TaxTMI 
TaxTMI 
2024 (12) TMI 767
X X X X Extracts X X X X
X X X X Extracts X X X X
.... perusal of the assessment order, the Ld. PCIT found that the assessee claimed Annuity payment of Rs. 15,00,000/- was made to LIC as not taxable, which is contrary facts on record and against the provisions of law. Therefore a show cause notice issued why not to deny the claim of exemption made by the assessee. 3.1. In response, the assessee filed a reply which was considered by Ld. PCIT and set-aside the assessment by observing as follows: "6.5. Thus, the A.O. has allowed exemption on Rs. 15 lakhs on incorrect assumption of facts and contrary to provisions of law wherein the VRS amount is taxable as salary income and exemption is restricted to Rs. 5 lakhs u/s 10(10C) of the Act.. Further, during the course of proceedings u/s 263 of the Income-tax Act, 1961 in case of employees of GE Power, the necessary clarifications have been obtained from employer M/s. GE Power Ltd. in respect of employees to whom VRS benefits were paid. The reply is self-explanatory and reproduced as under. "Query-1..... Query 2: Vide para 3.1. Kindly clarify: Whether the LIC Annuity Policy payment and income-tax liability are both taken as perquisite in form No.16 of these employees for tax purpose. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... interest of revenue within the meaning of section 263 of the Act." 4. Aggrieved against the Revision order, assessee is in appeal before us raising the following 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 22.02.2024 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 20.04.2021 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. 22.02.2024 therefore, lacks va....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in respect of non-monetary perquisite of Rs. 4.5 lakh claimed exempt u/s 10(10CC) of the Act. The A.O. accepted the submissions of the assessee on its face value and did not examine as to why the payment of Rs. 15 lac paid to LIC as well as the amount of exemptions claimed u/s 10(10B) and u/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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore, this was shown as part of salary in Form No. 16. It also revealed from the enquiry made by the Ld. PCIT that the exemption of Rs. 4,50,000/- claimed u/s 10(10CC) of the Act and of Rs. 4,51,900/- u/s 10(10B) of the Act was not correct and not in accordance with the provisions of law. 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....