AIBSNLPWA

 DIVISIONAL SECRETARY SPEAKS:

Last year IT DEPT. EC UNIT Bangalore sent notice to some of our comrades.Our GS wrote a letter to Director ,IT Dept NewDelhi.Requested individuals to send representation.Most of the cases were closed by IT department.Once again notices were received by Some of our comrades from IT department.Individual comrades who received such notices are requested to reply to IT department by name to the concerned officer who signed the notice.Correction may made in the appeal draft.

MODEL LETTER:

From

………………..

PAN: ………………..

Address: ……………..

……………….

……………..

Mobile No. …………………..

Email-id: …………………….

 

To

Shri Alex Mathew, ITO (GC),

C.R Buildings, Queens Road, Bangaluru-560001

Date:

 

Sir,

Sub:      PAN No. ……………………

A.Y.

Notice under section 154 of Income Tax Act 1961 Ref:        DIN ………………………. dated …………….

I received a notice under section 154 of Income Tax act 1961, I hereby submit the following points for your perusal and consideration:

 

Right at the outset, I would like to submit that the notice under Section 154 of the I.T. Act, is misconceived and untenable in law, for the following reasons:

 

1.    When BSNL was formed on 1/10/2000, the employees of Department of Telecom were transferred en-masse to that PSU. Before formation of BSNL, on 25/9/2000, DoT prepared a Cabinet Note which was approved by the Cabinet. Para 4.4 of that ‘Note’ deals with HR issues. The leave at credit both EL & HPL as on 30/9/2000 was also transferred. Department of Pension & Pensioners Welfare issued a gazette notification on 30/9/2000 amending Rule 37 of CCS (Pension) Rules, 1972. All those officials were absorbed in accordance with Rule 37-A of CCS (Pension) Rules, 1972 which deals with the retirement benefits on combined service (rendered both in DoT & BSNL).

 

2.              It is also pertinent to reproduce hereunder, sub-rule 8 & 24 of Rule 37A of CCS (Pension) Rules, 1972, which reads as under:

(8) A permanent Government servant who has been absorbed as an employee of a PSU and his family shall be eligible for pensionary benefits on the basis of combined service rendered by the employee in the Government and in the PSU in accordance with the formula for calculation of such pensionary benefits as may be in force at the time of his retirement from the PSU or his death or at his option, to receive benefits for the

service rendered under the Central Government in accordance with the orders issued by the Central Government.

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(24)     Upon conversion of a Government department into a public sector undertaking or autonomous body –

 

(b) Earned leave and half pay leave at the credit of the employees on the date of absorption shall stand transferred to such undertaking or body, as the case may be;”

 

3.    The encashment of leave pertaining to DoT period is fully exempted from Income tax under section 10AA (i). The encashment of leave pertaining to BSNL period is taxable beyond Rs. 3 lakhs in accordance with section 10 AA (ii).

 

4.    Taking all these factors into consideration BSNL corporate office issued a pertinent order dated 4/5/2012 vide No.1001-04/2011- 12/Taxation/BSNL/LE/176 in this connection (copy enclosed).

 

5.          The issue already stands settled through judicial decision of the

I.T.A.T. Mumbai vide decision dated 05.02.2019 in the case titled “Babulal Patel (who was an employee of DoT absorbed in PSU called MTNL) vs. The ITO Ward 34(1)(2) Bandra East, Mumbai”, wherein the Ld. ITAT had decided the issue in favour of the Assessee. It is pertinent to point out that the Income Tax Department has accepted the said decision and had not preferred any appeal against it. Thus, the issue has attained finality, and in favour of the assessee (copy enclosed).

 

6.          Thus, having already accepted the decision of the ITAT on the issue, the department is bound by the same and cannot act contrary to the same or adopt a different stand on the same issue concerning other similarly placed person(s) like the present assessee.

 

7.          It is with this understanding of the provisions of law that whatever earned leave that an employee earned while rendering service in the Department of Telecom prior to his permanent absorption in the BSNL, the encashment of the same is exempted completely,

and leave encashment relating to that portion of the leave which the employee earned after absorption in BSNL would be subject to the exemption limit of Rs.3 lakhs, the disbursers have been rendering suitable certificate, certifying the amount of Earned Leave relating to Department period and that earned in the BSNL, and accordingly regulating the computing and deducting the Income Tax.

 

8.          CPC, Bengaluru should have ascertained the facts from the disburser viz. BSNL before issuing any demand to the assessee notice under Rule 154 of ITR.

 

9.              Accordingly, the ITR filed by me for the AY ........ was purely based upon the form16 issued by BSNL deducting the tax as applicable and further as per details available in form 26AS. Further, exemption u/s Section 10(10AA)(i) in form 16 was given by the BSNL based on my services rendered and leave earned during the services rendered under Govt of India is correctly calculated. As such, I humbly submit that there is no undue exemption applied by me at that point of time, as has been alleged in the notice under reply.

 

10.          If there is any technical problem in the software for segregating the leave encashment for Government service and leave encashment for BSNL period, I am willing to resubmit my return for AY omitting

the leave encashment for Government service from income.

 

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11.          I herewith attach my request letter to CPC, Bengaluru and the reply mail sent by them.

 

12.          In view of the foregoing facts and circumstances and the submissions made by me, I request that the Section 154 notice under question may kindly be withdrawn and no action adverse to my interests be taken without giving a personal hearing.

 

 

Thanking you,

 

 

 

 

 

ENCL:

(1)  Copy of ITAT decision in Babulal Patel vs. ITO.

Yours faithfully,

 

(NAME)

Mobile: ……………….

(2)  Copy of BSNL corporate office order dated 4/5/2012

(3)  Copy of sanction memo of leave encashment.

(4)  Form-16 of relevant A.Y. granted by BSNL

(5)  Copy of notice received by me under secn 154 from CPC, Bengaluru

(6)  Copy of my representation to CPC, Bengaluru

(7)  Copy of reply mail received by me from CPC, Bengaluru