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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
The captioned appeal is preferred by the assessee and is directed against the impugned order dated 01/10/2014 of CIT(A)-28, Mumbai, pertaining to the assessment year 2008-09, which in turn has arisen from an order passed by the Assessing Officer dated 15/02/2014 under section 154 of the Income Tax Act, 1961( in short “the Act”).
In this appeal, although the assessee has raised multiple grounds of appeal, but the solitary dispute relates to the claim of exemption of Rs.4,16,156/- under section 10(10C) of the Act.
3. In brief, the relevant facts are that the appellant is an individual, who availed the Voluntary Retirement Scheme (VRS) offered by his employer i.e. State Bank of India during the previous year relevant to the assessment year under consideration. The assessee filed his return of income for assessment year 2008-09 on 16/07/2008 showing a total income of Rs.5,15,130/- and claimed refund of the credit of TDS of Rs.60,125/-. When the return was processed under section 143(1) of the Act , the credit for the TDS for Rs.60,125/- was not allowed and instead tax demand was determined at Rs.1,20,161/-. The assessee applied for a rectification under section 154 on two counts, firstly, for non-grant of credit of TDS for Rs.60,125/-; and, secondly, for the claim of exemption under section 10(10C) of the Act for Rs.4,16,156/- on account of an amount received as VRS from the employer i.e. State Bank of India. While the plea of credit for TDS was granted but the claim for exemption under section 10(10C) of the Act was denied on the ground that it was not originally claimed in the return of income filed. The said action of the Assessing Officer has further been affirmed by the CIT(Appeals).
Before me, the Ld. Representative for the assessee submitted that it was an inadvertent mistake that the claim of exemption under section 10(10C) of the Act of Rs.4,16,156/- was not depicted in the return of income in as much as the tax liability was otherwise computed after considering such exemption. It was pointed out that the TDS certificate issue by the employer of the assessee clearly evidenced such a claim and in any case the claim of the assessee under section 10(10C) of the Act on merits is unassailable.
On the other hand, Ld. Departmental Representative for the Revenue reiterated the stand of the lower authorities by pointing out that the impugned claim was not made in the return of income.
I have carefully considered the rival submissions. Here is a case where the Revenue does not dispute the merit of assessee’s claim for exemption under section 10(10C) of the Act of Rs.4,16,156/- representing the amount received as per VRS from his ex-employer i.e. State Bank of India. The claim has been denied merely for the reason that it was not properly claimed in the return of income. Ostensibly, the mistake in not staking such a claim formally in the return of income is to be viewed as an over-sight or an inadvertent mistake considering the facts and circumstances of the case. Quite clearly, when the assessee staked a claim for refund of the TDS of Rs.60,125/- in his return of income, it reflected a total income after the claim of the exemption under section 10(10C) of the Act . Otherwise, the income formally stated in the return of income was Rs.5,15,130/- and certainly this would not merit any refund, which was otherwise claimed by the assessee. The refund claimed in the return was based on reduction in the taxable income on account of exemption under section 10(10C) of the Act of Rs.4,16,156/-. This would have implied the final taxable income at Rs.98,974/-, which would correspond to assessee’s claim of seeking refund of the TDS in the return of income. In my view, the Assessing Officer has denied assessee’s claim on an over-technical ground, which is untenable. Substantively speaking, there is no dispute to the entitlement of the assessee for exemption under section 10(10C) of the Act on the amount received under VRS from his ex-employer i.e. State Bank of India. Thus, I set aside the order of the CIT(Appeals) and direct the Assessing Officer to allow the exemption to the assessee under section 10(10C) of Rs.4,16,156/- as per law.
In the result, the appeal of the assessee is allowed, as above. Order pronounced in the open court on 29/02/2016.