Shewale Gajanan Krishna, Satara V. Income-tax Officer,

ITA 1081/PUN/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6788 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 21-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Keywords: Additional evidence; Benefit of exemption
• Section: 27; 6; 28; 10; 2; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1074 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI PATIL KAKA BAPU, DHONDEWADI, TAL. - KA RAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ADIPP2318M ITA NO. 1075 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI PATIL BAPU PARSU, JAKHINWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WAR D - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ACJPP7526P ITA NO. 1076 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI PATIL PANDURANG KHANDERAO, PALUS, TAL. - PALUS, DISTT. - SANGLI VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PA N NO. ADIPP2325A ITA NO. 1077 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI SADAMATE CHANDAR SHANKAR, AGASHIVNAGAR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AGUPS2866C 2 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ITA NO. 1078 /P N/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI KULKARNI GOVIND VASUDEV, JAKHINWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3 , SATARA (APPELLANT) (RESPONDENT) PAN NO. ABDPK3655P ITA NO. 1079 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI KAKADE RAGHUNATH RAMCHANDRA, DHONDEWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPONDENT) PAN NO. AEAPK0102M ITA NO. 1080 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI JOSHI VASANT VISHNU, AGASHIVNAGAR, T AL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPONDENT) PAN NO. ABXPJ7075L ITA NO. 1081 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI SHEWALE GAJANAN KRISHNA, AGASHIVNAGAR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TA X OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ECQPS6968K ITA NO. 1082 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI SURYAWANSHI RAGHUNATH TATOBA, KAVE - NAKA, KARAD, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (A PPELLANT) (RESPONDENT) PAN NO. AEPPS6210K 3 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ITA NO. 1083 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI NALAWADE VASANT KHASHABA, JAKHINWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AQAPN77 05M ITA NO. 1084 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI SHEDAGE SHAMRAO MAHADEV, DHONDEWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ECHPS9919D ITA NO. 1085 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI SAWANT TANAJI ATMARAM, L/H VIKAS TANAJI SAWANT, AGASHIVNAGAR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AFCPS2222P ITA NO. 1086 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI NALAWADE UTTAM SHANKAR, JAKHINWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AASPN7900Q ITA NO. 1087 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI KAKADE RAGHUNATH DAJI, DHONDEWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPONDENT) PAN NO. ACRPK9394L 4 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ITA NO. 1088 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI KHARAT NIVRUTTI ISHWARA, KHARATWADI, TAL. - WALVA , DISTT. - SA NGLI VS. INCOME TAX OF FICER, WARD - 3 , SATARA (APPELLANT) (RESPONDENT) PAN NO. CMOPK9359J ITA NO. 1089 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI GIJARE SUBHASH HARI, SOMWAR PETH, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPOND ENT) PAN NO. ABAPG7019C ITA NO. 1090 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI DABADE SHAMRAO MAHADEV, YERAWALE, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPONDENT) PAN NO. AATPD4072C ITA NO. 1091 /PN /20 14 ASSESSMENT YEAR : 2001 - 02 SHRI KAKADE KAKA MARUTI, L/H KAKADE SAVITRIBAI KAKA, DHONDEWADI, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPONDENT) PAN NO. ACRPK9462D ITA NO. 1092 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 LATE SURVE SUKHADEV VITTHAL, L/H SURVE ANANDIBAI SUKHADEV CHACHEGAON, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4 , SATARA (APPELLANT) (RESPONDENT) PAN NO. AFAPS6323K 5 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ITA NO. 1093 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI SHINDE VASANTRAO RAMCHANDRA, MALKAPUR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AGUPS2864A ITA NO. 1094 /PN/20 14 ASSESSMENT YEAR : 2001 - 02 SHRI WAGHMARE SAMBHAJI SHANKAR, AGASHI VNAGAR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ABDPV3058M ITA NO. 1095/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI CHANDRAKANT B. PHUTANE, L/H MILIND C. PHUTANE, RAVIWAR PETH, TAL. - KARAD , DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ABCPP7231R ITA NO. 1096/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI YEWALE JALINDAR YASHWANT, AGASHIVNAGAR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICE R, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AAEPY5912B ITA NO. 1097/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI KORBU KAMIL BAPULAL, AGASHIVNAGAR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPONDENT ) PAN NO. ACRPK9625J 6 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ITA NO. 1132/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI GARUD SHARAD HARIBHAU, 441, SOMWAR PETH, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ABUPG0269N ITA NO. 1133 /PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI KRISHNA JAGANNATH SHETE, A/P CHACHEGAON, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. BIMPS8738N ITA NO. 