2015 (1) TMI 57 - AT - Income Tax

Relief u/s 89(1) for the amount received in excess of the amount eligible for exemption u/s 10(10C) - voluntary retirement scheme - Whether the assessee is entitled for exemption u/s 10(10C) Held that - Following the decision in Sail-dsp Vr Employees Association- 98 Versus Union of India And Others 2001 (4) TMI 57 - CALCUTTA High Court wherein it was held that the maximum exemption u/s 10(10C) of ₹ 5 lakhs is allowable as all the conditions of Section 10(10C) read with rule 2BA are fulfilled - If the sum is received in excess of ₹ 5 lakhs, the same was held eligible for relief under section 89 (1) - the sums are clearly the part of salary in the form of profits in lieu of salary as defined in Section 17(3) - these are amount of compensation received by, the employee from the employer in connections with the terms of employment and, therefore, the assessee are clearly entitled for relief u/s 89(1) in accordance with law in respect of the payments that are included in the total income Decided in favour of assessee. Condonation of delay of 2 years and seven months delay genuine and bonafide or not Held that - The assessee cannot be treated as a litigant who was not interested in pursuing the legal remedy against the assessment order - CIT(A) clearly vindicates the assessee s claim that he was acting on legal advice - The assessee was a bank employee and not a legal expert to know the niceties of his legal rights - in the present set of facts and the delay in filing the appeal before CIT(A) should have been condoned.

Summary

Issues:
Delay in filing an appeal against an order under the Income Tax Act, 1961.

Analysis:
The appeal was filed against an order of the Commissioner of Income Tax (Appeals) II for the assessment year 2007-08, seeking condonation of a delay of 2 years and 7 months. The assessee argued that the delay was unintentional due to reliance on legal advice and circumstances beyond their control. The ITAT considered similar cases where delays were condoned, emphasizing the need for substantial justice and a liberal approach in such matters.

The ITAT referred to a case where delay was condoned based on legal advice given to the assessee. The Tribunal highlighted the importance of the assessee's actions in pursuing legal remedies, even if based on erroneous legal advice. The ITAT cited the Supreme Court's stance on condoning delays to ensure substantial justice and equal treatment for all litigants, including the State.

The ITAT contrasted various decisions where delays were not condoned due to lack of sufficient reasons or negligence on the part of the assessee. The Tribunal stressed the need for diligence and a valid cause beyond the control of the party seeking condonation. In the present case, the ITAT found the delay justifiable due to reliance on legal advice, distinguishing it from cases of negligence or lack of diligence.

The ITAT, in line with previous judgments, condoned the delay in filing the appeal before the Commissioner of Income Tax (Appeals) and remanded the matter for fresh adjudication. The Tribunal recognized the entitlement of the assessee to exemption under section 10(10C) based on established legal precedents, allowing the appeal in favor of the assessee.

In conclusion, the ITAT upheld the appeal, following precedents and legal interpretations regarding the condonation of delays in filing appeals under the Income Tax Act, 1961. The decision aimed to ensure fairness, substantial justice, and adherence to legal principles in addressing delays in legal proceedings.