2006 (11) TMI 621 - HC - Income Tax

Exemption u/s10(13)(ii) - Income received as pension from LIC - HELD THAT - Since in the present case there is no authority to tax the annuities received by the petitioner, we consider it appropriate to exercise our extraordinary powers to correct the injustice. We are of the view that, in the facts of the present case, there is no justification for the amounts received by the petitioner from the super annuation fund for the assessment years 1990-91, 1991-92 and 1993-94 to be brought to tax in view of the specific exclusion of such sum from the total income in terms of section 10(13)( ii) of the Act. Thus, prayer (d) is allowed and the petition stands disposed of accordingly.

Summary

Issues:
1. Petitioner's prayers under article 226 of the Constitution of India.
2. Rejection of petitioner's application under section 264 of the Income-tax Act.
3. Interpretation of section 10(13)(ii) of the IT Act regarding income exclusion.
4. Taxability of annuity received by the petitioner.
5. Relief obtained by the petitioner for assessment year 1992-93.
6. Exercise of extraordinary jurisdiction under article 226 of the Constitution.
7. Application of the judgment in CIT v. Shelly Products [2003] 261 ITR 367.
8. Justification for excluding amounts received from the superannuation fund from tax for assessment years 1990-91, 1991-92, and 1993-94.

Analysis:
1. The petitioner sought to quash the impugned order dated 20-11-2002, condone the delay in filing revision petitions for assessment years 1990-91, 1991-92, and 1993-94, and exclude pension income from assessable income. The Commissioner rejected the application under section 264 of the IT Act as time-barred. The Court upheld the rejection but considered excluding pension income under section 10(13)(ii) for assessment years 1990-91, 1991-92, and 1993-94.

2. Section 10(13)(ii) excludes certain payments from an approved superannuation fund from total income. The petitioner offered the annuity for taxation but contended for relief under this section. The Court noted the tax paid under section 17(2)(v) but affirmed the petitioner's entitlement to relief under section 10(13)(ii).

3. The Court highlighted that the petitioner had already obtained relief for assessment year 1992-93 up to the ITAT stage. The department did not challenge this decision. The Court emphasized the importance of correcting injustices, even if caused by the petitioner, under article 226 of the Constitution.

4. The Court addressed the department's reliance on CIT v. Shelly Products [2003] 261 ITR 367, stating it was inapplicable to the present case. The Court found no justification for taxing amounts received from the superannuation fund for assessment years 1990-91, 1991-92, and 1993-94 due to the specific exclusion in section 10(13)(ii).

5. Ultimately, the Court allowed prayer (d) to exclude the pension income from tax for the mentioned assessment years, disposing of the petition accordingly. No costs were awarded.