1134/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI JOSHI SHRIDHAR BALKRISHNA, L/H OF LATE JOSHI BALKRISHNA SADASHIV, GANESH COLONY, MALKAPUR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ABDPJ7557K ITA NO. 1135/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI GARUD KISAN RATU, ANURATNA, SHAS H TRI NAGAR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ACNPG5478K ITA NO. 1136/PN/2014 ASSESSMENT YEAR : 2001 - 02 RATNAMALA RAMCHANDRA SURYAWANSHI, L/H OF LATE SHRI SURYAWANSHI R. JOTI, SHASHTRI NAGAR, NEAR REMAND HOME, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AFCPS2228H 7 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ITA NO. 1137/PN/2014 ASSESSMENT YEAR : 2001 - 02 SH RI SULE SHAMRAO SADHU, A/P SAWANTPUR, TAL. - PALUS, DISTT. - SANGLI VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. DCOPS9995D ITA NO. 1138/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI APHALE MUKUND GANESH, 89, BANWADI COLONY, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. AASPA9765E ITA NO. 1139/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI KULKARNI CHANDRAKANT M RAMA PLOT NO. 20, KIRLOSKAR COLONY, MALKAPUR, TAL. - KAR AD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 4, SATARA (APPELLANT) (RESPONDENT) PAN NO. ABJPK8788M ITA NO. 1299/PN/2014 ASSESSMENT YEAR : 2001 - 02 SHRI KRISHNA VAMAN KARMARKAR, MALKAPUR, TAL. - KARAD, DISTT. - SATARA VS. INCOME TAX OFFICER, WARD - 3, SATARA (APPELLANT) (RESPONDENT) PAN NO. AAACK7291C APPELLANT BY: SHRI M.K. KULKARNI RESPONDENT BY: SMT. S. PRAVEENA DATE OF HEARING : 18 - 07 - 2014 DATE OF PRONOUNCEMENT : 25 - 0 7 - 2014 8 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ORDER PER R.S . PADVEKAR , JM : - THIS BAT CH OF THIRTY THREE APPEALS ARE FILED BY THE DIFFERENT ASSESSEES , WHO ARE EX - EMPLOYEES OF KIRLOSKAR COPELAND LTD., KARAD - DHEBAWADI ROAD, KARAD, DISTT. - SATARA , CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT(A) - III, PUNE FOR THE A.Y. 2001 - 02. THE FACTS IN ALL THESE CASES AS WELL AS THE ISSUES ARE IDENTICAL HENCE, WE DISPOSED OFF ALL THESE APPEALS BY THIS CONSOLIDATED ORDERS FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE S HAVE TAKEN THE MULTIPLE GROUNDS IN ALL THESE APPEALS BUT T HE SOLITARY ISSUE W HICH ARISES FOR OUR CONSIDERATION IS WHETHER ALL THESE ASSESSEES ARE ENTITLED FOR CLAIM OF EXEMPTION U/S. 10(10C) OF THE INCOME - TAX ACT ON THE COMPENSATION /MONETARY BENEFITS RECEIVED BY THEM FOR OPTING TO RETIRE FROM SERVICE UNDER V OLUNTAR Y R ETIREMENT SCHE ME (VRS) , 2000 FRAMED BY THEIR COMPANY I.E. KIRLOSKAR COPELAND LTD. ALL THESE ASSESSEES WERE WORKING WITH THE KIRLOSKAR COPELAND LTD., KARAD - DHEBAWADI ROAD, KARAD, DISTT. - SATARA. THE KIRLOSKAR COPELAND LTD. FORMULATED AND DECLARED VOLUNTARY RETIREMENT SCH EME (VRS) OFFERING THE DIFFERENT MONETARY BENEFITS TO THE EMPLOYEES/WORK ERS WORKING IN THE SAID COMPANY AND WHO WERE PERMANENT EMPLOYEES. ALL THESE EMPLOYEES OPTED FOR THE VOLUNTARY RETIREMENT UNDER THE VRS - 2000 DECLARED BY THE COMPANY AND THEY WERE COMP ENSATED IN TERMS OF THE MONEY AS PER THE SCHEME FORMULATED BY THEIR COMPANY. ALL THESE ASSESSEES CLAIMED THE EXEMPTION OF RS.5,00,000/ - U/S. 10(10C) OF THE ACT TOWARDS THE RETIREMENT BENEFITS PAID TO THEM UNDER THE VRS BY THEIR COMPANY. 3. IN THE FIRST R OUND OF APPEAL BEFORE THE TRIBUNAL THOUGH THE APPEALS FILED BY THESE ASSESSEES WERE DISMISSED BUT SUBSEQUENTLY THE TRIBUNAL RECALLED THE ORDER ON THE APPLICATIONS MADE BY THESE ASSESSEES U/S. 254(2) OF THE INCOME - TAX ACT AS AT THE TIME THE ORDER PASSED BY THE 9 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA TRIBUNAL , THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KOODATHIL KALLYATAN AMBUJAKSHAN (2008) 219 CTR (BOM) 80 WAS NOT AVAILABLE. THE TRIBUNAL RESTORE D THE MATER BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECT ION TO THE ASSESSING OFFICER TO EXAMINE THE VOLUNTARY RETIREMENT SCHEME OF THE COMPANY AND VERIFY WHETHER ALL THE CONDITIONS WERE SATISFIED OF RULE 2BA OF THE INCOME TAX RULES, 1962. THE MATTER WAS AGAIN RECONSIDERED BY THE ASSESSING OFFICER. BEFORE THE ASSESSING OFFICER THE ASSESSEE S PLACED THEIR HEAVY RELIANCE ON THE DECISION IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN (SUPRA). IT WAS PLEADED THAT BY THE ASSESSEES BEFORE THE ASSESSING OFFICER THAT ALL THE CONDITIONS MENTIONED IN RULE 2BA ARE FULFILL ED. MOREOVER, THEIR EMPLOYER KIRLOSKAR COPELAND LTD. IS ALSO CLOSED DOWN AND HENCE, THERE WAS NO NEW RECRUITMENT OF TH E EMPLOYEES A GAIN ST THE VACANCIES IN EMPLOYER COMPANY OR ANY OTHER COMPANY UNDER THE MANAGEMENT OF THEIR EMPLOYER COMPANY . THE ASSESSEE PLEADED FOR GIVING THE BASIC EXEMPTION OF RS.5,00,000/ - U/S. 10(10C) OF THE ACT. THE ASSESSING OFFICER HAS REPRODUCED THE VRS SCHEME FORMULATED BY KIRLOSKAR COPELAND LTD. OFFERING THE EMPLOYEES WORKING THERE IN ITS COMPANY THE MONETARY BENEFITS IF THEY OP TED FOR THE VOLUNTARY RETIREMENT. THE SAID SCHEME WAS DECLARED IN THE MONTH OF AUGUST, 200 0 . AS PER THE SCHEME FRAMED BY THE KIRLOSKAR COPELAND LTD. THE SCHEME WAS INTRODUCED FOR THE SURVIVAL ECONOMIC VIABILITY AND COST CONTROL OF THE SAID COMPANY. THE VRS SCHEME WAS APPLICABLE TO ALL THE PERMANENT EMPLOYEES OF THE COMPANY WORKING ON THE POST OF OPERATOR, CLERK, INSPECTOR, JR. TECHNICIAN AND DRAUGHTSMAN IN THE FACTORY SITUATED AT KARAD - DHEBEWADI ROAD, KARAD, DISTT. - SATARA. FOR AVAILING THE BENEFITS UNDE R SCHEME THE ELIGIBILITY CRITERIA WAS THAT THE EMPLOYEES SHOULD HAVE COMPLETED 40 YEARS OR MORE YEARS OF HIS AGE AND 12 YEARS CONTINUOUS SERVICE IN THE COMPANY ON THE DATE OF APPLYING FOR THE VRS. THEY WERE ALSO OFFERED THE MONETARY BENEFITS. THE ASSESSI NG OFFICER REJECTED THE PLEA OF