2026 (1) TMI 945 - AT - Income Tax

Arrears of retirement benefits for overseas service - entitlement to s.89/89A relief remitted to AO for fresh adjudication

Dominant issue: entitlement to relief under section 89/89A for arrears of retirement benefits received for services rendered abroad. Reasoning: AO/CIT(A) ... Non granting relief to appellant u/s 89/89A in respect of retirement benefit - assessee has received arrears of retirement benefit from the services rendered in USA - assessee has not been granted an opportunity to file revised return before 31/12/2023 - Department emailed the assessee regarding defective return, who has not allowed the assessee to submit the revise return. As argued CIT(A) dismissed the appeal without giving any opportunity to the assessee to submit his revised return as well as not granted any hearing to the assessee and the matter may be restored to the file of the AO HELD THAT:- In the light of submissions of the Ld.AR that the matter may be restored to the file of the AO for representing the assessee’s case for grant of exemption of arrears of salary u/s. 89A of the Act and whether the assessee is eligible for revise return to that extent. The matter is remanded back to the file of the AO for de novo adjudication - Appeal filed by the assessee is allowed for statistical purposes. Issues: (i) Whether the matter should be remanded to the Assessing Officer for de novo adjudication to permit the assessee to file a revised return and to consider grant of exemption of arrears of salary under Section 89/89A of the Income-tax Act, 1961.Analysis: The appeal concerns denial of opportunity to submit a revised return and to seek relief under Sections 89/89A in respect of retirement/arrears of salary. The record shows that no adjudication on the merits was made because the assessee was not afforded the opportunity to file a revised return or to be heard before the question of relief under Section 89A was decided. In view of the procedural deficiency, the appropriate course is to remit the matter to the Assessing Officer for fresh consideration in accordance with principles of natural justice, allowing the assessee to file a revised return and to present submissions on eligibility for exemption under Section 89A.Conclusion: The appeal is allowed for statistical purposes and the matter is remanded to the Assessing Officer for de novo adjudication, with directions to afford the assessee an opportunity to file a revised return and to be heard on the claim under Sections 89/89A of the Income-tax Act, 1961.