TMI Blog2023 (11) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms of employment letter of the assessee, the aforesaid amount paid to the assessee as compensation towards discharge of his services was voluntary in nature, as is evident in the terms of employment. Accordingly, in our considered opinion, the case of the assessee was directly covered in his favour by case of Arunbhai R. Naik(supra). Thus severance compensation received by the assessee on voluntary basis towards termination of employment from his employers is a capital receipt and, hence, not taxable in the hands of the assessee. Further, even the Department has not contested the claim of the assessee that the aforesaid amount is not taxable in the hands of the assessee as his income. The same should not have been taxed in the hands of the assessee as his taxable income and the same was liable to be deleted u/s. 154 of the Act. Decided in favour of assessee. - Mrs. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri Gunjan Kakkad, AR For the Revenue : Shri Ashok Kumar Suthar, Sr.DR ORDER PER SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER: This appeal filed by the Assessee is directed against the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the Act. 7. On the facts and circumstances of the case and in law, the voluntary exgratia payment received by the Appellant cannot be considered as compensation for the purpose of section 17(3)(i) of the Act. Ground No.4: Violation of principles of natural justice 8. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in not providing any opp0ortunity of personal hearing before disposing the appeal of the Appellant. 9. On the facts and circumstances of the case and in law, the Ld.CIT(A) has failed to consider the submission of the Appellant in a proper perspective which has resulted into a flaw in the decision making process. 10. On the facts and circumstances of the case and in law, the Appellant submits that the order of the Ld.CIT(A) and that of DCIT CPC deserves to be quashed on account of failure to comply with principles of natural justice. 11. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in not appreciating the fact that the Appellant had made detailed submissions and he has erred in holding that no submissions were filed. 3. The brief facts of the case are that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed us. 143(1) by CPC as such since the return did not warrant any adjustment coming within the ambit of Section 143(1) of the Act. 4.4. Now, the appellant seeks to make a fresh claim that the income shown under the head Salary comprised of certain one-time settlement and that it is exempt from income. These are new facts and new claims which do not arise from the return filed. Further, these fresh claims also entail a long-drawn process of verification of new facts outside the records and also involves seeking third party confirmation from the employer concerned etc., which is clearly outside the scope and ambit of section 154 of the Act. 4.5. It is pertinent to note that the original intimation which was sought to be rectified was issued us. 143(1) of the Act and hence it is not a case of passing of a detailed scrutiny assessment order. When the fresh claim now being sought to be made could not have been examined by the A while processing the return u/s. 143(1) of the Act, the same cannot be done through the subterfuge of rectification proceedings us. 154 of the Act, because of the scope of section 154 cannot go beyond the original jurisdiction itself. 4.6. What t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceed to decide the allowability or otherwise of the relief on the basis of the facts and material available before him. 4.10. For detailed reasons cited as above, the rejection of appellant's application us. 154 seeking to modify the intimation u/s. 143(1) dated 16.03.2021 by the AO does not warrant any interference on facts and in law. The Grounds raised in this regard fail. COME TAX DEPART 5. Conclusion: 5.1. In the result, the appeal is dismissed 5. The ld.counsel for the assessee submitted that firstly, on perusal of the return form (ITR-2) there is no specific column, wherein such income could have been shown as exempt income . Secondly, it was submitted that the aforesaid income, which was received by the assessee gratuitously was on account of retrenchment of the assessee due to restructuring of the assessee s employer-company and the aforesaid payment was paid as a result of termination of the employment of the assessee. The ld.counsel for the assessee drew our attention towards several judicial precedents which have held that such one time compensation paid by the employees towards severance of employees is a capital receipt and not taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant pursuant to the judgment of the High Court was income liable to tax under section 17(3) of the Act. 7.1. Even in the instant facts, we observe that on perusal of the terms of employment letter of the assessee, the aforesaid amount paid to the assessee as compensation towards discharge of his services was voluntary in nature, as is evident in the terms of employment. Accordingly, in our considered opinion, the case of the assessee was directly covered in his favour by the order passed by the Hon ble Gujarat high Court in the case of Arunbhai R. Naik(supra). Further, it is also observed that the aforesaid order passed by the Hon ble Gujarat High Court on 12/10/2015, which was prior to the date of passing of the order u/s. 143(1) of the Act dated 18/10/2017 and, hence, would apply to the impugned assessment year under consideration. 7.2. Further, we also observe that in the case of Ajay B. Ghose vs. DCIT CPC in ITA No.1720/Mum/2021, the assessee s employment was terminated by the same employer M/s.Areva India Pvt.Ltd. and the assessee had received an amount of Rs. 74,28,585/- towards severance pay due to the loss of employment from the employer M/s.Areva India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce compensation received by the assessee on voluntary basis towards termination of employment from his employers is a capital receipt and, hence, not taxable in the hands of the assessee. Further, even the Department has not contested the claim of the assessee that the aforesaid amount is not taxable in the hands of the assessee as his income. In the case of DCIT vs. Justice Dilip Kumar Seth reported at [2006] 98 ITD 241 (Kol.):: [2006] 101 TTJ 90 (Kol), the ITAT held that the Assessing Officer is well competent to rectify any mistake in the intimation u/s. 143(1) of the Act which was brought to his notice by the assessee. Further, the Hon ble Delhi High Court in the case of Pawan Kumar Aggarwal vs. CIT in ITA No.199/2014 has held that from bare reading of section 154 of the Act, it is apparent that the power of rectification extends to amendment of an intimation or deemed intimation u/s. 143(1) of the Act. The Hon ble High Court further held that this power of rectification enures even after the matter has been considered and decided in any proceedings by way of appeal or revision. It was held that necessarily this power extends even at the stage of the appeal and further appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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