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2016 (5) TMI 140 - HC - Income TaxExemption under Section 10 (10C) denied - Held that - The impugned order of CIT(A) is totally silent with regard to the communication dated 11th November, 2010 addressed by his office to Mr. Ravikant Shet exemployee of SBI, similarly situated as the Petitioner, intimating to him that the benefit of exemption under Section 10(10C) of the Act is being extended. It is pertinent to note that the Commissioner of Income Tax, Thane who has passed the impugned order was the same person whose office had addressed the communication dated 11th November, 2010 and also passed the order dated 13th September, 2010 under Section 264 of the Act in respect of Shri Ravikant Shet. The impugned order dated 12th March, 2012 passed by the Commissioner of Income Tax, Thane is quashed and set aside. Respondents are directed to extend the benefit of Section 10(10C) of the Act to the Petitioner and grant the refund within eight weeks from today.
Issues:
1. Exemption under Section 10(10C) of the Income Tax Act for voluntary retirement benefits. 2. Natural justice violation in the order passed under Section 264 of the Act. 3. Discrepancy in treatment of similar cases by the Commissioner of Income Tax, Thane. Issue 1: Exemption under Section 10(10C) of the Income Tax Act for voluntary retirement benefits: The petitioner, a senior citizen and former employee of the State Bank of India (SBI), opted for voluntary retirement under the Exit Option Scheme during the Assessment Year 2008-09. The petitioner received an amount from SBI upon retirement and claimed exemption under Section 10(10C) of the Act for a portion of this amount in her income tax return. However, the Assessing Officer disallowed the claim for refund based on a circular by the Central Board for Direct Taxes (CBDT) stating that retirement benefits from SBI are not eligible for exemption under Section 10(10C). The petitioner filed a Revision Application under Section 264 of the Act with the Commissioner of Income Tax, Thane, citing precedents where similar cases were granted exemption under Section 10(10C). The Commissioner rejected the petitioner's application, leading to the petitioner challenging this decision in the High Court of Bombay. Issue 2: Natural justice violation in the order passed under Section 264 of the Act: The High Court found that the impugned order by the Commissioner of Income Tax, Thane was in breach of natural justice as it relied on a communication received from SBI regarding a different case without providing this information to the petitioner. Moreover, the order did not address a communication sent by the Commissioner's office to another ex-employee of SBI, indicating the extension of the exemption under Section 10(10C). This lack of transparency and failure to consider relevant communications amounted to a violation of natural justice principles. Issue 3: Discrepancy in treatment of similar cases by the Commissioner of Income Tax, Thane: The High Court noted that in similar cases to that of the petitioner, where employees of SBI sought exemption under Section 10(10C) upon retirement, the Tribunal and the Court had granted relief. The Court highlighted specific cases where such relief was upheld, indicating a consistent approach in granting exemptions to SBI retirees. Considering these precedents and the fact that the petitioner was in a similar position as others granted relief, the Court quashed the impugned order and directed the respondents to extend the benefit of Section 10(10C) to the petitioner, ordering the refund to be granted within a specified timeframe. In conclusion, the High Court's judgment in this case revolved around the issues of exemption under Section 10(10C) of the Income Tax Act, natural justice violations in the order passed under Section 264 of the Act, and the discrepancy in treatment of similar cases by the Commissioner of Income Tax, Thane. The Court's decision favored the petitioner, emphasizing the importance of fair treatment, consistency in decision-making, and adherence to legal principles in tax matters.
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