u/s.263 of

the Act on 7.1.2016 setting aside the order of the Assessing Officer on the

ground that while allowing relief u/s.90/91 of the Act of Rs.1,69,476/-,

the Assessing Officer has not examined any documentary proof for the

same.

Before us, ld A.R. of the assessee has filed a letter dated 2nd 7.

January, 2014 written by the Assessing Officer to M/s. Keane India Ltd.,

and submitted that the Assessing Officer during the course of assessment

proceedings sought information on the same and after being satisfied has

allowed the relief of Rs.1,69,476/- u/s.90/91 of the Act. He further relied

on the decision of Hon’ble Delhi High Court in the case of Yoshio Kubo and

others(supra), wherein, it was held that the amounts paid by employers

to pension, or social security funds, or for medical benefits, are not

perquisites within the meaning of expression, under section 17(1)(v)

and, therefore, the amounts paid by the employer in that regard are not

taxable in the hands of the employee-assessee.

8.

Ld D.R. relied on the order of the ld CIT but could not controvert the

above submission of ld A.R. of the assessee. Therefore, in our considered

view, the CIT was not justified in passing order u/s.263 of the Act dated

7.1.2016 setting aside the order of the Assessing Officer and

directing him for adjudication of the issue afresh. Hence, we set aside the

order of the CIT u/s.263 of the Act and allow the appeal of the assessee.

9.

In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 22 /09/2017. Sd/- sd/- (Pavan Kumar Gadale) (N.S Saini) JUDICIALMEMBER ACCOUNTANT MEMBER Cuttack; Dated 22 /09/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. Rajdeep Mohapatra, The Appellant : Gorakabar Road, Tulsipur, Cuttack 2. The respondent: ACIT, Circle 2(2), Cuttack 3. The CIT(A)- 4. Pr.CIT- Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER,

SR.PRIVATE SECRETARY ITAT, Cuttack

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