Madras High Court
The Commissioner Of Income Tax vs G.V.Venugopal. The Correctness Of The ... on 4 July, 2008
Author: K.Raviraja Pandian
Bench: K.Raviraja Pandian
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 04.07.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) Nos.892 to 895 of 2008 The Commissioner of Income Tax, Thiruchirappalli-I Appellant in all appeals v. S.Chandrasekharan Respondent in T.C.(A) No.892 of 2008 S.Annaji Rao Respondent in T.C.(A) No.893 of 2008 G.N.Balakrishnan Respondent in T.C.(A) No.894 of 2008 R.Chandrasekharan Respondent in T.C.(A) No.895 of 2008 Tax Case Appeals in T.C.(A) Nos.892 to 895 of 2008 are filed under section 260A of the Income Tax Act against the order dated 16.12.2005 in ITA Nos.835, 834, 841 and 837/Mds/2004 respectively on the file of the Income Tax Appellate Tribunal, Madras 'C' Bench for the assessment year 2001-02. For Appellants : Mr.T.Ravikumar, Standing Counsel for IT Department For Respondents : No Appearance JUDGMENT
(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) The Tax Case Appeals are filed against the common order dated 16.12.2005 in ITA Nos.835, 834, 841 and 837/Mds/2004 respectively on the file of the Income Tax Appellate Tribunal, Madras 'C' Bench by raising the following common substantial question of law:
"Whether the amount paid to employees under the Voluntary Retirement Scheme is entitled for deduction?"
2. As the relief sought for is one and the same, except the assessees in each of the appeals, these appeals are taken together and are disposed of by this common order. Tax case (Appeal) No.892 of 2008 is taken as a typical case, the facts of which are as follows:
The assessee was an employee of the Bank of India. During the previous year relevant to the assessment year 2001-2002 the assessee retired from service under the Voluntary Retirement Scheme offered by the said Bank. On retirement, the assessee received several dues including ex-gratia from the employer Bank. The ex-gratia had been worked out by the employer at 60 days salary for each completed year of service, or salary for the number of months of service left whichever was less. Out of the ex-gratia received, the assessee claimed exemption of Rs.5,00,000/- under section 10(10C) of the Act. Balance ex-gratia was admitted as income. However, while working out the tax payable on such income, the assessee claimed relief under Section 89(1). The assessing officer rejected the claim of the assesssee for the relief under Section 89(1) of the Act and passed the Assessment Order granting exemption under Section 10(10C) of the Act. Aggrieved by the same, an appeal is preferred by the assessee before the Commissioner of Income-tax (Appeals), who allowed the appeal. Aggrieved by the same, the revenue preferred appeal before the Income-tax Appellate tribunal, which dismissed the appeal preferred by the revenue following the decision reported in 273 ITR 307 in the case of CIT Vs. G.V.Venugopal. The correctness of the said order is canvassed by the appellant in this present appeal.
3. Learned counsel appearing for the revenue submits that the issue involved in these appeal is covered by a decision of this Court in the case of COMMISSIONER OF INCOME-TAX V.S G.V.VENUGOPAL reported in (2005) 273 ITR 307.
4. This Court in the case of COMMISSIONER OF INCOME-TAX V.S G.V.VENUGOPAL reported in (2005) 273 ITR 307 while dismissing the appeal, held as follows:
"....the second proviso to section 10(10C) only refers to exemption claimed in any other year. Every assessment year is a self-contained unit and the mere fact that the relief under section 89 had been spread over several years, did not mean that the relief was not in respect of a particular assessment year. There was no prohibition to the twin benefits in respect of the amount received under the voluntary retirement scheme. The relief contemplated under section 89(1) is aimed to mitigate hardship that may be caused on account of the high incidence of tax due to progressive increase in tax rates. Payment under the voluntary retirement scheme is covered by the word "salary" which has been given a very wide definition in section 17. Since the assessee was covered by section 89, he would get both the benefits..."
5. Therefore, following the above said judgment, these appeals are dismissed as the question of law now raised is already decided against the revenue.
USK