9911796707
TMI Blog2024 (12) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... te was paid to the assessee nor the employer had made any disallowance u/s 40(a)(v) of the Act. Therefore, the claim of exemption u/s 10(10CC) of the Act made by the assessee was wrong and incorrect. Similarly, the claim for exemption u/s 10(10BB) of the Act was also allowed by the AO without making any enquiry from the employer. It is thus evident from the above facts, that the AO had not conducted proper inquiries in respect of the claims as made in the return of income and, therefore, the order was rightly treated as erroneous and pre-judicial to the interest of revenue by the Ld. PCIT. As pointed out by the Ld. CITDR, it was held in the case of Navnit Lal Sakar Lal [ 2000 (11) TMI 1 - SUPREME COURT] that the amount utilized by the employer for obtaining deferred annuity policy would form part of remuneration payable to the assessee and was chargeable under the head salaries . Therefore, the annuity amount paid to LIC by the employer was remuneration of the assessee and taxable as salary. As the order of the AO was not in accordance with the decision of the Apex Court the order of the AO was erroneous and pre-judicial to the interest of revenue for this reason as well. It is a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and reproduced as under. Query-1..... Query 2: Vide para 3.1. Kindly clarify: Whether the LIC Annuity Policy payment and income-tax liability are both taken as perquisite in form No.16 of these employees for tax purpose. Whether the income-tax liability in respect of LIC Annuity Policy payment has been treated as exempt u/s 10(10CC) of Income Tax Act, 1961 in the form No. 16. If so, whether disallowance u/s 40(a)(v) of the Income-tax Act, 1961 has been made by you in your return of income in respect of Income-tax liability of these employees relating to LIC Annuity Policy payment borne by you as an employer. Response: In this regard, please our response as follows: No, the LIC Annuity Policy payment and income-tax liability are not taken as perquisite in form No. 16 of these employees. Also, neither the Income-tax liability in respect of such LIC Annuity Policy payment has been treated as exempt u/s 10(10CC) of the Income Tax Act, 1961 in form 16. Nor any disallowance u/s 40(a)(v) of the Income-tax Act, 1961 has been made in our return of income. The said LIC Annuity amount was paid to LIC on the request of these employees and hence such income paid under Voluntary Retirement Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO on the subjected issues and it was nothing but a case of change of opinion, based on which, assumption of jurisdiction u/s 263 is not permissible. The impugned order dt. 22.02.2024 therefore, lacks valid jurisdiction u/s 263 of the Act and hence, the same kindly be quashed. 4 The ld. Pr. CIT erred in law as well as on the facts of the case in wrongly setting aside the assessment order dated 20.04.2021 relying on the various judgements that are not subject matter of assessment. 5. Today is the 8th time of hearing of this appeal, none appeared on behalf of the assessee. Though Mr. Rajiv Goyal, Advocate filed Vakalat on behalf of the assessee and sought adjournment on the first time of hearing of this appeal namely on 23-07-2024 that one month time be given to file necessary materials and argue the case on merits. Thus the appeal was adjourned to 27-08-2024. It is thereafter no Representation from the assessee in spite of service of notices. This clearly shows that the assessee is not interested in pursuing the appeal further. 6. Per contra, Ld. CIT-DR Shri A.P. Singh appearing for the Revenue submitted that identical issue in case of the other employees M/s. GE Power India Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the AO did not make the enquiries and verifications which was required to be made before allowing the claim of the assessee and, therefore, the order of the AO was erroneous. In the absence of any follow up inquiry by the A.O., the contention of the assessee that the A.O. has applied his mind and taken one of the plausible views, cannot be accepted. 10. In the course of proceeding u/s 263 of the Act, Ld. PCIT had made inquiry from the employer M/s. GE Power India Ltd. in order to confirm the nature of payments made to the assessee. The relevant query made by the ld. PCIT and the reply of the employer as reproduced in the impugned order is found to be as under: Query 2: Vide para 3.1. Kindly clarify: Whether the LIC Annuity Policy payment and income-tax liability are both taken as perquisite in form No. 16 of these employees for tax purpose. Whether the income-tax liability in respect of LIC Annuity Policy payment has been treated as exempt u/s 10(10CC) of Income Tax Act, 1961 in the form No. 16. If so, whether disallowance u/s 40(a)(v) of the Income-tax Act, 1961 has been made by you in your return of income in respect of Income-tax liability of these employees relating to L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect. Similarly, the claim for exemption u/s 10(10BB) of the Act was also allowed by the AO without making any enquiry from the employer. 12. It is thus evident from the above facts, that the AO had not conducted proper inquiries in respect of the claims as made in the return of income and, therefore, the order was rightly treated as erroneous and pre-judicial to the interest of revenue by the Ld. PCIT. As pointed out by the Ld. CITDR, it was held by the Hon ble Supreme Court in the case of Navnit Lal Sakar Lal (supra) that the amount utilized by the employer for obtaining deferred annuity policy would form part of remuneration payable to the assessee and was chargeable under the head salaries . Therefore, the annuity amount of Rs. 15 lakh paid to LIC by the employer was remuneration of the assessee and taxable as salary. As the order of the AO was not in accordance with the decision of the Apex Court the order of the AO was erroneous and pre-judicial to the interest of revenue for this reason as well. 13. The decisions relied upon by the Ld. AR are all found different on facts and not applicable to the peculiar facts of this case. It is a trite law and a well settled position th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
