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Income Tax Appellate Tribunal, BENCH “SMC”, KOLKATA
Before: Hon’ble Shri N.V.Vasudevan, JM]
This is an appeal by the assessee against the order dated 16.12.2009 of CIT(A)-XIV, Kolkata relating to A.Y.2004-05.
The assessee is an employee of Reserve Bank of India, (RBI) who opted for Voluntary retirement under the “Optional Early Retirement Scheme (OERS)”. During the previous year relevant to AY 2004-05, the assessee received a sum of Rs.5,99,924/- on retirement under OERS. The Assessee filed a return of income for AY 2004-05 declaring total income of Rs.4,04,672/- on 15.10.2004 claiming exemption u/s.10(10C) of the Income Tax Act, 1961 (Act). Sec.10(10C) of the Act reads thus:
“Section 10(10C) reads as under : Any amount received or receivable by an employee of — (i) a public sector company; or (ii) any other company; or (iii) an authority established under a Central, State or Provincial Act; or (v) a co-operative society; or (vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or (vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961); or (viia) any State Government; or (viib) any Central Government; or (viic) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in Official Gazette, specify in this behalf; or (viii) such institute of management as the Central Government may, by notification in the Official Gazette, specify in this behalf, on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i), a scheme of voluntary separation, to the extent such amount does not exceed five lakh rupees :
Provided that the schemes of the said companies or authorities, or societies or Universities or the Institutes referred to in sub-clauses (vii) and (viii) as the case may be, governing the payment of such amount are framed in accordance with such guidelines (including, inter alia, criteria of economic viability) as may be prescribed :
Provided further that where exemption has been allowed to an employee under this clause for any assessment year, no exemption thereunder shall be allowed to him in relation to any other assessment year;
Provided also that where any relief has been allowed to an assessee under section 89 for any assessment year in respect of any amount received or receivable on his voluntary retirement or termination of service or voluntary separation, no exemption under this clause shall be allowed to him in relation to such, or any other, assessment year.”
Under the first proviso to Sec.10(10C) of the Act, the Scheme has to satisfy the guidelines as may be prescribed. Rules have been framed and we are concerned with r. 2BA. The relevant portion of the rule reads as under :
".....at the time of his voluntary retirement or voluntary separation shall be exempt under cl. (10C) of s. 10 only if the scheme of voluntary retirement framed by the 3 Sri Anupam Biswas. A.Yr.2004-05 aforesaid company or authority or co-operative society or university or institute, as the case may be : (i) it applies to an employee who has completed 10 years of service or completed 40 years of age; (ii) it applies to all employees (by whatever name called) including workers and executives of a company or of an authority or of a co-operative society, as the case may be, excepting directors of a company or of a co-operative society; (iii) the scheme of voluntary retirement or voluntary separation has been drawn to result in overall reduction in the existing strength of the employees; (iv) the vacancy caused by the voluntary retirement or voluntary separation is not to be filled up; (v) the retiring employee of a company shall not be employed in another company or concern belonging to the same management; (vi) the amount receivable on account of voluntary retirement or voluntary separation of the employee does not exceed the amount equivalent to three months salary for each completed year of service or salary at the time of retirement multiplied by the balance months of service left before the date of his retirement on superannuation." The Assessee claimed exemption of Rs.5,00,000/- u/s 10(10C) of the Act. The return filed by the Assessee was processed u/s.143(1) of the Act on 29.3.2005. Subsequently notice u/s.148 of the Act was issued on 25.4.2005 on the ground that the deduction u/s.10(10C) of the Act was not admissible. It has been the stand of the revenue in the case of employees of RBI that benefit of deduction u/s.10(10C) of the Act cannot be allowed as the conditions prescribed in the Rules were not satisfied. The Assessee filed a return in response to the notice u/s.148 of the Act withdrawing the claim for deduction u/s.10(10C) of the Act made in the original return of income. The said return was accepted by the AO and an order u/s.148 read with Sec.143(3) of the Act was passed on 8.8.2006. Subsequently the Assessee noticed that his colleagues who received similar sums under OERS succeeded in judicial proceedings in getting deduction u/s.10(10C) of the Act. The Assessee therefore sought legal recourse to get deduction u/s.10(10C) of the Act by filing appeal against the order of the AO dated 8.8.2006. The counsel however, without filing an appeal, filed an application for rectification u/s.154 of the Act before the AO on 12.2.2008. The AO dismissed the application of the Assessee u/s.154 of the Act by an order dated 14.8.2008holding that 4 Sri Anupam Biswas. A.Yr.2004-05 there was no apparent mistake in his order calling for rectification. On appeal by the Assessee, the CIT(A) by an order dated 16.12.2009 confirmed the order of the AO. An appeal against the aforesaid order of CIT(A) ought to have been filed within 60 days from the date of receipt of the said order. The appeal before Tribunal was however filed after a delay of 1737 days. The reasons for the delay in filing appeal by the Assessee are dealt with in the subsequent paragraphs.
