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Shri Lila Dhar Pandey, Gayatri Nagar, Phase-III, Kusum Khera Haldwani, Nainital (Uttarakhand) Vs Asstt. Commissioner of Income Tax, Haldwani
August, 08th 2014
                 DELHI BENCH `D', NEW DELHI
  Before Sh. S. V. Mehrotra, AM And Sh. Joginder Singh, JM
             ITA No. 5806/Del/2011 : Asstt. Year : 2006-07

Shri Lila Dhar Pandey,       Vs    Asstt. Commissioner of Income
Gayatri Nagar, Phase-III,          Tax, Haldwani
Kusum Khera Haldwani,
Nainital (Uttarakhand)
(APPELLANT)                        (RESPONDENT)
                 Assessee by : Sh. S. K. Chaturvedi, CA
                 Revenue by : Sh. S. N. Bhatia, DR

Date of Hearing : 5.8.2014         Date of Pronouncement : 7.8.2014

Per Joginder Singh, JM:

     This is an appeal by the assessee challenging the order of the ld.
CIT(A) dated 20.10.2011 on the following grounds:-
   "1. That the L. ACIT erred in initiating proceedings u/s 147 of
   the Act, which are bad in law, liable to be cancelled. The instant
   case is a case of mere change of opinion, which does not permit
   initiation of proceedings u/s 147 of the Act. The L. CIT(A) has
   erred under law and facts of the case in confirming the A/O
   which is bad in law, liable to be quashed.

   2. That the proceedings u/s 147/148 have wrongly been initiated
   which were without any fresh material on record, hence liable
   to be quashed. There was no tangible material before the
   Assessing Officer to hold that income had escaped assessment
   within the meaning of sec. 147 and the reasons recorded for
                                2                    ITA No. 5806/Del/2011
                                                         Lila Dhar Pandey

reopening the assessment constituted a mere change of opinion.
Therefore, the reassessment is not valid, liable to be quashed.
That it has been held by the Hon'ble S. C. and various H. Cs.
And Hon'ble ITAT that in absence of fresh material which could
lead to formation of opinion that there was escapement of
income, change of opinion cannot be a reason of reopening of
assessment. It has also been held that in case of different view
on same facts and material, reopening of assessment cannot be
sustained. It has also been held that mere change of opinion
does not provide jurisdiction to initiate proceedings u/s 147 of
the Act.

3. That while issuing notice u/s 147/148 the reasons of belief as
to what income escaped assessment have not been stated nor
communicated to the appellant. The notice so issued is bad in
law and no assessment could have been made on the basis of
invalid notice.

4. That it has been held by the Hon'ble I.T.A.T. Delhi in the
case of M/s Delhi Auto & Gen. Finance (P) Ltd. Vs CIT (1994)
122 Taxation 124, that an order u/s 143(1)(a) was an order of
assessment so long as not struck down as an invalid order. In
the present case the order u/s 143(1)(a) was never struck down
as an invalid order and merely on the basis of change of
opinion assessment has been reopened which is not permissible
under law. By going through the assessment record it is very
much clear that the claim of exemption u/s 10(10C) was allowed
by the L. Assessing Authority vide A/o u/s 143(1) dt. 23.02.2007
on the basis of documents available on record after applying his
brain and giving full thought and proper consideration. But
subsequently by change of opinion the case has been reopened
and proceedings u/s 147 have been initiated. The instant case is
purely a case of change of opinion and the proceedings u/s
147/148 are bad in law and liable to be vacated. The view as
expressed by the Hon'ble Kolkata H. C. in the case of Berger
                                3                    ITA No. 5806/Del/2011
                                                         Lila Dhar Pandey

Paints India Ltd. Vs ACIT (2010) 232 CTR (Cal) 338, is relied
upon. The L. A/O has suppressed the fact of initiation of
proceedings u/s 154 and dropping the same vide order dt.
16.04.2007 u/s 154. This act of the L. A/O is against the
principles of natural justice.

5. That the authorities below have erred in not considering the
written submissions dt. 27.08.2010, 15,09.2010 and 23.09.2010
furnished before the L. A/O properly where in it was submitted
that the proceedings u/s 147 as initiated are bad in law being
against the settled principles of law, hence liable to be dropped
and notice issued is liable to be vacated. The A/O so completed
is liable to be quashed as various objections raised by the
appellant against proceedings u/s 147 have not been discussed
at all.
6. That the authorities below have miserably failed in not
considering properly various judicial pronouncements relied
upon by the appellant on the point of proceedings u/s 147/148
and claim of exemption u/s 10(10C).

