TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 642
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....off vide this common order for the sake of convenience. ITA No. 471/AHD/2023: 2. The assessee has e-filed his return of income for A.Y. 2018-19 on 22.08.2018 declaring total income of Rs. 10,91,730/-. The assessment was completed u/s 143(3) of the Act on 24.02.2021 and the returned income was accepted. Thereafter, the Ld. PCIT examined the case records and found that the order of the A.O. was erroneous and pre-judicial to the interest of Revenue, as certain exemptions were wrongly allowed, contrary to the provisions of law, in respect of salary income. The reason for which the order of the A.O. was found to be erroneous, as recorded in Para 3 of the PCIT's order u/s 263 of the Act, was as under: 3. As per details of salary, the employer has shown payment under Voluntary Retirement Scheme amounting to Rs. 2180652/- and it forms part of salary u/s 17(1) in form 16. It is noticed that against this payment Rs. 2180652/-, the Assessing Officer has allowed following exemption over on basis of assessee's submission dated 08.04.2020: * Rs. 15,00,000/- as amount paid by the employer directly to LIC for purchasing the annuity policy * Rs. 4,50,000/ claimed u/s 10(10CC) of the ....
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....Grounds of Appeal: 1. The ld. Pr. CIT, seriously erred in law as well as on the facts of the case in invoking the provisions of Sec. 263 of the Act and therefore, the impugned order dated 29.03.2023 u/s 263 of the Act kindly be quashed. 2. The ld. Pr. CIT seriously erred in law as well as on the facts of the case in assuming jurisdiction u/s 263 of the Act by wrongly and incorrectly holding that this renders the order erroneous in so far as prejudicial to the interest of revenue as exemptions have wrongly been allowed in respect of salary income contrary to provisions of income tax law and without conducting any inquiry in the matter. 3. The ld. Pr. CIT erred in law as well as on the facts of the case in wrongly setting aside the assessment order dated 24.02.2021 despite there being complete application of mind by 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. 29.03.2023 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 se....
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..... 36,95,179/-, the A.O. should have critically examined why the salary disclosed in the IT return was much lesser. He further submitted that the A.O. did not make any inquiry with the employer to verify the genuineness of the exemptions as claimed in the return. In the absence of any such enquiry the order of the AO was certainly erroneous and prejudicial to the interest of revenue. As regarding sum of Rs. 15 lac paid by the employer directly to LIC for purchasing the Annuity policy, the Ld. CIT- DR submitted that this issue was covered by the decision of the Hon'ble Supreme Court in the case of CIT Vs. Navnit Lal Sakar Lal 113 taxmann.com 692 (SC), and there was no two opinion in respect of this issue. He also placed reliance on the decision of the Hon'ble Delhi High Court in the case of Yoshio Kubo Vs. CIT 36 taxmann.com 1 (Delhi) and the decision of coordinate bench of this tribunal in the case of Sanghi Infrastructure Ltd. in ITA No. 1285/AHD/2018. 6. We have carefully considered the submissions made by the rival parties and the materials brought on record. The moot question to be decided in this case is whether the order of the A.O. was erroneous and prejudicial to the intere....
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.... (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. 7. As per the Explanation 2, the order passed by the A.O. shall be deemed to be erroneous and pre-judicial to the interest of revenue if the order is passed without making inquiries or verifications which should have been made or where the order is passed allowing any relief without enquiring into the claim. Further as per clause (d) of the Explanation, if the order is not passed in accordance with any decision rendered by the Supreme Court in any case and which is pre-judicial to the assessee, then in such instance also the order will be held as erroneous and pre- judicial to the interest of revenue. We have to, therefore, examine as to whether these conditions were fulfilled in this case and whether the assumption of jurisdiction by the Ld. PCIT u/s 263 of the Act was correct. 8. There is no dispute to the fact that gross salary shown in Form No. 16 was Rs. 40,50,274/- and after allowing exemption in respect of conveyance, gratuity, leave encashment and tax on emplo....
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....ure termination of his employment. 2. Pursuant to your notice the assessee visited the office of the employer company several times to seek relevant material to be furnished to you but due to covid-19 pandemic he was handicapped and not allowed to access into the office and his efforts could not materialize. His serviced were terminated he is entitled to retrenchment compensation under the provisions of law. It is self evident from Form 16 in which a huge amount has been shown as payment to the assessee and it represents compensation. His age is around 34 years at the time of termination of his employment and he has not completed with full tenure of service which proves that he received big amount of compensation for loss of employment. 3. A copy of the income tax computation statement showing break-up of compensation issued by the employer is enclosed is A_1. 4. You have misinterpreted the true implication and real import of the provisions of section 17(2)(v) of IT Act, 1961 corresponding to section 7(1) of IT Act 1922 and ignored the landmark verdicts of the Hon'ble Apex Court and the Hon'ble High Courts resulting in gross miscarriage of justice. The sum of Rs....
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..../s 10(10CC) of the Act were shown as part of gross salary in Form No. 16 issued by the employer. No follow up inquiry was made by the A.O. with the employer to find out whether the payment of Rs. 15 lac to LIC was made by the employer or whether this payment was on behalf of the employee. When the assessee had failed to furnish any confirmatory evidence from the employer the AO should have made direct enquiry from the employer to find out of reason for the difference between salary as per Form No. 16 and the salary as disclosed in the ITR. Such enquiry was mandatorily required when the assessee had contended that the employer had wrongly shown the salary in Form-16. It is thus evident from these facts 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 t....
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..... The deduction u/s 10(10CC) of the Act is available in respect of tax paid by employer for a non-monetary perquisite derived u/s 17(2) of the Act. The employer can't claim any deduction for such perquisite and the same is liable to be disallowed u/s 40(a)(v) of the Act. The AO didn't make any enquiry from the employer about payment of perquisite of Rs. 4,50,000/- which was claimed exempt u/s 10(10CC) of the Act and had allowed the claim of the assessee. The enquiry made by the PCIT from the employer revealed that neither any perquisite 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. 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. CIT-DR, it was held by the Hon'b....