COMMISSIONER OF INCOME TAX, CHANDIGARH-II V. ANAND KUMAR JAIN

ITA/270/2009

AI Insights

The case revolves around the dispute concerning the eligibility of the 'Optional Early Retirement Scheme' (Voluntary Retirement Scheme) offered by the Reserve Bank of India for exemption under Section 10(10C) of the Income Tax Act, 1961. The respondent, Sh. Anand Kumar Jain, an employee who opted for the scheme, claimed an exemption on the amount received up to Rs. 5 lacs under the said section. The Assessing Officer initially denied this exemption, but the Income Tax Appellate Tribunal reversed this decision, citing a similar case decided by the Mumbai Bench of ITAT. The revenue appealed against this decision, leading to the present judgment, which affirmed the Tribunal's decision based on precedents and the specific provisions of the Income Tax Act.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 734608 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 18-04-2011
• Assessment Year: misc
• Other Referred Cases: Vaishali A. Sehlar etc. v. ACIT etc., Commissioner of Income-Tax v. Nagesh Devidas Kulkarni
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: URVASHI DHUGGA
• Keywords: Exemption; Income Tax; Income tax appellate tribunal; Reserve Bank of India; Voluntary Retirement Scheme; Optional Early Retirement Scheme
• Section: 260A; 10(10C); 89(1)

Judgement Text

"ITA No. 270 of 2009 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 270 of 2009 Date of Decision: 18.4.2011 Commissioner of Income Tax ....Appellant. Versus Sh. Anand Kumar Jain ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Senior Standing Counsel, for the appellant. ADARSH KUMAR GOEL, J. 1. This order will dispose of ITA Nos. 125 of 2008 and 270 of 2009 as the question involved in both the appeals is common. 2. ITA No. 270 of 2009 has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against order dated 5.7.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench “B” (hereinafter referred to as “the Tribunal”) in ITA No. 244/CHD/2007 for the assessment year 2004-05, claiming following substantial question of law:- “Whether on the facts and in the circumstances of the case and in law, the order of the ITAT is perverse as the ITAT has failed to appreciate the fact that the “Optional Early Retirement Scheme” floated by the ITA No. 270 of 2009 -2- employer was not eligible for exemption u/s 10(10C) of the I.T. Act, 1961?” 3. The respondent-assessee was an employee of Reserve Bank of India and opted for Voluntary Retirement Scheme during the year relevant to the assessment year 2004-05. The scheme was circulated by the Reserve Bank of India vide Circular No. 1 dated 11.8.2003. The assessee claimed exemption under Section 10(10C) of the Act in respect of the amount received to the extent of Rs.5 lacs. Subsequently, the assessee also claimed relief under Section 89(1) of the Act on the balance portion. He claimed that Rule 2BA of the Income Tax Rules (in short “the Rules”) was applicable. The Assessing Officer allowed relief under Section 89(1) of the Act but did not allow exemption under Section 10(10C). On appeal, the CIT (A) upheld the order of the Assessing Officer but on further appeal the plea of the assessee for exemption under Section 10(10C) was accepted by the Tribunal relying upon the order of Mumbai Bench of ITAT in Vaishali A. Sehlar etc. v. ACIT etc. (ITA No. 6384/M/06 to 5581/M/2006 dated 28th March, 2007). 4. We have heard learned counsel for the appellant. 5. Learned counsel for the appellant submits that the scheme was not in accordance with the requirements of Rule 2BA of the Rules and, therefore, exemption under Section 10(10C) was not applicable. 6. We are unable to accept the submission. 7. The matter with reference to the same scheme was examined by the Bombay High Court in Commissioner of Income-Tax v. NageshDevidas Kulkarni [2007] 291 ITR 407 (Bom) and decided against the revenue. ITA No. 270 of 2009 -3- 8. In the present case, relief under Section 89(1) has been allowed by the Assessing Officer. Only question is about applicability of Section 10(10C) of the Act. A perusal of Section 10(10C) clearly shows that the amount received by the employees of Public Sector Company or statutory authority is covered by exemption upto Rs.5 lacs. The very same scheme having been held to be covered by Section 10 (10C) of the Act by the Bombay High Court in Nagesh Devidas Kulkarni's case (supra) and no contrary view having been shown, we do not find any reason to take a different view. Accordingly, the question has to be answered against the revenue and in favour of the assessee. 9. Both the appeals are dismissed. 10. A photo copy of this order be placed on the file of the connected case. (ADARSH KUMAR GOEL) JUDGE April 18, 2011 (AJAY KUMAR MITTAL) gbs JUDGE "