The Tax Publishers2020 TaxPub(DT) 4319 (Pat-HC)

CONSTITUTION OF INDIA, 1950

Article 226 Section 89

Where assessee was in receipt of arrears of pension through SBI, the petitioner was directed to make a required application to the AO having jurisdiction of the matter for the grant of relief under section 89 in accordance with the provisions of the statute and SBI was, therefore, directed to extend all assistance to the petitioner to enable him to avail such relief.

Writ - Relief under section 89 - Jurisdiction of AO -

On 14-3-2016, the petitioner submitted an application to the Branch Manager of SBI, Chandwara Branch to commence the petitioner's pension and pay the arrears in pension. The petitioner also submitted a request not to deduct income tax on the amount by treating it as income of the current year, to spread over/distribute the payment over the period, under section 89 of the IT Act read with rule 21A(2)(d) of the IT Rules. This was done to ensure that the income-tax on the arrears of pension was not deducted by treating the amount as taxable income of the current year and is spread over in the relevant years from 2007 to 2016. On 30-3-2016, the petitioner made a similar application and requested the CPPC, Patna. The petitioner, further, furnished before the CPPC, all necessary details and calculation sheet for pension as required under with section 192(2A) as well as Form 10E of the IT Department, for claiming relief under section 89(1). The petitioner argues that this deduction of income-tax constitutes an illegal deduction from his pension as it is without regard to the statutory provisions, which allow a spread over/distribution of pension amount. If the spread over of amount were followed, the petitioner's total income would not be falling within taxable limits and as such no income tax would be deductible at source. Therefore, making the deduction of pension by SBI is arbitrary, without jurisdiction and unconstitutional. The petitioner submitted that the petitioner, being a senior citizen, is exempted from paying income tax in advance, under section 207(2). It was SBI's case that as per section 89(1), the AO of Income Tax Department was the only authority that could grant relief under the section. This is done at the time when the petitioner files his income-tax return as per the Income Tax Act and makes an application under section 89. In the first place, petitioner was wrong in approaching the SBI for availing the required relief. Moreover, the petitioner already had a remedy to get a refund under section 237. Accordingly, the Court directed the employee to make a necessary application before the ITO to claim relief under section 89, and the officer to act immediately in disposing of the said application. Held: It was for the AO of income tax to grant relief under section 89. The Apex Court held that the employees who were eligible for the benefit of section 89, had to apply before the ITO to avail benefit of the section. The SBI's obligation is to only deduct amounts in accordance with section 192(2A). In not doing so, the SBI had made illegal deductions from the petitioners pension and therefore ought to be directed to refund the amount to the petitioner. This instant case was not a writ against the order of the AO disallowing relief. The petitioner had failed to approach the relevant authority under the IT Act to claim relief. In the present case it was not the petitioner's case that the available alternate remedy under the IT Act is ineffectual and non-efficacious while invoking the writ jurisdiction of the High Court. The appropriate forum for availing relief under section 89(1) is the AO, and the petitioner must apply to the AO to avail the benefit of section 89. Accordingly, the petitioner was directed to make a required application to the AO having jurisdiction of the matter for the grant of relief under section 89 in accordance with the provisions of the statute. The SBI was directed to extend all assistance to the petitioner to enable him to avail such relief.

REFERRED :

FAVOUR : Matter remanded.

A.Y. :



IN THE PATNA HIGH COURT

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