S.D.S. Mongia vs Central Board Of Direct Taxes
2006 Latest Caselaw 1973 Del

ORDER

1. The petitioner has made the following prayers in this writ petition under article 226 of the Constitution of India:

(a) quash the impugned order dated 20-11-2002 condone the delay in filing the revision petitions for the assessment years 1990-91, 1991 92 and 1993-94 and hear the same on merits;

(b) quash the impugned order dated 20-11-2002 of the respondent No. 2 holding that so far as assessment year 1990-91 was concerned, the revision petition could not be entertained as an appeal had been preferred by the assessed for that assessment year;

(c) direct the respondent No. 2 to condone the delay in filing the revision petitions for the assessment years 1990-91, 1991-92 and 1993-94 and hear the same on merits;

(d) direct the assessing officer, Ward No. 24(l), New Delhi, to exclude the income in respect of amount received by the petitioner as pension from LIC (which is exempt from tax under Section 10(13)(ii) of the Act), from the assessable income for the above said three years, i.e., assessment years 1990-91, 1991-92 and 1993-94;

(e) direct the respondent No. 1 to issue necessary directions in exercising of its powers under Section 119 of the Act to the concerned authorities to do justice in the case and exclude the item of exempt income from the total income of the petitioner and grant consequential relief;

(f) pass such other or further orders as this Hon'ble court may deem fit and proper under the circumstances of the case.

2. The petitioner had filed an application under Section 264 of the Income Tax Act (hereinafter referred to as Income Tax Act) which was rejected by the Commissioner of Income-tax by the impugned order dated 20-11-2002 on the grounds that it was barred by limitation. Having heard counsel for the parties we are of the view that the impugned order of the Commissioner cannot be faulted. Accordingly, we are not prepared to entertain prayers (a) to (c). However, the prayer (a) above is still open for consideration under article 226 of the Constitution.

3. Section 4 is the charging section under the Income Tax Act. Section 10 lists out item of income which would not be included in the computation of total income. Clause (it) of Sub-section (13) of Section 10 excludes from the total income "any payment from an approved superannuation fund made to an employee in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement."

4. The conundrum which has arisen in this case is entirely of the petitioner/assessed's making. He offered for taxation the annuity received by him from the superannuation fund which was exempted from inclusion in the total income by virtue of Section 10(13)(ii) for the years 1989-90 to 1993-94. Ms. Bansal, learned counsel for the revenue, has vociferously contended that the taxability of this income is not beyond debate, in that it can be brought to tax by virtue of Section 17(2)(v) of the Income Tax Act. So far as that is concerned, it has rightly been pointed out by the counsel for the petitioner that tax has been paid by the assessed under that provision. This does not, however, mean that the petitioner would not be entitled to relief under Section 10(13)(it) of the Income Tax Act.

5. As has already been mentioned above, the amount which stood excluded under Section 10(13)(it) was offered by the petitioner/assessed for tax for the assessment years 1990-91, 1991-92 and 1993-94. In respect of assessment year 1992-93, the petitioner has already obtained relief up to the stage of the ITAT. That decision has not been assailed by the department.

6. Since the extraordinary jurisdiction of this court has been invoked, the constraints that may have been felt by the Commissioner in deciding the assessed's revision application under Section 264 would not impinge on the powers of the court under article 226 of the Constitution to correct an injustice that has occurred albeit because of the petitioner/ assessed himself. Article 265 of the Constitution mandates that no person shall be taxed without the authority of law. Since in the present case there is no authority to tax the annuities received by the petitioner, we consider it appropriate to exercise our extraordinary powers to correct the injustice.

7. At this juncture we may note that Ms. Bansal, learned counsel for the department, placed reliance on the judgment of the Hon'ble Supreme Court in CIT v. Shelly Products to contend that the department could not be faulted for accepting the returns filed by the assessec where he himself had offered for tax the sum received from the superannuation fund. On a considered view of the matter, we do not see how the judgment in Shelly Products case (supra) can be said to apply in the facts of the present case.

8. We are of the view that, in the facts of the present case, there is no justification for the amounts received by the petitioner from the superannuation fund for the assessment years 1990-91, 1991-92 and 1993-94 to be brought to tax in view of the specific exclusion of such sum from the total income in terms of Section 10(13)(it) of the Act.

9. In these circumstances, prayer (a) is allowed and the petition stands disposed of accordingly.

10. There will obviously be no order as to costs.