7. That the L. CIT(A) has erred under law in not considering
and giving a proper thought on the point of exemption claimed
u/s 10(10C) in the light of various legal objections raised
against proceedings u/s 147 and various judicial
pronouncements and documentary evidence relied upon by the
appellant in support of his claim of exemption allowable u/s
10(10C) with further relief u/s 89(1).

8. That without prejudice to the plea that proceedings initiated
u/s 147 are against the settled principles of law and the
assessment order so completed is liable to be quashed, the
appellant is entitled for exemption u/s 10(10C) with further
relief u/s 89(1) of the Act as claimed."
                                    4                       ITA No. 5806/Del/2011
                                                                Lila Dhar Pandey

2.   At the time of hearing we have heard Shri S. K. Chaturvedi, ld.
Counsel for the assessee and Shri S. N. Bhatia, ld. Senior DR. At the
outset the ld. Counsel for the assessee did not press grounds no. 1 to
6, therefore, these grounds are dismissed as not pressed.

3.   The only ground raised before us pertains to Chapter-III,
income which do not form part of total income, u/s 10(10C) of the
Act for claiming relief u/s 89(1) of the Act. The crux of argument
advanced on behalf of the assessee is that the benefit of sec. 10(10C)
of the Act was wrongly denied to the assessee for which reliance was
placed upon the decision in the case of Shri B. C. Pandey Vs ACIT
(ITA No. 5805/Del/2011) and Jeevan Chandra Kabadwal Vs DCIT
(ITA No. 3152/Del/2010). On the other hand, the ld. Senior DR
defended the conclusion drawn by the ld. Assessing Officer as well as
the ld. CIT(A).

4.   We have considered the rival submissions and perused the
material available on record. The facts in brief are that the assessee
declared income of Rs. 2,11,012/- on 15.6.2006 which was processed
u/s 143(1) of the Act on 23.2.2007. It was noticed by the Assessing
Officer that assessee has claimed exemption of Rs. 5,00,000/- u/s
10(10C) of the Act, being the amount received as ex gratia under Exit
Option Scheme of State Bank of India. The assessee was asked to
explain his stand. In compliance to notice issued to the assessee the
                                   5                    ITA No. 5806/Del/2011
                                                            Lila Dhar Pandey

assessment proceedings were attended from time to time and also
preferred written submission. The assessee was a bank employee,
disclosed income from salary at Rs. 10,50,211/- and claimed
exemption of Rs. 5,00,000/- u/s 10(10C) of the Act. The Assessing
Officer in view of Circular No. CIRDO/HR/72/2006-07 dated
8.8.2006 of Human Resources Department held that the ex gratia
payment will be added to the income of the employee and thus, made
the addition. On appeal, the ld. CIT(A) also affirmed the stand taken
by the ld. Assessing Officer. The aggrieved assessee is in appeal
before this Tribunal. We note that this issue is already settled by
various judicial pronouncements in favour of the assessee some of
them are as under:-

i)    SAIL DSP Vs Employees Association Vs Union of India 262
ITR 638 (Cal)
ii)   DCIT Vs Krishna Gopal Saha 121 ITD 368 (Cal) (TM)

5.    Without adverting further and respectfully following the
decision in the case of Shri Bhuvan Chandra Pandey (ITA No.
5805/Del/2011)    and    Jeevan    Chand     Kabadwal     (ITA       No.
3152/Del/2010), it is held that the assessee entitled to exemption u/s
10(10C) of the Act. The reasoning contended in these orders is self-
explanationtry and in the absence of any contrary decision we find
merit in the appeal of the assessee. Thus, this ground of the assessee
is allowed.
                                               6                         ITA No. 5806/Del/2011
                                                                             Lila Dhar Pandey

6.      Finally appeal of the assessee is partly allowed.

7.      This order was pronounced in the open court in the presence of
ld. Representative from both sides at the conclusion of the hearing on

                     Sd/-                                                 Sd/-
   (S. V. Mehrotra)                                              (Joginder Singh)
ACCOUNTANT MEMBER                                              JUDICIAL MEMBER
Dated: 7/8/2014
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
                                                               ASSISTANT REGISTRAR

                                                        Date   Initial
1.     Draft dictated on                            5.8.2014              PS
2.     Draft placed before author                   5.8.2014              PS
3.     Draft proposed & placed before the                                 JM/AM
       second member
4.     Draft discussed/approved by Second                                 JM/AM
5.     Approved Draft comes to the Sr.PS/PS                               PS/PS
6.     Kept for pronouncement on                                          PS
7.     File sent to the Bench Clerk                                       PS
8.     Date on which file goes to the AR
9.     Date on which file goes to the Head Clerk.
10.    Date of dispatch of Order.
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