THE ASSESSEES FOR GIVING THE BENEFITS OF EXEMPTION OF 10 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA RS.5,00,000/ - U/S. 10(10C) OF THE ACT TOWARDS THE MONETARY BENEFITS RECEIVED ON OPTING FOR THE VRS. THE ASSESSING OFFICER HAS ALSO NOTED THAT THE EMPLOYER COMPANY I.E. K IRLOSKAR COPELAND LTD. HAS ADMITTED THAT THE VRS SCHEME WAS NOT APPROVED BY THE COMMISSIONER OF INCOME TAX. THE ASSESSING OFFICER MADE THE ADDITIONS OF RS.5,00,000/ - IN EACH CASE. 4. ALL THESE A S SESSEES CARRIED THE ISSUE BEFORE THE LD. CIT(A) BUT WITH OUT SUCCESSES A S THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE CONFIRMED. THE FACTS ARE ELABORATELY GIVEN BY THE LD. CIT(A). IN PARA NO. 4.1 THE LD. CIT(A) HAS NARRATED THE CASE OF THE ASSESSING OFFICER FOR NOT GIVING THE BENEFITS OF SEC. 10(10C) OF T HE ACT TO THESE ASSESSEES. THE LD. CIT(A) HAS GIVEN THE FOLLOWING REASONS FOR CONFIRMING STAND TAKEN BY THE ASSESSING OFFICER : 6.5 THE ABOVE CLAUSE IN THE SCHEME CLEARLY SHOWS THAT THE VOLUNTARY RETIREMENT SCHEME, 2000 ISSUED BY THE KIRLOSKAR COPELAND L TD. WAS NOT DRAWN TO RESULT IN OVERALL REDUCTION IN THE EXISTING STRENGTH OF THE EMPLOYEES I.E. NOT AT RIGHTSIZING OR DOWNSIZING AND THE EMPLOYER DID NOT EXTEND THE SCHEME TO EXECUTIVES OR ENGINEERS OR MANAGERS, WORKING IN THE SAID COMPANY. THUS, CLAUSE (I I) OF THE GUIDELINES PRESCRIBED IN RULE 2BA IS NOT SATISFIED IN THE CASE OF THE SAID SCHEME. IT IS PRECISELY FOR THIS REASON THAT THE COMPANY ITSELF HAS CLARIFIED IN THE SCHEME ITSELF THAT THE SCHEME DOES NOT COMPLY WITH RULE 10(10C) AND TAX WAS DEDUCTED A T SOURCE ON THE EX - GRATIA AMOUNT PAID TO THE EMPLOYEES WHO EXERCISED THE EXIT OPTION. THE RELEVANT PARAGRAPHS OF THE SCHEME READS AS UNDER; - 'TAX APPLICABILITY UNDER INCOME TAX ACT. 1961 THE COMPUTATION OF INCOME AS PER INCOME TAX ACT WILL BE MADE BY THE ACCOUNTS DEPARTMENT CONSIDERING ALL EARNINGS FROM THE COMPANY TILL THE DATE OF SEPARATION AND THE AMOUNT PAID FOR VOLUNTARY RETIREMENT. THE TAX APPLICABLE IN CASE OF EACH INDIVIDUAL WORKMAN WILL BE DEDUCTED FROM THE PAYMENT TO BE MADE TO HIM AT THE TIME O F SEPARATION.' 11 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA 6.6 THE SCHEME IS ALSO SILENT ABOUT THE ASPECT OF INTENTION TO REDUCE THE OVERALL EXISTING STRENGTH OF THE EMPLOYEES AND TO CEASE TO FILL UP THE VACANCIES ARISING THEREFROM. AT THE TIME WHEN THE SECTION 10(10C) WAS INTRODUCED BY THE FINANCE ACT, 1987 WITH EFFECT FROM 01.04.1987, IT WAS INTENDED TO EXTEND RELIEF TO EMPLOYEES OF PUBLIC SECTOR COMPANIES SO AS TO EXEMPT ANY PAYMENT RECEIVED FROM SUCH PSUS AT THE TIME OF THEIR VOLUNTARY RETIREMENT AND WAS AIMED AT RIGHTSIZING THE EMPLOYEE STRENGTH OF PSUS WHICH WERE AN IMPORTANT PILLAR OF OUR ECONOMY. THE FINANCE ACT, 1992 EXTENDED THE BENEFIT OF THIS SECTION TO AMOUNTS RECEIVED BY EMPLOYEES OF PRIVATE SECTOR COMPANIES, AUTHORITIES ESTABLISHED UNDER A CENTRAL, STATE OR PROVINCIAL ACT OR A LOCAL AUT HORITY WITH EFFECT FROM 01.04.1993. AT THE SAME TIME RULE 2BA WAS NOTIFIED AND INSERTED INTO INCOME TAX RULES 1962 ON 18.08.1992. TO PROVIDE THAT THE SCHEME OF VOLUNTARY RETIREMENT FRAMED BY A COMPANY SHOULD BE IN ACCORDANCE WITH CERTAIN REQUIREMENTS, CBDT CIRCULAR NO. 636 DATED 31.08.1992 EXPLAINED THE SCOPE AND EFFECT OF THE NEWLY SUBSTITUTED SECTION 10(10C) BY THE FINANCE ACT, 1992 IN THE FOLLOWING WORDS: 'MODIFICATION OF THE PROVISIONS RELATING TO EXEMPTION IN RESPECT OF PAYMENT S UNDER VOLUNTARY RETIR EMENT SCHEMES - SECTION 10(10C) OF THE IT ACT, AS IT EXISTED PRIOR TO 1 ST JUNE 1992, EXEMPTED FROM THE INCOME TAX ANY PAYMENT RECEIVED BY AN EMPLOYEE OF PUBLIC SECTOR COMPANY AT THE TIME OF HIS VOLUNTARY RETIREMENT IN ACCORDANCE WITH ANY SCHEME WHICH THE C ENTRAL GOVERNMENT MAY, HAVING REGARD TO THE ECONOMIC VIABILITY OF SUCH COMPANY AND OTHER RELEVANT CIRCUMSTANCE, APPROVED IN THIS BEHALF. THIS EXEMPTION IS AVAILABLE TO ANY EMPLOYEE, WHETHER A WORKMAN OR AN EXECUTIVE. WITH A VIEW TO MAKING THEMSELVES ECONOM ICALLY VIABLE, A NUMBER OF COMPANIES IN THE PRIVATE SECTOR HAVE FORMULATED SCHEME FOR PAYMENT OF LUMP SUM COMPENSATION AND SOME OTHER TERMINAL BENEFITS TO THE WORKMEN OF THE EXECUTIVES ON VOLUNTARY RETIREMENT. IT HAD BEEN REPRESENTED THAT THE MONETARY BENE FIT OF THE COMPENSATION RECEIVED GOT DILUTED AS THE COMPENSATION WAS SUBJECTED TO INCOME TAX. THE FINANCE ACT,1992, THEREFORE, AMENDS SECTION 10(1C) OF THE IT ACT TO PROVIDE INCOME TAX EXEMPTION TO ANY AMOUNT RECEIVED BY THE EMPLOYEE OF THE PUBLIC SECTOR COMPANY OR 12 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ANY OTHER COMPANY AT THE TIME OF HIS VOLUNTARY RETIREMENT IN ACCORDANCE WITH ANY SCHEME OR SCHEME OF VOLUNTARY RETIREMENT. THE SCHEME OF THE SAID COMPANIES ARE TO BE IN ACCORDANCE WITH GUIDELINES PRESCRIBED WHICH MAY INCLUDE THE CRITERIA OF ECON OMIC VIABILITY. IN THE CASE OF THE COMPANIES OTHER THAN THE PUBLIC SECTOR COMPANIES, THE SCHEMES ARE TO BE APPROVED BY THE CHIEF COMMISSIONER OR DIRECTOR - GENERAL. THIS AMENDMENT TAKES EFFECT FROM THE 1 ST APRIL, 1993, AND WILL, ACCORDINGLY, APPLY TO ASSESS MENT YEAR 1993 - 94 AND THE SUBSEQUENT ASSESSMENT YEARS.' 