TMI Blog2015 (6) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the Assessing Officer to dispute the calculation made by the employer of the assessee. No clarification has been sought from the employer Bank. In that view of the matter, I do not see any reason for making disallowance of ₹ 24,295/- out of the amount of ₹ 2,14,167/- received by the assessee on account of leave encashment from his employer. - ITA No. 1165/Chd/2012 - - - Dated:- 17-6-2015 - H. L. Karwa (Vice President) For the Appellant : M. R. Sharma For the Respondent : R. K. Gupta, DR ORDER H. L. Karwa (Vice President) This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), Patiala dated 14.9.2012 relating to assessment year 2007-08. 2. In this appeal, the assessee has raised following grounds : 1. That the order of the Assessing Officer as upheld by the Commissioner of Income Tax (Appeals) Patiala is bad in law and is beyond all the cannons of law and justice. 2. That the order of the Commissioner of Income Tax (Appeals) Patiala dismissing the appeal filed by the appellant on the ground of the same being late and by not condoning the delay is bad in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned CIT (Appeals) refused to condone the delay of about 11 months in filing the appeal. However, the learned CIT (Appeals) has not given any findings on the merits of the case and hence, the assessee is in appeal before the Tribunal. 6. I have heard Shri M.R. Sharma, learned counsel for assessee and Shri R.K.Gupta, learned D.R for the Revenue at length and also perused the materials available on record. It is apparent from the records that the assessment order in this case was passed by the Assessing Officer on 13.12.2010 and the relevant notice of demand and the assessment order was served on the assessee on 28.12.2010. However, the assessee filed the appeal before the learned CIT (Appeals) on 21.12.2011. Thus, there is delay of about 11 months in filing the appeal before the learned CIT (Appeals). It is observed that alongwith memo of appeal, the assessee submitted an application for condonation of delay in filing the appeal duly supported by an affidavit. The reason for the delay given by the assessee was that he could not file an appeal against the order of assessment for the reasons beyond his control. The assessee was advised not to file any appeal due to the reasons that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these payments and therefore employees were under the bonafide belief that the retirement benefits are taxable under l.T. Act, 1961. However on 28/3/2007, Bombay Tribunal had in 222 appeals of the RBI employees held that they are entitled to benefit u/s 10(1 OC) and also u/s 89(1). Following that decision, the employees have filed the appeal. The delay Is therefore attributable to the incorrect legal advice. Appeal is filed after knowing an order of the Bombay Tribunal in favour of the employees. On this basis, these employees have prayed for condonation of delay. 4. On this issue we have heard Learned D. R. who has' submitted that the reason so advanced could not be said to be satisfactory. An assessee, who is not vigilant about his right, could not be helped by the machinery provided in the statute. On the other hand learned authorised representative for the assesses submitted that in the interest of justice, delay in filing appeal should be condoned. 5. We have considered the rival submission. In our view, delay in filing appeal by the above employees needed to be condoned in the interest of imparting substantial justice. Hon'ble Madras High Court in Venkatadr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the assesses, the appeals were filed and there was no delay thereafter. In such circumstances, the Tribunal held that in order to impart justice to the employees/assesses the delay deserves to be condoned. Accordingly, the Tribunal condoned the delay in filing the appeals. In the instant case also, the assessee was advised not to file appeal before the learned CIT (Appeals). However, the assessee came to know about the decision of the I.T.A.T., Division Bench, Chandigarh in the case of Shri Bikram Jit Passi (supra) and thereafter immediately the assessee preferred the appeal before the learned CIT (Appeals). The facts of the present case are similar to the facts of the case of Shri Arun Rohtagi Others (supra). Respectfully following the order of the I.T.A.T., Lucknow Bench in the case of Shri Arun Rohtagi Others (supra) I hold that the learned CIT (Appeals) should have condoned the delay in filing the appeal. Accordingly, I condone the delay in filing the appeal and admit the appeal for decision on merits. 8. As far as the merits of the case are concerned, the issue is squarely covered in favour of the assessee and against the Revenue by the decision of the I.T.A.T., Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispensed with and, therefore, it is only for the employer to frame the scheme for VRS or for earlier exit option. If Assessing Officer had any doubt about the scheme he could have enquired from the employer. So far as the assessee employee is concerned, he cannot be penalized and tax will be levied on him on the assumption that the scheme framed by employer is not in accordance with rule 2BA. In any case, the judgment of Third Member in Dy.CIT v. Krishna Gopal Saha (supra) is clearly applicable and we do not find any reason to take a different view. For the sake of convenience we refer to following para from the Third Member judgment in Dy.CIT v. Krishna Gopal Sahas case (supra) as under : 5. At the time of hearing before me, none appeared on behalf of the assessee-respondent. I have, therefore, heard the learned department Representative and perused the material placed before me. I find that the issue has been considered by the Hon'ble jurisdictional High Court in the case of SAIL DSP VR Employees Association 1998 v. Union of India (supra) in which their Lordships held as under : Section 10(10C) of the Income Tax Act, 1961, uses the expression any amount received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar in the assesses case, because in the case of the assessee also, the employer believing that the assessee is not entitled to deduction under section 10(10C) has deducted tax at source on the amount paid on voluntary retirement. The facts being identical, the above decision of Hon'ble jurisdictional High Court would be squarely applicable to the case under appeal before the Tribunal. 6. Similarly, Hon'ble Bombay High Court in the case of CIT v. Nagesh Devidas Kulkarni (supra) held as under : The assessee is entitled to the exemption under section 10(10C) of the Act and also rebate under section 89 of the Act in respect of the amount received in excess of ₹ 5,00,000 on account of voluntary retirement. Thus their Lordships have held that the assessee, who opts for voluntary retirement, is not only entitled to exemption under section 10(10C) but also rebate under section 89 of the Income Tax Act. Similar view is taken by the Hon'ble Karnataka High Court in the case of CIT v. P. Surendra Prabhu (supra) wherein their Lordships held as under : That the assessee, employee of the respondent bank was not only entitled to the benefit of exemption under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards ground No.4 of the appeal, I hold that there was no justification in making disallowance of ₹ 24,295/- out of ₹ 2,14,167/- received by the assessee as leave encashment, which was claimed as exempt under section 10(10AA) of the Act. It is apparent from the record that an amount of ₹ 2,14,167/- was paid to the assessee towards the earned leave due to the assessee for 240 days. This fact stands admitted by the Assessing Officer while completing the assessment. However, the Assessing Officer had made the disallowance disputing the calculation made by the employer of the assessee. In my opinion, there was no justification in disputing the calculation made by the employer of the assessee, particularly when the employer had allowed the said amount as a deduction after computing the same under the provisions of the law, which fact also stands admitted by the Assessing Officer. It is clear that the assessee had received an amount of ₹ 2,14,167/- as leave encashment and, therefore, there was no justification on the part of the Assessing Officer to dispute the calculation made by the employer of the assessee. No clarification has been sought from the employe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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