The assessee has filed an affidavit explaining the reasons for the delay in filing the appeal. I have perused the said affidavit in which the delay has been explained as follows: The assessee had entrusted his tax case to one Mr.Mr.Naresh Sarkar and later to Shri Shyamal Sen for filing of appeal before ITAT against the order of CIT(A). Because of callousness and lack of commitment of the aforesaid two persons the appeal could not be filed by the assessee. The assessee also suffered health problems both neurological and cardiological and found it difficult to move outside his residential flat. The assessee has only one married daughter, who was also suffering from depression due to marital problems and fully dependent on the assesse for her survival. In view of the aforesaid circumstances the assessee could not file the appeal by following up with the Authorised Representative. The assessee after realizing that similar claims made by his colleagues was accepted by the Tribunal and those colleagues received refund form the department pursued the matter vigorously and had filed the appeal in the end of November, 2014 after getting a proper reference of the present AR from his colleagues.
I have considered the reasons given in the application for condonation of delay and are fully satisfied that the delay in filing the appeal and the several judicial pronouncement on the approach to be adopted in dealing with delay in filing appeals referred to by the learned AR in his submissions before the Tribunal.
The Hon’ble Supreme Court, in the case of Mst. Katiji (supra), has explained the principles that need to be kept in mind while considering an application for 5 Sri Anupam Biswas. A.Yr.2004-05 condonation of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. In the case of Vedabai Alias Vaijayantabai Baburao Patil Vs. Shantaram Baburao Patil & others 253 ITR 798(SC), the Hon’ble Supreme Court in the matter of codonation of delay substantial justice is of prime importance. Similar were the ruling of the Hon’ble Supreme Court in the case of N.Balakrishanan Vs. M.Krishnamurthy 1998 (7) SCC 123 (SC) and Shankararo Vs. Chandrasenkunwar (1987) suppl.SCC 338 (SC).
I find that the issue whether deduction u/s.10(10C) of the Act should be allowed to RBI employees retiring under OERS is no longer res integra and has been concluded in several decisions including the decision in the case of CIT Vs. Koodathil Kaliyatan Ambujakshn (2008) 219 CTR (Bom) 80. In fact the CBDT in Instruction dated 8.5.2009 has accepted this decision and opined that employees of RBI who accepted ;OERS would be entitled to the benefit of Sec.10(10C) of the Act.
Now the situation in the present case is that the Assessee would be entitled to the benefit of deduction u/s.10(10C) of the Act but the delay in filling the appeal would be the only hurdle in not getting such benefit. Tax liability has to be in accordance with law and no tax shall be levied or collected save under the authority of law. There cannot be a liability to tax by default. Keeping in view the principles emanating from the decisions referred to above and keeping in view the fact that the Assessee would be otherwise entitled to the benefit of deduction u/s.10(10C) of the Act and keeping in mind the circumstances in which the appeal of the Assessee was filed belatedly, we are of the view that the delay in filing the appeal should be condoned. When the very liability of the assessee was non-existent the delay in filing appeal should be condoned. I am of the view that the delay in filing the appeal was due to a reasonable cause. I accordingly condone the delay in filing the appeal.
As far as the merits of the claim of the assessee for deduction u/s 10(10C) of the Act, as already observed by me, the issue whether deduction u/s.10(10C) of the Act should be allowed to RBI employees retiring under OERS is no longer res integra and has been concluded in several decisions including the decision in the case of CIT Vs. Koodathil Kaliyatan Ambujakshn (2008) 219 CTR (Bom) 80. In fact the CBDT in Instruction dated 8.5.2009 has accepted this decision and opined that employees of RBI who accepted OERS would be entitled to the benefit of Sec.10(10C) of the Act. In view of the above, we hold that the claim for deduction u/s.10(10C) of the Act has to be allowed to the Assessee. The fact that the Assessee voluntarily offered the sum in question to tax cannot be the basis to sustain the levy of tax. I therefore hold that there was a mistake apparent on the face of the record and the application u/s.154 of the Act filed by the Assessee ought to be allowed. I direct the AO to allow deduction accordingly.
In the result, the appeal by the Assessee is allowed. Order pronounced in the court on 09.12.2015.