2016 (9) TMI 1212 - AT - Income Tax

Fresh claim of exemption by way of application u/s 154 - Claim of exemption under Section 10(10C) - Held that - In this case, admittedly, revised return was not filed by the assessee. The fact remains that what was received by the assessee is retirement benefit consequent to Early Retirement Option Scheme, 2003 implemented by ICICI Bank. Therefore, the assessee is eligible for exemption under Section 89(1) and 10(10C) of the Act. The Apex Court in the case of National Thermal Power Co. Ltd. (1996 (12) TMI 7 - SUPREME Court ) found that this Tribunal can entertain an additional claim provided the facts are on record. When the assessee is eligible for exemption under Section 89(1) and 10(10C) of the Act, the same can very well be brought to the notice of the Assessing Officer. This Tribunal is of the considered opinion that the Assessing Officer has to examine the same on merit. In view of the above, this Tribunal is unable to uphold the order of the lower authority and accordingly, the same is set aside. The Assessing Officer shall examine the claim on merit and thereafter decide the issue in accordance with after giving a reasonable opportunity to the assessee. - Decided in favour of assessee

Summary

Issues:
Claim for exemption under Section 10(10C) of the Income-tax Act, 1961 - Delay in filing appeal - Maintainability of appeal before CIT(Appeals) - Power of Tribunal to entertain additional claim - Rectification of error under Section 154 of the Act.

Detailed Analysis:

1. Claim for Exemption under Section 10(10C):
The assessee, a retired employee of ICICI Bank, received retirement compensation and claimed relief under Section 89(1) of the Act. Subsequently, the assessee sought exemption under Section 10(10C) through a petition under Section 154, which was rejected. The contention was that the assessee omitted to claim the exemption initially. The Ld. counsel argued that the Revenue should inform the assessee of eligibility for exemption and that the delay in filing the appeal should not penalize the assessee.

2. Delay in Filing Appeal and Maintainability:
The appeal was filed almost eight years after the intimation under Section 143(1) of the Act. The CIT(Appeals) condoned the delay and found the appeal maintainable, even though the petition under Section 264 was rejected. The Revenue did not challenge this decision. The Ld. D.R. argued that the assessee cannot make a fresh claim under Section 154 for exemption under Section 10(10C) without filing a revised return.

3. Power of Tribunal to Entertain Additional Claim:
The Tribunal has the power to entertain additional grounds and claims arising from the facts of the case, as established by the judgments in National Thermal Power Co. Ltd. and Goetze (India) Ltd. The Ld. counsel suggested remitting the matter back to the Assessing Officer if necessary.

4. Rectification of Error under Section 154:
The Ld. D.R. contended that the assessee cannot claim exemption under Section 10(10C) through a petition under Section 154 without filing a revised return. However, the Tribunal found that the Assessing Officer should examine the claim on merit and decide accordingly, providing a reasonable opportunity to the assessee.

Conclusion:
The Tribunal allowed the appeal, emphasizing the eligibility of the assessee for exemption under Section 89(1) and 10(10C) of the Act. It directed the Assessing Officer to consider the claim on merit, setting aside the lower authority's decision. The judgment highlighted the obligation of the Revenue to refund excess tax paid in certain cases and the assessee's right to bring relevant facts to the Assessing Officer's notice for appropriate relief.