6.6.1. HOWEVER, LATER ON THE REQUIREMENT OF TAKING APPROVAL OF THE CHIEF COMMISSIONER OR DIRECTOR GENERAL OF INCOME TAX WAS DISPENSED WITH EFFECT FROM A.Y. 2001 - 02 AND SUBSEQUENT YEARS. THIS INTENTION IS REITERATED IN THE MEMORANDUM EXPLAINING THE PROVISIONS TO FINANCE ACT, 2001, WHICH INTERALIA STATES; TAXPAYER FRIENDLY MEASURES EXEMPTION OF AMOUNT RECEIVED ON VOLUNTARY RETIREMENT UNDER THE EXISTING PROVISIONS OF CLAUSE (10C) OF SECTION 10 OF THE INCO ME - TAX ACT, ANY AMOUNT RECEIVED BY EMPLOYEES OF COMPANIES, AUTHORITIES ETC. AT THE TIME OF THEIR VOLUNTARY RETIREMENT, IN ACCORDANCE WITH ANY SCHEME OR SCHEMES OF VOLUNTARY RETIREMENT, IS EXEMPT FROM INCOME - TAX. THE PROPOSED AMENDMENT SEEKS TO ENLARGE THE SCOPE OF THE EXEMPTION BY EXTENDING IT TO THE EMPLOYEES OF A PUBLIC SECTOR COMPANY ON THE TERMINATION OF THEIR SERVICES UNDER A VOLUNTARY SEPARATION SCHEME FRAMED IN ACCORDANCE WITH THE GUIDELINES ISSUED IN THIS REGARD. UNDER THE EXISTING PROVISIONS, THE F IRST PROVISO OF SECTION 10(10C) STATES THAT THE SCHEME IN RELATION TO COMPANIES (OTHER THAN PUBLIC SECTOR COMPANIES OR CO - OPERATIVE SOCIETIES) IS REQUIRED TO BE APPROVED BY THE CHIEF COMMISSIONER OR THE DIRECTOR GENERAL OF INCOME - TAX. TO SIMPLIFY AND EXPED ITE THE PROCEDURE RELATING TO EXEMPTION OF AMOUNTS RECEIVED UNDER A VOLUNTARY RETIREMENT SCHEME FRAMED AS PER THE GUIDELINES, IT IS PROPOSED TO DISPENSE WITH THE REQUIREMENT OF SUCH APPROVAL. 13 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA THE PROPOSED AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 2001 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2001 - 02 AND SUBSEQUENT YEARS. 6.6.2 THUS IT IS VERY CLEAR THAT THE VOLUNTARY RETIREMENT SCHEME OF A PRIVATE SECTOR COMPANY, NO LONGER REQUIRES TO BE APPROVED UNDER DELEGATED POWERS OF LEGISLATION BY THE CONCERNED CHIEF COMMISSIONER OR DIRECTOR GENERAL OF INCOME TAX. THEREFORE, TO THE EXTENT THAT THE ITO HAS HELD THAT THE SCHEME IS NOT APPROVED BY THE CCIT/DGIT AND IS THEREFORE SHORT OF THE REQUIREMENTS OF SECTION 10(10C), HE IS NOT CORRECT IN LAW. BE THAT AS IT MAY, IN THE PRESENT CASE THE APPELLANT COMPANY HAS DEDUCTED TAX ON THE BENEFITS GIVEN TO ITS EMPLOYEES, INCLUDING THE APPELLANT, AT THE TIME OF THEIR RETIREMENT, THE REASON BEING THAT IT WAS NOT AIMED AT RIGHTSIZING THE COMPANY AT ALL LEVELS . 6.7 THE APPELLANT HAS HOWEVER RELIED UPON THE BOMBAY HIGH COURT DECISION IN KOODATHIL KALLYATAN AMBUJAKSHAN REPORTED IN 309 ITR 113 (IN THAT CASE, THE ASSESSEE WAS AN EX - RBI EMPLOYEE) AND IS OF THE VIEW THAT READ WITH THE DIRECTIONS OF THE PUNE ITAT, THE ISSUE IS FULLY COVERED IN FAVOUR OF THE APPELLANT. IN THE CASE BEFORE THE BOMBAY HIGH COURT WHERE IN THE COURT TOOK THE VIEW THAT MERELY BECAUSE THE SCHEME MAY NOT EXPRESSLY SET OUT THAT THE POST WILL NOT BE FILLED IN, CANNOT RESULT IN THE SCHEME NOT BEIN G A SCHEME U/S 10(10C) READ WITH RULE 2BA. THE BOMBAY HIGH COURT HAS OBSERVED AS UNDER: - '.... IT WILL, THEREFORE, BE CLEAR THAT JUDICIAL NOTICE WAS TAKEN BY THE SUPREME COURT THAT THE VERY OBJECT IN ENACTING THE PROVISIONS WAS TO DOWNSIZE THE EMPLOYEES ST RENGTH SO THAT UNWANTED PERSONNEL COULD SEEK VOLUNTARY RETIREMENT THEREBY ENABLING THE PUBLIC SECTOR TO ACHIEVE THE TRUE OBJECT FOR (WHICH) IT WAS ESTABLISHED. THIS WOULD INDICATE THAT THE PROVISIONS OF SECTION ITSELF CONTEMPLATE A SCHEME WHEREBY THERE HAS TO BE DOWNSIZING ON ACCOUNT OF SURPLUS OR THE LIKE........... THE SECTION, THEREFORE, SPEAKS OF A SCHEME FOR VOLUNTARY RETIREMENT OR TERMINATION OF SERVICE. THE SECTION DOES NOT PROVIDE FOR ANY PREDICATES. NORMALLY, THEREFORE, THE SCHEME OUGHT TO BE READ AS A SCHEME FRAMED BY THE COMPANY OR AUTHORITY SET OUT UNDER SECTION 10(1 OC) OF THE 14 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ACT. RULES, HOWEVER, HAVE BEEN MADE WHICH ARE KNOWN AS GUIDELINES FOR THE PURPOSE OF SECTION 10(10C). THE GUIDELINES ARE NOT UNDER CHALLENGE BEFORE US. WE, THEREFORE, PROC EED ON THE BASIS THAT THESE GUIDELINES ALSO WILL HAVE TO BE FULFILLED. THE RULE, HOWEVER, WILL HAVE TO BE READ BEARING IN MIND THE OBJECT OF SECTION 10(10C) ITSELF. UNDER THE RULES A SCHEME FRAMED MUST BE IN ACCORDANCE WITH THE REQUIREMENTS AS SET OUT THER EIN. THE SCHEME, THEREFORE, MUST EITHER EXPRESSLY OR IMPLIEDLY COMPLY WITH THE REQUIREMENTS. MERELY BECAUSE THE SCHEME MAY NOT EXPRESSLY SET OUT THAT THE POSTS WILL NOT BE FILLED IN CANNOT RESULT IN THE SCHEME NOT BEING A SCHEME FALLING UNDER SECTION 10(10 C) READ WITH RULE 2BA OF THE RULES, BEARING IN MIND THE PROCEDURAL NATURE OF THE RULES. IT WILL HAVE TO BE READ IN HARMONIOUS CONSTRUCTION WITH THE SUBSTANTIVE PROVISIONS OF THE ACT SO AS NOT TO RENDER IT ULTRA VIRES THE PROVISIONS OF THE SUBSTANTIVE PROVI SIONS OF THE ACT. APPLYING THE TESTS WE FIND FIRSTLY THAT IT SATISFIES THE FIRST TEST NAMELY 10 YEARS OF SERVICE AND 40 YEARS OF AGE. IN THE INSTANT CASE IT IS 25 YEARS OF SERVICE AND 50 YEARS OF AGE. SECONDLY IT APPLIES TO ALL EMPLOYEES. THIS MEETS THE S ECOND REQUIREMENT. THE THIRD REQUIREMENT IS THAT THE SCHEME HAS BEEN DRAWN TO RESULT IN OVERALL REDUCTION IN THE EXISTING STRENGTH OF THE EMPLOYEES. THIS HAS NOT BEEN EXPRESSLY STATED IN THE SCHEME. HOWEVER, WE HAVE NOTED THE OBJECT BEHIND THE SECTION 10(1 0 C) AND THE NOTE PUT UP BEFORE THE GOVERNOR AT THE TIME WHEN THE SCHEME WAS FRAMED. THE MATERIAL ON RECORD WOULD INDICATE THAT THE EMPLOYEES HAD BEEN RENDERED SURPLUS ON ACCOUNT OF VARIOUS STEPS TAKEN BY THE EMPLOYER. THE SCHEME, THEREFORE, WAS MEANT FOR A N OVERALL REDUCTION IN THE EXISTING STRENGTH OF THE EMPLOYEES. THE THIRD REQUIREMENT IS ALSO, THEREFORE, SATISFIED. THE FOURTH REQUIREMENT WAS THE VACANCY CAUSED BY THE VOLUNTARY RETIREMENT OR VOLUNTARY SEPARATION IS NOT TO BE FILLED UP. WE MAY FIRSTLY NOT E THAT A FINDING OF FACT HAS BEEN RECORDED BY THE TRIBUNAL ON THAT COUNT WHICH IS NOT CHALLENGED BEFORE US IN TERMS OF THE QUESTIONS OF LAW AS FRAMED BY THE REVENUE. SECONDLY THERE WAS MATERIAL ON RECORD WHICH SHOWS THAT THE SCHEME BASICALLY WAS TO REDUCE THE EMPLOYEE STRENGTH AS POSTS HAD BECOME SURPLUS 15 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA ON ACCOUNT OF REORGANIZATION. ONE CANNOT FILL IN THE POSTS WHICH HAVE BECOME SURPLUS AS THE POSTS HAVE BECOME REDUNDANT. ALSO ADDITIONAL EVIDENCE