The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) has held that the survival benefit of Rs. 2.25 lakhs on death of his father received by him was an exempt income under Section 10(10D) of the Income Tax Act, 1961.
Further, the bench observed that an assessee can raise points of law even through a rectification application.
Venkatraman Rajiv, the assessee, filed his income tax return for the financial year 2017-18. In the income tax return, the assessee reported an exempt income of Rs. 72.40 lakhs. On single premium insurance, the assessee received a survival benefit of Rs. 2.25 lakhs from LIC.
The assessee submitted a rectification application in which he claimed a survival benefit of Rs. 2.25 lakhs on death of his father as exempt income and his claim was rejected by the CIT(A) because the assessee had not increased the total exempt income to Rs. 74.65 lakhs in the rectification application. Later, the assessee filed an appeal with the Tribunal.
The assessee argued that he could raise the points of law even through a rectification application and stated that the survival benefit of Rs. 2.25 lakhs was an exempt income under Section 10(10D) of the Income Tax Act, 1961 and he further argued that the CIT(A) had erred in not considering his claim on a technicality.
The revenue department contended that the assessee had not increased the total exempt income to Rs. 74.65 lakhs in the rectification application and contended that the assessee could not raise the points of law for the first time through a rectification application and stated that the CIT(A) had rightly not considered the assessee’s claim.
The Tribunal observed in the case of NTPC vs. CIT (1998) 229 ITR 383 that it is open for the assessee to raise the points of law even before the appellate authorities when consideration thereof does not require any inquiry into the facts or calling for any fresh evidence.
In the case of Goetze (India) Ltd vs. CIT (2006) 284 ITR 323 (SC) it was held that the assessee can raise points of law even through a rectification application if the rectification application is filed within the prescribed time limit and the points of law are not frivolous or vexatious.
The Two Member bench comprising Rama Kanta Panda (Vice President) and K. Narasimha Chary (Judicial Member) held that the assessee could raise the points of law even through a rectification application.
The Tribunal also held that the survival benefit of Rs. 2.25 lakhs was an exempted income under Section 10(10D) of the Income Tax Act, 1961. However, the Tribunal set aside the order of the CIT(A) and referred the matter back to the AO for verification.
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