2021 (11) TMI 316 - AT - Income Tax

ITAT remands tax case for fresh consideration emphasizing legal precedents & documentation

The ITAT set aside the CIT(A)'s decision in a case concerning the rejection of a rectification application under section 154 of the Income Tax Act, 1961, ... Rectification of mistake u/s 154 - Assessee seeking rectification of intimation claiming that an amount received as gratuity is not exigible to tax in view of the judgement of Avinash Chand Puri & Others [2013 (7) TMI 1179 - PUNJAB AND HARYANA HIGH COURT] - AO rejected the application on the ground that mistake is not apparent from record. - Thereafter the assessee filed a second revised return in physical form again claiming refund on the basis of his contention but d. CIT(A) dismissed the appeal filed by the assessee and confirmed the action of the AO holding that the issue has not attained finality and, therefore, there is no mistake apparent from record - assessee submitted before us that this issue is covered in favour of the assessee by the decision of the Delhi Bench of the Tribunal in ACIT, Circle- 33(1) New Delhi Vs Pearls of Beauty [2017 (7) TMI 999 - ITAT DELHI] wherein the Tribunal has upheld the findings of the ld. CIT(A) directed the AO to allow the claim of deduction u/s 80IB and 80IC in the ROI of the relevant assessment year with the consequential relief HELD THAT:- As perused the material on record including the decision of the Delhi Bench of the Tribunal aforesaid relied upon by the ld. counsel. We notice that the facts of the case relied upon by the assessee are not identical to the facts of the present case, therefore the decision is not applicable to the assessee’s appeal. Moreover, as pointed out by the Ld. DR, the coordinate Bench of the Tribunal has mentioned in the order sheet dated 08.10. 2020 that the Hon'ble High Court has already heard the case involving the identical issue and the Bench has directed the assessee to produce the copy of order or status of the said case. Since, the assessee has not filed the said order/ status till date, we do not deem it appropriate to decide the present appeal or to keep this appeal pending. Hence, we set aside the impugned order passed by the Ld. CIT(A) and send the file back to the AO to decide the issue afresh in accordance with the order of the Hon'ble High Court in CWP referred above after affording a reasonable opportunity of being heard to the assessee. We further direct the assessee to produce the copy of the Hon'ble High Court before the AO. Appeal of the assessee is allowed for statistical purposes. Issues:Appeal against order u/s 154 of the Income Tax Act, 1961 for the assessment year 2011-12.Analysis:The assessee filed a rectification application u/s 154 seeking to exclude gratuity from taxable income based on a High Court judgment. The AO rejected the application, leading to an appeal before the CIT(A). The CIT(A) dismissed the appeal, stating the issue was not final. The assessee challenged this decision on various grounds, including the rejection of rectification. The assessee cited a Tribunal decision supporting their claim. The Departmental Representative supported the CIT(A)'s decision, highlighting the absence of crucial documents. The ITAT found the cited Tribunal decision not directly applicable and noted the absence of the High Court judgment in question. Consequently, the ITAT set aside the CIT(A)'s order and remanded the case to the AO for fresh consideration in line with the High Court's decision, directing the assessee to provide a copy of the High Court judgment.This judgment primarily revolves around the rejection of a rectification application under section 154 of the Income Tax Act, 1961, concerning the taxability of gratuity. The key issue was the applicability of a High Court judgment cited by the assessee. The CIT(A) dismissed the appeal, citing the issue's lack of finality. The ITAT, after considering arguments from both sides, found the Tribunal decision cited by the assessee not directly relevant and emphasized the absence of the crucial High Court judgment in the case. As a result, the ITAT set aside the CIT(A)'s decision and remanded the case to the AO for fresh consideration in light of the High Court's ruling, directing the assessee to provide the necessary documentation.This judgment highlights the importance of providing relevant legal precedents and documents to support claims in tax matters. It underscores the need for thorough documentation and adherence to legal procedures to substantiate arguments effectively. The decision emphasizes the significance of following established legal principles and ensuring all necessary documents are presented for a fair and informed decision-making process. The ITAT's ruling underscores the requirement for parties to provide complete and relevant documentation to support their claims and enable a comprehensive and accurate assessment of the issues at hand.