TAKEN ON RECORD UNDER SECTION 260A(7) WOULD SHOW THAT NONE O F THESE POSTS FROM THE DAY THE SCHEME CAME INTO FORCE TILL 2008 HAS BEEN FILLED IN. IN OTHER WORDS THE FOURTH REQUIREMENT HAS ALSO BEEN SATISFIED. INSOFAR AS THE FIFTH REQUIREMENT IS CONCERNED, THE TRIBUNAL HAS ALREADY ANSWERED THE ISSUE AND THAT FINDING O F FACT IS NOT IN ISSUE BEFORE US. EVEN OTHERWISE CONSIDERING THAT THE RB I IS A STATUTORY BODY CREATED UNDER AN ACT THERE IS NO OTHER COMPANY OR CONCERN BELONGING TO THE SAME MANAGEMENT. THE FIFTH REQUIREMENT HAS ALSO BEEN SATISFIED. THE SIXTH REQUIREMENT H AS ALSO BEEN SATISFIED AS IN THE INSTANT CASE WHAT IS OFFERED IS TWO MONTHS' SALARY FOR EACH COMPLETED YEAR OF SERVICE. THUS THE SCHEME EXPRESSLY OR IMPLIEDLY SATISFIED ALL THE REQUIREMENTS OF THE SECTION AS WELL AS THE GUIDELINES FRAMED FOR THE PURPOSE OF SECTION 10(10C) NAMELY RULE 2BA. 6.7.1. IN THE ABOVE CASE, IT WAS OBSERVED BY THE HON'BLE HIGH COURT THAT THE MATERIAL PLACED ON RECORD INDICATED THAT THE EMPLOYEES HAD BEEN RENDERED SURPLUS ON ACCOUNT OF VARIOUS STEPS TAKEN BY THE EMPLOYER AND THEREFORE, THE SCHEME WAS MEANT FOR AN OVERALL REDUCTION IN THE EXISTING STRENGTH OF THE EMPLOYEES. IT WAS ALSO OBSERVED THAT THERE WAS MATERIAL ON RECORD WHICH SHOWED THAT THE SCHEME BASICALLY WAS TO REDUCE THE EMPLOYEE STRENGTH AS POSTS HAD BECOME SURPLUS ON ACCOU NT OF REORGANIZATION AND ONE CANNOT FILL IN THE POSTS WHICH HAVE BECOME SURPLUS AS THE POSTS HAVE BECOME REDUNDANT. THE HIGH COURT, ON REACHING THESE CONCLUSIONS, WAS PERSUADED BY THE JUDICIAL NOTICE TAKEN BY THE HIGHEST COURT OF THE LAND, IN THE CASE OF S HASHIKANT LAXMAN KALE VS UOI [185 ITR 104] THAT THE VERY OBJECT OF ENACTING THE PROVISIONS OF SEC 10(10C) WAS TO DOWNSIZE THE EMPLOYEES STRENGTH SO THAT UNWANTED PERSONNEL COULD SEEK VOLUNTARY RETIREMENT THEREBY STREAMLINING THE PUBLIC SECTOR AND CURE IT O F ONE OF ITS AILMENTS OF OVERSTAFFING AND ENABLING THE PUBLIC SECTOR TO ACHIEVE THE TRUE OBJECT FOR WHICH IT WAS ESTABLISHED. ON THESE FACTS, THE HON'BLE COURT HELD THAT THE THIRD AND FOURTH CONDITIONS PRESCRIBED IN RULE 2BA ARE SATISFIED IN CASE OF THE RB I'S SCHEME. IN THE CASE OF THE VOLUNTARY RETIREMENT SCHEME OF KIRLOSKAR COPELAND LTD., IT IS CLEAR THAT IT IS NOT INTENDED TO RESULT IN THE OVERALL 16 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA REDUCTION IN THE EXISTING STRENGTH OF EMPLOYEES. RATHER IN RESPONSE TO INFORMATION REQUISITIONED BY THE ASSE SSING OFFICER, THE COMPANY ADMITTED THAT THE CONDITIONS REQUIRED UNDER RULE 2BA R.W.S . 10(10C) ARE NOT FULFILLED. THEREFORE, THE CONDITIONS (III) & (IV) IN RULE 2BA ARE ALSO NOT COMPLIED WITH. THEREFORE, IN MY HUMBLE OPINION, THE RATIO OF THE DECISION OF T HE BOMBAY HIGH COURT IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN REFERRED ABOVE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 6.8 SO FAR AS CONDITION FIVE (V) OF RULE 2BA IS CONCERNED, OTHER THAN ASSERTING THAT NONE OF THE APPELLANT'S WHO ARE EX - E MPLOYEES OF KIRLOSKAR COPELAND WERE REEMPLOYED WITH ANY OF THE OTHER KIRLOSKAR GROUP COMPANIES, NO OTHER EVIDENCES HAVE BEEN BROUGHT BEFORE ME. SO FAR AS THE CONDITION (VI) OF RULE 2BA IS CONCERNED, THE PAY OUT UNDER THE SCHEME IS 1.45 TIMES MONTHLY SALAR Y (BASIC + DA) FOR THE BALANCE MONTHS OF SERVICE FOR PERSONS WHO HAVE LESS THAN 60 OR 60 MONTHS OF SERVICE REMAINING, THAT IS, UPTO 5 YEARS OF SERVICE REMAINING. THE PAYOUT FOR EMPLOYEES HAVING 61 MONTHS AND ABOVE SERVICE IS 1.5 TIMES MONTHLY SALARY (BASIC + DA) FOR THE BALANCE 61 MONTHS OF SERVICE REMAINING, THAT IS, ABOVE 5 YEARS OF SERVICE REMAINING. RULE 2BA REQUIRES THE AMOUNT RECEIVABLE ON ACCOUNT OF VOLUNTARY RETIREMENT SHOULD NOT EXCEED THE AMOUNT EQUIVALENT TO 3 MONTHS SALARY FOR EACH COMPUTED YEAR OF SERVICE OR THE SALARY AT THE TIME OF RETIREMENT MULTIPLIED BY THE BALANCE MONTHS OF SERVICE LEFT BEFORE THE DATE OF RETIREMENT ON SUPERANNUATION. SINCE THE APPELLANT HAS RECEIVED MORE THAN ONE MONTH'S SALARY MULTIPLIED BY THE BALANCE MONTHS OF SERVICE LEFT BEFORE THE DATE OF RETIREMENT ON SUPERANNUATION FROM HIS EMPLOYER, HE DOES NOT APPARENTLY MEET THE CONDITIONS SPECIFIED IN RULE 2BA AND IS NOT QUALIFIED FOR EXEMPTION U/S 10(10C) OF THE IT ACT, 1961. MOREOVER AS PER THE TERMS OF THE SCHEME, THE RETIRI NG EMPLOYEES WERE PAID 50% OF THE TAX DUE ON THE RETIREMENT BENEFITS OVER AND ABOVE THE ELIGIBLE BENEFITS. FOR EXAMPLE, IF AN EMPLOYEE WAS ENTITLED TO RECEIVE A SUM OF RS.4 LAKHS AND THE TAX PAYABLE THEREON CAME TO RS.1 LAKH, THEN THE EMPLOYEE WAS PAID RS. 4,5 0,000/ - BEING THE TOTAL AMOUNT OF THE DUES OF RS.4 LAKHS AND 50% OF THE TAX PAYABLE ON RS.4 LAKHS. IT WAS ALSO ASSERTED BY THE COMPANY THAT THE EMPLOYEES WERE MADE AWARE OF THE EFFECT OF VRS INCLUDING THE FACT THAT THE COMPANY WOULD BE BEARING 50% OF TH E TAX DUE ON THE RETIREMENT BENEFITS. THE LETTER DATED 20.08.2000 FILED BY THE 17 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA EMPLOYEE WITH THE EMPLOYER WAS ALSO BROUGHT ON RECORD TO SHOW THAT THE EMPLOYEE HIMSELF REQUESTED THE EMPLOYER TO PERMIT HIM TO TAKE THE BENEFIT UNDER THE SCHEME VOLUNTARILY. TH EREFORE, IT CAN BE STATED THAT CONDITION (VI) OF RULE 2BA IS ALSO NOT MET IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 6.9 ON A CUMULATIVE APPRAISAL OF THE VOLUNTARY RETIREMENT SCHEME, 2000 ISSUED BY THE KIRLOSKAR COPELAND LTD, AS DIRECTED BY THE HO N'BLE ITAT PUNE IN THE APPELLANT'S OWN CASE, IT IS SEEN THAT AS MANY AS FIVE OUT OF THE SIX CONDITIONS PRESCRIBED UNDER RULE 2BA R.W.S. 10(10C) ARE NOT SATISFIED. EACH VOLUNTARY RETIREMENT SCHEME HAS TO BE EXAMINED IN ORDER TO SEE WHETHER ALL THE CONDITIO NS PRESCRIBED UNDER RULE 2BA R.W.S. 10(10C) ARE SATISFIED BEFORE AN ASSESSEE CAN CLAIM EXEMPTION THEREIN. AS DIRECTED BY THE HON'BLE PUNE BENCH OF THE ITAT, IT IS SEEN THAT THE READING OF THE VRS DOES NOT SHOW AN EXPLICIT DESIRE TO ATTAIN THE DOWNSIZING OR RIGHTSIZING OF THE COMPANY AND WHAT IS NOT EXPLICITLY MENTIONED CANNOT BE READ INTO THE SCHEME. 