Calcutta High Court
Sanat Kumar Ghosh vs Asst. Comm. Of Income Tax on 31 March, 2016
Author: Debangsu Basak
Bench: Debangsu Basak
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
WP No. 2197 of 2005
SANAT KUMAR GHOSH
Versus
ASST. COMM. OF INCOME TAX, CIRCLE 22 KOL
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
Date : 31st March, 2016.
Mr. Abhratosh Majumder, Govt. Pleader,
Mr. Amar Nath Sen, Adv.
Ms. Nilanjana Banerjee Pal, Adv.
...for the petitioner
Ms. Asha G. Gutgutia, Adv.
...for the respondent
The Court : The petitioner has assailed invocation of Section 148 of the Income Tax Act, 1961 by the assessing officer in support of his income-tax assessment.
Learned Government Pleader appearing for the petitioner submitted that, the petitioner had opted for early retirement under a voluntary retirement scheme floated by the respondent no. 3. The petitioner is consequently entitled to exemption under Section 10(10C) of 2 the Income Tax Act, 1961 read with Rule 2BA of the Income Tax Rules, 1962. In support of such contention learned Government Pleader had relied upon the scheme floated by the respondent no.3. He has also referred to the provisions of Rule 2BA of the Income Tax Rules, 1962 as also Section 10(10C) of the Income Tax Act, 1961. He has referred to a decision rendered in (2010) 322 ITR 297 (Cal.) [Sunil Kumar Ganguly & Others-Versus-Income Tax Officer and Others]. He has submitted that, the Income Tax Appellate Authority in another matter has held that, a person opting for a voluntary retirement its entitled to the benefits under Section 10(10C) of the Income Tax Act, 1961.
Learned Government Pleader appearing for the petitioner has not pressed challenge to the vires of Clause (vi) of Rule 2BA of the Income Tax Rules 1962.
On behalf of the Department it has been submitted that the petitioner has an alternative statutory remedy available. The order impugned is appellable under the provisions of the Income Tax Act, 1961. The petitioner should asked to avail of the alternative remedy.
I have considered the rival contentions of the parties and the materials made available on record.
The respondent no.3 had floated a voluntary retirement scheme under the name and style of Early Separation Plan (ESP) on 3 October 15, 2001. The petitioner satisfying the eligibility criteria laid down in the ESP had made an application on October 15, 2001 in the prescribed manner to the employer. His application was accepted. He was allowed to retire prematurely with effect from November 30, 2001. He was paid his retirement benefits. He had submitted his income tax return for the relevant year and had claimed refund on the basis of Section 10(10C) of the Income Tax Act, 1961. The Assessing Officer had passed an order determining the amount refundable and had, in fact, issued a cheque for the refunded amount. Subsequent thereto, the Income Tax officer, however, has issued the impugned notice under Section 148 of the Income Tax Act, 1961 proposing to re-assess the income which had allegedly escaped assessment.
The issue is whether the petitioner is entitled to the benefits of Section 10(10C) of the Income Tax read with Rule 2BA of the Income Tax Rules, 1962. In Sunil Kumar Ganguly and Others (supra) it has been held that to attract Section 10(10C) the pre-requisites of Rule 2BA have to be complied with.
Applying such ratio to the facts of the case I find that the provisions of Rule 2BA have been complied with. The EPS launched by the respondent no.3 is a voluntary retirement scheme. It takes into its fold persons who are covered under Rule 2BA of the Income Tax Rules 1961. 4 The petitioner is one of such person. Therefore, the petitioner is entitled to the benefits under Section 10(10C) of the Income Tax Act, 1961.
The Appellate Tribunal in ITA No. 798 of 2006 after considering various authorities of the Calcutta High Court as well as the Madras High Court has opined that an assessee is entitled to Section 10(10C) if the scheme for voluntary retirement framed by the employer of the assessees substantially satisfy the provisions of Rule 2BA.
No submission has been made on behalf of the Department that the scheme propounded by the respondent no.3 does not satisfy the provisions of Rule 2BA.
The maintainability of the writ petition has been questioned at the late stage when the petition has been taken up for final hearing. The petition is of 2005. Directions for affidavits were given by an order dated December 14, 2005. An interim order was also passed on such date restraining the authorities from initiating any recovery proceeding for the assessment year 2002-2003 without obtaining specific leave of this Court. At this belated stage it would not be prudent to ask the petitioner to avail of the alternative statutory remedy. Existence of an alternative remedy is not an absolute bar to the maintainability of a writ petition. Notwithstanding the existence of an alternative remedy a writ petition is maintainable if it is established that there has been a breach of a 5 fundamental right or that the authority has acted without jurisdiction or that the acts complained of are arbitrary or capricious.
In such circumstances, WP No. 2196 of 2005 is allowed. The notice dated July 29, 2005 issued under Section 148 of the Income Tax Act, 1961 is set aside. The petitioner is entitled to exemption under Section 10(10C) of the Income Tax Act 1961 for the benefits he had obtained under the Early Separation Plan of the respondent no.3. No order as to costs.
(DEBANGSU BASAK, J.) TR/snn.