The single bench of the Madras High Court, in a recent decision held that the rvised return filed by the assessee on the basis of the Apex Court decision which was subsequently given effect by the CBDT circular, cannot be rejected by invoking limitation.
The petitioner in the instant case, was an employee of ICICI Bank. After retirement, the petitioner filed income tax return for the relevant assessment. Subsequently, the petitioner filed a revised return based on the Apex Court decision in S.PalaniappanVs. I.T.O.in which the Court held that a person, who has opted for voluntary retirement under the Early Retirement Option Scheme shall be entitled to exemption under Section 10(10C) of the Income Tax Act. Consequently, the CBDT issued a circular clarifying that that the judgment of the Hon’ble Supreme Court be brought to the notice of all officials in the respective jurisdiction so that relief may be granted to such retirees of the ICICI Bank under Early Retirement Option Scheme, 2003. However, the Department proposed to reject the return on ground that it is beyond the time stipulated under Section 139(5).
Justice T.S Sivagnanam pointed out that the technicality should not stand in the way while giving effect to the order passed by the Hon’ble Supreme Court.In the opinion of the Court, the Board is entitled to exercise its power and relax the requirement contained in Chapter IV or Chapter VI-A, if the default in complying with the requirement was due to circumstances beyond the control of the assessee.
Diving deeply into the facts of the case, the court observed that on the basis of the decision of the Supreme Court, the Board as issued the said circular accepting the legal position laid down by the Court and communicated it to the officials. Therefore, the petitioner cannot be non-suited solely on the ground that he had filed a revised return well beyond the period stipulated under Section 139(5) of the Act.
“If such a power is conferred upon the Board, this Court, while exercising jurisdiction under Article 226 of The Constitution of India, would also be entitled to consider as to whether the petitioner’s case would fall within one of the conditions stipulated under Section 119(2)(c).” the Court said.
“Considering the hard facts, the petitioner, being a senior citizen, cannot be denied of the benefit of exemption under Section 10(10C) of theAct and the financial benefit that had accrued to the petitioner, which would be more than a lakh of rupees. Therefore, this Court is of the view that the third respondent should grant the benefit of exemption to the petitioner.”
Read the full text of the Judgment below.