6.10 IT IS ALSO PERTINENT TO NOTE THAT IN THE FIRST ROUND OF LITIGATION, THE HON'BLE ITAT IN THE ORDER DATED 20.04.2006 (SUPRA)CONSIDERED THE CORE ISSUE AS TO WHETHER THE VRS OF KIRLOSKAR COPELAND LTD. WAS IN CONFORMITY WITH RULE 2BA OF THE INCOME TAX RULES 1962, AND ACCORDINGLY HELD VIDE PARA 9 OF THE ORDER AS UNDER: THE SUBSTANTIVE ISSUE IN THIS CASE IS WHETHER THE VRS IS IN CONFORMITY WITH THE RULE 2BA OF TH E INCOME TAX RULES. IN THIS CONNECTION THE CONTENTS OF THE SCHEME WERE COMPARED WITH THE RULE 2BA WITH REFERENCE TO ITS ALL SUB CLAUSES. THE FIRST AND THE SECOND SUB CLAUSES OF THE RULE ARE THAT THE SCHEME SHOULD APPLY TO ALL THE EMPLOYEES WHO HAVE COMPLET ED 10 YEARS OF THE SERVICE OR COMPLETED 40 YEARS OF THE AGE. THE VRS APPLIED ONLY TO THE WORKMEN EMPLOYED IN THE FACTORY SITUATED IN KARAD ONLY AND NOT TO ALL THE UNITS. AFTER TAKING INTO CONSIDERATION THE DEFINITION OF THE 'WORKMEN' IN THE VRS, IT IS SEEN THAT THE VRS DOES NOT COVER ALL THE EMPLOYEES AT KARAD UNIT ALSO AND IT ONLY COVERS PERMANENT WORKMEN EMPLOYED AS WORKER CUM - OPERATOR, CLERK, INSPECTOR, JUNIOR TECHNICIAN AND DRAFTSMAN. IN OTHER WORDS IT DOES NOT APPLY TO THE EXECUTIVES OF EVEN THE KARAD UNIT. THE ELIGIBILITY CONDITION IS ALSO MORE RESTRICTIVE BECAUSE IT APPLIES ONLY TO THOSE WORKMEN WHO HAS COMPLETED OF 12 YEARS OF SERVICE AND COMPLETED 40 YEARS OF THE AGE AGAINST THE CONTEMPLATION OF 10 YEARS OF SERVICE OR COMPLETED 40 18 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA YEARS OF THE AGE U NDER RULE 2BA. SUB CLAUSES ( III ) AND (IV) STIPULATE THAT THE SCHEME SHOULD BE DRAWN WITH A VIEW TO OBTAIN OVERALL REDUCTION IN EXISTING STRENGTH OF THE EMPLOYEES AND VACANCIES CAUSED BY VOLUNTARY RETIREMENT ARE NOT TO BE FILLED UP. IT IS NO DOUBT TRUE THAT THE OBJECT CLAUSE OF THE VRS STATES THAT IT IS DRAWN FOR ITS SURVIVAL, ECONOMIC VIABILITY AND COST CONTROL. HOWEVER, IT DOES NOT STATE THAT HE VACANCY CAUSED AS A CONSEQUENCE OF VRS SHALL NOT BE FILLED UP. SUB CLAUSE (V) STIPULATES THAT THE RETIRING EMPLO YEES SHALL NOT BE EMPLOYED EVEN IN ANOTHER COMPANY OR CONCERNED BELONGING TO THE SAME MANAGEMENT. THE LEARNED DR POINTED OUT THAT KIRLOSKAR GROUP CONTROLS A NUMBER OF COMPANIES WHICH FUNCTION UNDER THE SAME MANAGEMENT. THE VRS DOES NOT CONTAIN ANY STIPULAT ION THAT THE EMPLOYEES, AFTER GETTING VRS, WILL NOT BE EMPLOYED IN ANY OTHER COMPANY BELONGING TO THE SAME MANAGEMENT, SUB CLAUSE (VI) DEALS WITH THE BENEFIT RECEIVABLE ON ACCOUNT OF VOLUNTARY RETIREMENT. IT PROVIDES FOR A CHOICE BETWEEN TWO ALTERNATIVES, VIZ. A) ONE DEPENDING UPON THE COMPLETED YEARS OF SERVICE AND B) THE OTHER DEPENDING UPON THE BALANCE SERVICE LEFT. THE VRS PROVIDE A HYBRID FORMULA UNDER WHICH THE BENEFIT IS COMPUTED BY TAKING INTO ACCOUNT THE YEARS OF COMPLETED SERVICE AND ALSO THE YEAR S OF BALANCE SERVICE. OVER AND ABOVE THIS, THE VRS PROVIDES THIS ADDITIONAL BENEFIT BY WAY MEETING 50% OF THE TAX LIABILITY ARISING OUT OF PAYMENT IN CASE OF THE WORKMEN INVESTS IN THE ELIGIBLE INVESTMENTS TO GET MAXIMUM REBATE UNDER THE INCOME TAX ACT. TH E CASE OF THE LEARNED COUNSEL WAS THAT THIS BENEFIT WAS IN THE NATURE OF THE EX - GRATIA PAYMENTS, AND THEREFORE, IT SHOULD NOT BE CONSIDERED FOR THE PURPOSE OF DECIDING THE AMOUNT AS PER SUB CLAUSE (VI) OF THE RULE 2BA. WE ARE OF THE VIEW THAT SUCH INTERPRE TATION IF NOT FEASIBLE AS THIS BENEFIT IS ALSO MENTIONED IN THE VRS ITSELF. THUS LOOKING INTO VARIOUS CLAUSES OF THE VS AND THE PROVISIONS CONTAINED WITH RULE 2BA, WE ARE OF THE VIEW THAT IT IS NOT IN CONFORMITY WITH RULE 2BA. THE ARGUMENT OF THE LEARNED D R WAS ALSO THAT THIS WAS KNOWN AS ASSESSEE FOR REASONS, VIZ THE CLAUSE REGARDING THE ADDITIONAL BENEFIT FORMED PART AND PARCEL OF THE SCHEME, WHICH CLEARLY SHOWS THAT THE EMPLOYER HAD ALSO HELD OUT THAT THE VRS IS NOT IN CONFORMITY WITH RULE2BA. IN THIS CO NNECTION RELIANCE WAS ALSO SOUGHT TO BE PLACED ON THE FACT THAT TAX WAS DEDUCTED AT SOURCE FROM THE BENEFITS RECEIVED BY THE EMPLOYEE. THE CASE OF THE LEARNED COUNSEL WAS THAT THESE MATTERS SHOULD NOT ACT AS ESTOPPEL FROM TAKING LEGALLY ADMISSIBLE DEDUCTIO N UNDER THE ACT. WE AGREE WITH THE INTERPRETATION OF THE LEARNED 19 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA COUNSEL. NOTWITHSTANDING THIS ACCEPTANCE, IT IS CONCLUDED THAT THE VRS DID NOT CONFIRM WITH THE PROVISIONS CONTAINED UNDER RULE 2BA AND, THEREFORE, IT IS FURTHER HELD THAT THE LEARNED ASSESSI NG OFFICER WAS RIGHT IN BRINGING THE IMPUGNED AMOUNT TO TAX UNDER HEAD 'SALARIES'.' 6.11 THE FINDINGS OF THE BOMBAY HIGH COURT IN KOODATHIL KALLYATAN AMBUJAKSHAN AND THE SUBSEQUENT SUPREME COURT DECISION IN CASE OF CHANDRA RAGHUNATHAN VS. CIT REPORTED IN 3 26 ITR 49, WAS LIMITED TO THE OPTIONAL EARLY RETIREMENT SCHEME (OERS) OF THE RESERVE BANK OF INDIA AND THE CBDT ACCEPTED THAT SO FAR AS THE RETIRED EMPLOYEES OF THE RESERVE BANK OF INDIA ARE CONCERNED, THE DEPARTMENT WOULD ALLOW THE BENEFIT OF DEDUCTION TO THOSE SPECIFIC APPELLANTS U/S 10(10C) OF THE IT ACT, 1961. THEREFORE, THESE DECISIONS CANNOT BE APPLIED AS REPRESENTATIVE OR COVERED CASES IN FAVOUR OF THE APPELLANT WHO IS IN RECEIPT OF VRS INTRODUCED BY A PRIVATE SECTOR COMPANY. IN FACT THE DELHI HIGH C OURT IN THE CASE OF JODHRAJ SINGH VS. UNION OF INDIA REPORTED IN 234 ITR 871, HELD THAT THE ASSESSEE WHO WAS A PERMANENT EMPLOYEE IN TATA IRON AND STEEL COMPANY AT JAMSHEDPUR AND RECEIVED CERTAIN VOLUNTARY RETIREMENT BENEFITS IN JULY 1992 WAS NOT ENTITLED TO THE BENEFIT OF SECTION 10(10C) SINCE THE EMPLOYER COMPANY DID NOT APPLY FOR APPROVAL OF THE SCHEME TO THE CCIT OR DGIT, PRIOR TO THE DATE OF RETIREMENT OF THE ASSESSEE, WHICH WAS A MANDATORY REQUIREMENT UNDER THE 1 ST PROVISO TO SECTION 10(10C) IN RESPEC T OF PRIVATE SECTOR COMPANIES. THIS DECISION OF THE SINGLE JUDGE OF DELHI HIGH COURT HAS SINCE BEING REAFFIRMED BY A DIVISION BENCH OF DELHI HIGH COURT THAT IS REPORTED IN 244 ITR 786. THE DECISIONS OF THE DELHI AND BOMBAY HIGH COURTS IN THESE CITED CASES SHOW THAT THE TERMS OF EACH VRS HAS TO BE EXAMINED INDEPENDENTLY, IN ORDER TO SEE WHETHER THE CONDITIONS SPECIFIED BY RULE 2BA ARE MET OR NOT, WHICH THE ITAT PUNE HAS ITSELF DONE IN THE ORDER DATED 20.04.2006 (SUPRA). 