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2017 (3) TMI 1181 - AT - Income TaxDisallowance claim for exemption under section 10(10C) - Held that - Assessee has placed on record the copies of Form No. 16 issued by the employer for A.Ys. 2009-10 and 2010-11, which clearly show that the amount on voluntary retirement was not only paid by the employer to the assessee in the previous year relevant to A.Y. 2010-11, but the same was also included in his total income and tax was also deducted in A.Y. 2010-11. The assessee, in my opinion, thus was entitled to claim the exempt ion under section 10(10C) for A.Y. 2010-11 as claimed and not in A.Y. 2009-10 as held by the authorities below. Moreover, a mere fact that the exemption under section 10(10C) was not shown by the employer in Form No. 16 issued for A.Y. 2010-11, in my opinion, cannot be the basis for disallowing the claim of the assessee and that too while processing his return of income under section 143(1). Therefore, set aside the impugned order of the ld. CIT(Appeals) on this issue and direct the Assessing Officer to allow the claim of the assessee for exemption under section 10(10C). - Decided in favour of assessee
Issues: Disallowance of exemption claim under section 10(10C) of the Income Tax Act, 1961.
Analysis: 1. The appellant, an individual working as Deputy Manager (Finance), was released from service on voluntary retirement and claimed exemption of ?5,00,000 under section 10(10C) of the Income Tax Act, 1961. The Assessing Officer disallowed this claim, stating that the exemption was allowable in A.Y. 2009-10, not in A.Y. 2010-11, as claimed by the assessee. 2. The appellant moved an application for rectification under section 154, which was rejected by the Assessing Officer. The ld. CIT(Appeals) also upheld this decision, stating that the claim was made for the wrong assessment year. The appellant then appealed to the Tribunal against this order. 3. The Tribunal reviewed the case and found that the employer had paid the amount on voluntary retirement in the previous year relevant to A.Y. 2010-11, and it was included in the appellant's total income with tax deducted accordingly. The Tribunal held that the appellant was entitled to claim the exemption under section 10(10C) for A.Y. 2010-11 and not for A.Y. 2009-10 as determined by the lower authorities. 4. The Tribunal emphasized that the mere absence of the exemption under section 10(10C) in the Form No. 16 for A.Y. 2010-11 should not be the basis for disallowing the claim. Therefore, the Tribunal set aside the order of the ld. CIT(Appeals) and directed the Assessing Officer to allow the appellant's claim for exemption under section 10(10C). 5. Consequently, the Tribunal allowed the appeal of the assessee, ruling in favor of the appellant and pronouncing the order on March 15, 2017.
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