The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) condoned a 32-day delay in filing the appeal and remanded the matter to the Commissioner of Income Tax(Appeals)[CIT(A)] for adjudication on the exemption claim under section 10(10C) of the Income Tax Act,1961.
Altab Husen Ismail,appellant-assessee,retired from Bharat Sanchar Nigam Limited (BSNL) under the Voluntary Retirement Scheme(VRS). For the assessment year (AY)2020-21, he initially filed a return disclosing an income of Rs. 18,94,550/-, later revised to Rs. 7,09,380/-.
The assessee’s case was selected for scrutiny, and an addition of Rs. 11,85,171/- was made due to an excess exemption claim under section 10(10C), resulting in a tax demand of Rs. 3,62,901/-, which was paid by him.
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Later, the assessee received a penalty notice for under-reported income. Believing that no further action was needed after paying the tax, he sought advice from tax consultants. Following their advice, the assessee filed an appeal 32 days late.
The assessee had explained the delay in detail in a paper book submitted to the CIT(A). However, the CIT(A) dismissed the appeal, stating the delay was not properly explained, without addressing the merits of the case.
Aggrieved by the order of the CIT(A) the assessee appealed before the tribunal.
The two member bench comprising T.R Senthil Kumar(Judicial Member) and Annapurna Gupta(Accountant Member)reviewed the assessee’s submissions and found a reasonable cause for the 32-day delay in filing the appeal. It also noted that the assessee paid the disputed tax demand within three days of receiving the notice. Since the assessee, being a salaried person, had no prior experience with income tax litigation, the tribunal condoned the delay.
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The appellate tribunal noted that the CIT(A) had not addressed whether the retrenchment compensation of Rs. 16,85,171/- was exempt under section 10(10C) of the Act. Therefore,it sent the matter back to the CIT(A) to decide on the merits, giving the assessee a chance to present any relevant evidence.
In short,the appeal filed by the assessee was allowed for statistical purposes.
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