6.12 THE AR HAS ALSO PLACED RELIANCE O N THE HON'BLE ITAT, PUNE DECISION IN THE CASE OF MARUTI SOMAPA GHEJI (CASE OF RETIRED EMPLOYEE OF SBI) IN ITA NO.578/PN/2010 FOR A.Y. 2007 - 08 WHEREIN, FOLLOWING THE ABOVE DECISION OF THE BOMBAY HIGH COURT REFERRED TO SUPRA, THE HON'BLE ITAT HELD AS UNDER: - 2. WE FIND THAT THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KOODATHIL KALLYATAN AMBUJAKSHAN (2009) 309 ITR 20 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA 113 WHEREIN THE AMOUNT RECEIVED UNDER OPTIONAL EARLY RETIREMENT SCHEME, WHICH IS FLOATED BY RBI WAS HELD TO BE APPLICABLE TO ALL THE EMPLOY EES WHO HAVE SERVED FOR 25 YEARS AND HAD ATTAINED THE AGE OR 50 YEARS. IT WAS AIMED AT REDUCTION IN THE EXISTING STRENGTH OF EMPLOYEES AND VACANCIES CAUSED WERE NOT FILLED UP. THE QUESTION OF EMPLOYING RETIRED EMPLOYEES WITH ANOTHER CONCERN OF SAME MANAGEM ENT DID NOT ARISE AS RBI HAD NONE. 3. THE LEARNED AR FOR THE ASSESSEE HAS SUBMITTED THAT THE FACTS IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN (SUPRA) ARE EXACTLY SIMILAR TO THE FACTS OF THE PRESENT CASE WITH AN EXCEPTION THAT THE SAME IS W ITH REGARD TO SBI EMPLOYEES. NOTHING CONTRARY WAS BROUGHT ON RECORD ON BEHALF OF THE LEARNED DR BEFORE US. 4. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, I AM NOT INCLINED TO CONCUR WITH THE FINDINGS OF THE CIT(A). IN THE FACTS AND CIRCUMSTANCES, I FIND THAT THE OPTIONAL EARLY RETIREMENT SCHEME OF SBI ALSO SATISFIED THE CONDITIONS OF RULE 2BA. ACCORDINGLY, I HOLD THAT THE RECEIPTS THEREUNDER WERE ELIGIBLE FOR EXEMPTION U/S 10(10C) OF THE ACT. 6.13 FOLLOWING THIS DECISION, SEVERAL OTHER DECISIONS I N THE CASE OF EX - EMPLOYEES OF SBI HAVE BEEN DECIDED BY PUNE ITAT BY FOLLOWING THE BOMBAY HIGH COURT DECISION IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN, WHICH ARE ENUMERATED HEREIN UNDER: (I) ITO VS JAVERILAL DALICHAND CHHAJED [ITA NO. 326/PN/2010] (II ) ITO VS VIJAY GANPATRAO PATIL [ITA NO. 1045/PN/2011] (III) BHALCHANDRA R. JOSHI VS ITO [ITA NO. 1330/PN/2011] (IV) VIJAY SIDDHESWAR JOG VS ITO [ITA NO. 1461/PN/2011] (V) ANIL V. BARDE VS ITO [ITA NO, 1460/PN/2011] (VI) ITO VS. JAYANT B. RUKADIKAR [ITA NO. L046/PN/2011] (VII) BALARAM GANPAT SHIKARE & OTHERS VS ITO [ITA NOS. 38, 40, 42, 44, 46, 48 & 73/PN/2014] 21 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA (VIII) BABURAO DAGDU LAMTURE & OTHERS VS ITO [ITA NOS. 37, 39, 41, 43, 45, 47&49/PN/2014] (IX) SHRI ANIL V. BARDE VS ITO [ITA/1460/PN/2011] (X) SMT. A NUPAMA R. AGESHE VS. ITO [ITA/1485/PN/2011] (XI) SHRI JAGDISH R. EKTARE VS. ITO [ITA/12/PN/2012] (XII) SHRI VARTAK A. NARAYAN VS. ITO [ITA/1282/PN/2011] (XIII) SHRI SHRIRAM R. SHTRI VS. ITO [ITA/1459/PN/2011] (XIV) SMT VAIJU P. PANDIT VS. ITO [ITA/1348/PN/ 2011] (XV) SHRI KHANKAL UTTAM NIVRUTTI VS. ITO [ITA/1283/PN/2011] (XVI) SHRI KAMAT DEEPAK VAMAN VS. ITO [ITA/1281/PN/2011] (XVII) SMT LEENA DEEPAK JOSHI VS. ITO [ITA/1278/PN/2011] (XVIII) SHRI JOSHI ANILKUMAR VS. ITO [ITA/1277/PN/2011] (XIX) SHRI PAND URANG D. DAREKAR VS. ITO [ITA/1498/PN/2011] (XX) SMT MEDHORA HAVOVI CAWAS VS. ITO [ITA/13/PN/2012] (XXI) SHRI AVANISH V. BADVE VS. ITO [ITA/29/PN/2012] (XXII) SHRI PRAKASH S. JAGUSTE VS. ITO [ITA/1280/PN/2011] (XXIII) SHRI VIJAY S. JOG VS. ITO [ITA/14 61/PN/2011] 6.14 AS COULD BE SEEN FROM THE DECISIONS OF THE HON'BLE ITAT, PUNE IN THE ABOVE CASES, NOTHING CONTRARY WAS BROUGHT ON RECORD BEFORE THE BENCH TO DISTINGUISH THE FACTS IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN AND IN THAT CONTEXT, THE HON' BLE BENCH HAS TAKEN A VIEW THAT THE FACTS BEING SIMILAR, THE SCHEME OF SBI ALSO SATISFIED THE CONDITIONS PRESCRIBED IN RULE 2BA. THE POINTS OF DISTINCTION WHICH WERE DISCUSSED HEREINABOVE WHILE REFERRING TO THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN WERE NOT BROUGHT TO THE NOTICE OF THE HON'BLE BENCH AND THE BENCH DID NOT HAVE THE BENEFIT OF PERUSAL OF VARIOUS CLAUSES IN THE EXIT OPTION SCHEME OF THE SBI. THE SBI SCHEME WAS AIMED AT IMPROVING THE MORALE OF THE FRUST RATED EMPLOYEES AND NOT AIMED AT DOWNSIZING OR RIGHTSIZING THE EXISTING STRENGTH OF THE EMPLOYEES. AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF SHANMUGAVEL NADAR VS. STATE OF TAMILNADU AND ANOTHER REPORTED IN 263 ITR 658, A COURT IS NOT BOUND BY AN 22 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA EARLIER DECISION IF IT WAS RENDERED WITHOUT ANY ARGUMENT, WITHOUT REFERENCE TO THE CRUCIAL WORDS OF THE RULE AND WITHOUT CITATION OF THE AUTHORITY. THE SUPREME COURT IN MUNICIPAL CORPORATION OF DELHI V. GURNAM KAUR [1989] 1 SCC 101, HELD THEREIN THAT 'PREC EDENTS SUB SILENTIO AND WITHOUT ARGUMENT ARE OF NO MOMENT'. IN THE PRESENT CASE, THE CRUCIAL WORDS UNDER THE CAPTION 'VACANCIES' IN THE EXIT OPTION SCHEME AS EXTRACTED HEREINABOVE, WERE NOT BROUGHT TO THE NOTICE OF THE HON'BLE BENCH AND THE DECISION WAS RE NDERED ONLY WITH REFERENCE TO THE OBSERVATIONS MADE IN THE