By TIOL News Service

CHENNAI, DEC 15, 2016: THE ISSUE IS - Whether benefits extended by CBDT u/s 119(2) for all retirees under Early Retirement option Scheme, can be denied to a similarly placed retiree on ground of belated filing of revised return, if such default was due to circumstances beyond his control. NO IS THE VERDICT.

Facts of the case:

The assessee is a retired employee of the ICICI Bank. Consequent to finalised assessment of his return, the assessee came to know that the Supreme Court, in the case of S.Palaniappan Vs. I.T.O. has held that a person, who has opted for voluntary retirement under the Early Retirement Option Scheme shall be entitled to exemption u/s 10(10C), and following the said decision, the CBDT had issued a circular stating that the judgment of Supreme Court be brought to the notice of all officials so that relief may be granted to such retirees under ERO Scheme. The assessee, on coming to know of the same, filed a revised return by referring to the said decision. However, this was rejected by the ITO on ground of time barred filing u/s 139(5).

On appeal, the HC held that,

++ It is to be noted that CBDT has issued circular with a view to grant relief to the retirees of the ICICI Bank under Early Retirement Option Scheme, and the same was in in exercise of powers conferred u/s 119. Admittedly, the case, which was considered by the Supreme Court related to an individual employee namely S.Palaniappan, who was also a similarly placed person as that of the assessee. Thus, the Board while implementing the judgement in the case of S.Palaniappan, took a decision that such a benefit should be extended to the similarly placed persons treating them as class of cases. Therefore, the Board observed that the order should be communicated to all the Commissioners, so that relief can be granted to such retirees of the ICICI Bank. Thus, the assessee cannot be non-suited solely on the ground that he had filed a revised return well beyond the period stipulated u/s 139(5). Furthermore, it is relevant to point out that Section 119(2)(c) states that the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, relax any requirement contained in any of the provisions contained in Chapter IV or Chapter VI-A of the Act, which deal with computation of total income and deductions to be made in computing the total income and such power is exercisable where the petitioner failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the conditions that (i) the default is due to circumstances beyond the control of the assessee and (ii) the assessee has complied with the requirement before the assessment in relation to previous year, in which, such deduction is claimed;

++ Thus, if the default in complying with the requirement was due to circumstances beyond the control of the assessee, the Board is entitled to exercise its power and relax the requirement contained in Chapter IV or Chapter VI-A. If such a power is conferred upon the Board, this Court would also be entitled to consider as to whether the assessee's case would fall within one of the conditions stipulated u/s 119(2)(c). Considering the hard facts, the assessee, being a senior citizen, cannot be denied of the benefit of exemption u/s 10(10C) and the financial benefit that had accrued to him, which would be more than a lakh of rupees. Therefore, this Court is of the view that the ITO should grant the benefit of exemption to the assessee.

(See 2016-TIOL-3012-HC-MAD-IT)