Document Fragment View
Fragment Information
Showing contexts for: "section 10 (10c)" in Anant Kumar Agarwal vs Income Tax Officer on 12 December, 2007Matching Fragments
B.R. Mittal, J.M.
1. The assessee has filed this appeal for asst. yr. 2004-05 against the order of the CIT(A) dt. 17th Feb., 2006.
2. The only issue involved in this appeal is as to whether on the facts and in the circumstances of the case, the assessee is entitled for exemption under Section 10(10C) of the Act amounting to Rs. 5 lakhs out of sum of Rs. 13,52,784 received by the assessee on voluntary retirement from the services of RBI.
3. The relevant facts are that assessee is an employee of RBI. The RBI announced VRS known as Optional Employees Retirement Scheme (hereinafter to be referred in short as OERS). During the year, the assessee opted for OERS. The assessee received a sum of Rs. 13,52,784 from RBI under the said OERS. The assessee filed return of income claiming exemption of Rs. 5 lakhs as per provisions of Section 10(10C) of the Act. The AO did not accept the said claim of the assessee on the ground that RBI itself vide its letter dt. 31st Aug., 2005, a copy of which is placed at pp. 11 to 13 of the paper book, confirmed that the said scheme of early retirement did not fulfil guidelines laid down in Rule 2BA of the IT Rules and as such amount of ex gratia paid under the scheme, i.e., OERS was subject to deduction of tax. It is relevant to state that exemption under Section 10(10C) of the Act of Rs. 5 lakhs is available only if the scheme is covered under Section 10(10C) of the Act r/w Rule 2BA of the IT Rules.. In view of the above fact that OERS of RBI under which assessee opted voluntary retirement did not fulfil the requirements of provisions of Section 10(10C) of the Act r/w Rule 2BA of the IT Rules, 1962, the AO did not allow exemption of Rs. 5 lakhs to the assessee and added the same to his income under Section 17(3) of the Act. The assessee filed appeal before the first appellate authority.
6. On the other hand, the learned Departmental Representative supported the orders of the authorities below. He submitted that RBI has itself confirmed to the AO vide its letter dt. 31st Aug., 2005 in reply to a letter written by the AO that its scheme of early retirement did not fulfil guidelines laid down in Rule 2BA of IT Rules and as such amount of payment made under the scheme was subject to deduction of tax. The learned Departmental Representative submitted that Section 10(10C) of the Act specifically provides that exemption will be available to an employee not exceeding Rs. 5 lakhs only if the scheme is in accordance with such guidelines as may be prescribed. He submitted that Rule 2BA of the IT Rules provides guidelines for the purpose of Section 10(10C) of the Act. Me submitted that the said guidelines are statutory in nature and they are binding while allowing exemption under Section 10(10C) of the Act. The learned Departmental Representative further submitted that cases relied upon by the learned Authorised Representative of the assessee (cited supra) are not applicable to the facts of the case as in those cases there was issue regarding interpretation of taxing provision and in that context it was held by the apex Court/Hon'ble Kerala High Court that provision inserted for promoting economic growth granting incentives has to be interpreted liberally so as to advance objective of the provision and not to frustrate it. The learned Departmental Representative submitted that there is no ambiguity in the guidelines as provided under Rule 2BA of IT Rules for allowing exemption under Section 10(10C) of the Act, the question of ambiguity does not arise and hence the said cases as cited by the learned Authorised Representative of the assessee are not relevant.
7. We have carefully considered the submissions of the learned Departmental Representatives of the parties and the orders of the authorities below. We have also considered relevant provisions of the IT Act, 1961 specially Section 10(10C) of the Act and Rule 2BA of the IT Rules and have also perused cases cited by the learned Authorised Representative of the assessee. At the outset, we agree with the learned Departmental Representative that cases cited by the learned Authorised Representative of the assessee (supra) are not relevant to the facts of the case before us. There is no dispute to the fact that there is no ambiguity in the provisions of Section 10(10C) of the Act as well as in Rule 2BA of IT Rules. There is no dispute that if there is no ambiguity, it is a cardinal principle of interpretation of a statute that words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. Since provisions of Section 10(10C) of the Act r/w Rule 2BA of IT Rules specifically provide that exemption under Section 10(10C) of the Act is available of an amount not exceeding Rs. 5 lakhs received under a VRS provided said scheme is in accordance with the guidelines as may be prescribed. The said guidelines are prescribed under Rule 2BA of IT Rules. Since there is no ambiguity in reading the provision of Section 10(10C) of the Act and also Rule 2BA of IT Rules, we hold that we have to construe said provision in its intend and purposes. The apex Court has held in the case of R.B. Jodha Mal Kuthiala v. CIT that equitable constructions are irrelevant in interpreting lax laws. They are to be interpreted reasonably and in consonance with justice. One has to look fairly at the language used. Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) 1 KB 64 at p. 71 stated about rule of construction of a taxing statute as under:
7. Similar view is taken by Tribunal Kolkata, Chennai, Bangalore, Nagpur, Chennai and Luck now Benches in the cases referred to above. No contrary decision is brought on record by the learned Departmental Representative. When in the cases of various other employees of RBI, who took voluntary retirement under the same scheme, various Benches of Tribunal have taken a consistent view that employees have fulfilled requirement of Section 10(10C) of the Act f/w Rule 2BA of the IT Rules, I do not find any justifiable reason to take a different view. In the case under consideration before me also, the learned AM has pointed out that merely because RBI has deducted TDS On the payment made to the assessee on the basis of some opinion expressed by M/s Choksi & Co., chartered accountants, it cannot be conclusive to adjudicate whether OERS fulfils the conditions laid down under Section 10(10C) of the Act r/w Rule 2BA of the IT Rules. I have already noted earlier that several other Benches of the Tribunal (i.e., Mumbai, Kolkata. Bangalore, Nagpur and Luck now) have taken the view that the scheme fulfils the conditions laid down in Section 10(10C) r/w Rule 2BA. No contrary decision is brought to my knowledge. In view of the above, I agree with the learned AM and hold that the assessee is entitled for exemption under Section 10(10C) of the Act amounting to Rs. 5 lakhs out of sum of Rs. 13,52,784 received by him on voluntary retirement from RBI.