DECISION OF THE HON'BLE BOMBAY HIGH COURT AND THE SUBMISSIONS MADE BY THE A.R. FOR THE ASSESSEE THAT THE FACTS IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN'S CASE ARE EXACTLY SIMILAR TO THE FACTS OF THE EXIT OPTION SCHEME OF SBI. THEREFORE, WITH GREAT RESPECT, THE DECISION OF THE HON'BLE PUNE BENCH IN THE ABOVE CASES ARE A PRECEDENT SUB SILENTIO AND SAME CANNOT BE EXTENDED TO THE EXIT OPTION SCHEME OF THE SBI OR TO THE VRS OF KIRLOSKAR COPELAND LT D. IN FACT, AS IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPELLANT'S CASE, IN A SUBSEQUENT DECISION IN THE CASE OF SHRI PAWAN DADA BIRU IN ITA NO. 1284/PN/04, DATED 29.10.2010, THE ITAT, PUNE RESTORED THE MATTER TO THE FILE OF ASSESSING OFFICER TO EXAM INE THE EXIT OPTION SCHEME OF THE SBI AND WHETHER ALL THE CONDITIONS HAVE BEEN SATISFIED AS PRESCRIBED IN RULE 2BA. IN THE PRESENT CASE, THE SAME EXERCISE WAS CARRIED OUT BY THE A.O. AND IT WAS FOUND THAT THE SAID SCHEME DOES NOT CONFORM TO THE GUIDELINES OF RULE 2BA OF THE I.T. RULES, FOR THE SAME REASON, THE RELIANCE PLACED ON THE VARIOUS AUTHORITIES BY THE LEARNED COUNSEL FOR THE APPELLANT ARE DISTINGUISHABLE ON FACTS AND THE SAME CANNOT BE APPLIED TO THE CASE OF THE APPELLANT. 6.15 APART FROM THE VARIOU S DECISIONS WHICH ARE ALREADY DEALT WITH HEREINABOVE, THE APPELLANT HAS ALSO DRAWN ATTENTION TO THE DECISION OF THE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS MARUTI UDYOG LTD. REPORTED IN 204 TAXMAN 649, WHICH HAS SINCE BEEN UPHELD BY THE HON'BLE SUP REME COURT OF INDIA BY DISMISSING SLP (C) NO, 37788 OF 2012 REPORTED IN 216 TAXMAN 206. HOWEVER THE ISSUE INVOLVED IN MARUTI UDYOG'S CASE WAS WHETHER AN ASSESSEE COULD BE TREATED 'ASSESSEE - IN - DEFAULT' FOR NOT DEDUCTING TAX AS SOURCE ON AMOUNTS PAID OVER AN D ABOVE THE AMOUNT ADMISSIBLE AS EXEMPTION UNDER THE PROVISIONS OF SECTION 10(10C) R. W. RULE 2BA. THE FACTS WERE THAT THE ASSESSEE, NARUTI UDYOG HAD PAID A SUM OF RS.73.60 CRORE TO THE EMPLOYEES WHICH HAD BEEN AMORTIZED UNDER SECTION 35 23 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA DDA OF THE INCOME TAX ACT, 1961. ON PERUSAL OF THE SCHEME, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COMPANY HAD PAID CERTAIN ADDITIONAL BENEFITS ALSO TO THE RETIRING EMPLOYEES ALONG WITH VRS. AFTER ANALYZING THE FEATURES OF VRS OF MARUTI UDYOG AND DISCUSSING THE PRO VISIONS OF SECTION 35DDA, SECTION 10(10C) AND RULE 2BA OF INCOME TAX RULES, THE ASSESSING OFFICER ARRIVED AT A CONCLUSION THAT THE SCHEME FLOATED BY THE ASSESSEE WAS NOT IN CONFORMITY WITH RULE 2BA OF THE INCOME TAX RULES AND, THEREFORE, BENEFIT OF SECTION 10(10C) WAS NOT AVAILABLE. SINCE SECTION 10(10C) WAS NOT AVAILABLE, THE ASSESSEE WAS LIABLE TO DEDUCT THE TAX AT SOURCE ON THE PAYMENTS MADE TO THE EMPLOYEES. AS THE ASSESSEE HAD FAILED TO DEDUCT THE TAX AT SOURCE, ASSESSING OFFICER DETERMINED THE ASSESSE E M/S. MARUTI UDYOG TO BE ASSESSEE IN DEFAULT. IT WAS FOUND ON THE FACTS OF THE CASE BY THE HIGH COURT THAT WHILE ASSESSING THE INCOME OF THE RETIRING EMPLOYEES, THE ASSESSING OFFICER GRANTED THESE EMPLOYEES THE BENEFIT OF TAX EXEMPTION U/S 10(10C) IN RESP ECT OF VRS PAYMENTS MADE UNDER VRS SCHEME TO THE EXTENT OF RS.5 LAKHS AND THESE ASSESSMENT ORDERS HAD BECOME FINAL. IT WAS HELD ON THE FACTS ON THE BASIS OF THE ABOVE FINDING THAT WHEN THE DEPARTMENT HAD CLEARLY AND UNEQUIVOCALLY HELD THAT TAX EXEMPTION U/ S 10(10C) WAS AVAILABLE TO THE EMPLOYEES UPTO A SUM .OF RS. 5 LAKHS, IT COULD NOT BE ARGUED THAT NO TAX EXEMPTION IS AVAILABLE IN RESPECT OF VRS PAYMENTS MADE BY THE ASSESSEE TO ANY OF ITS EMPLOYEES AND ON THIS PREMISE THE DEPARTMENT COULD NOT ALLEGE THAT SINCE THE ASSESSEE DID NOT DEDUCT TAX ON THIS AMOUNT IT WAS TO BE TREATED AS 'ASSESSEE - IN - DEFAULT'. THE CIT (APPEAL)'S RELIANCE ON GUJARAT HIGH COURT DECISION IN THE CASE OF ARUNKUMAR T. MAKWANA VS ITO REPORTED IN 156 TAXMAN 429 FOR THE PROPOSITION THAT IR RESPECTIVE OF THE AMOUNT PAYABLE/ RECEIVABLE TO/BY AN EMPLOYEE ON ACCOUNT OF VOLUNTARY RETIREMENT, THE AMOUNT THAT COULD QUALIFY U/S 10(10C) WOULD BE RS.5 LAKHS ONLY, WAS APPROVED BY THE HIGH COURT. IT IS ON THIS ACCOUNT THAT IT WAS HELD THAT THE ASSESSEE HAS ACTED IN THE BONAFIDE MANNER AND COULD NOT BE TREATED AS *ASSESSEE - IN - DEFAULT'. THIS DECISION CANNOT HOWEVER COME TO THE RESCUE OF THE APPELLANT SINCE ADMITTEDLY THE VRS OF MARUTI UDYOG LTD. CONFORMED TO THE PROVISION OF SECTION 10(10C) R.W. RULE 2BA A ND IT WAS A FINDING OF FACT THAT THE SAME HAD BEEN ALLOWED TO THE EX - EMPLOYEES OF MARUTI UDYOG BY THE RESPECTIVE ASSESSING OFFICERS. WHEREAS IN THE PRESENT CASE IT IS FOUND THAT THE VRS 2000 SCHEME OF KIRLOSKAR COPELAND LTD. IS NOT COMPLIANT TO SECTION 10( 10C) R.W. RULE 2BA. 24 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA 6.16 IN THE PRESENT CASE, AS HAS ALREADY BEEN POINTED OUT, THE ASSESSING OFFICER, AFTER EXTENSIVELY ANALYZING THE FEATURES AND TERMS OF THE SAID OPTION SCHEME, HAS ARRIVED AT THE CONCLUSION THAT THE VOLUNTARY RETIREMENT SCHEME OF KIRLOS KAR COPELAND LTD. DID NOT MEET THE CONDITIONS LAID DOWN IN RULE 2BA R.W.S. 10(10C) OF THE I.T. ACT AND THEREFORE, THE ABOVE DECISIONS RELIED UPON BY THE APPELLANT, IN MY HUMBLE OPINION, CANNOT BE APPLIED TO THE FACTS OF THE CASE. ACCORDINGLY, KEEPING IN MI ND THE DISCUSSION IN THE PRECEDING PARAGRAPHS AND ON EXAMINATION OF THE VRS 2000 SCHEME OF KIRLOSKAR COPELAND LTD., IT IS HELD THAT THE SAID SCHEME FAILS TO MEET THE REQUIREMENTS OF RULE 2BA. THEREFORE, IT IS HELD THAT THERE IS NO INFIRMITY IN THE ACTION O F THE ASSESSING OFFICER IN DENYING THE EXEMPTION U/S. 10(10C) IN RESPECT OF EX - GRATIA PAYMENTS RECEIVED BY THE APPELLANT ON HIS RETIREMENT FROM THE COMPANY. THE DISALLOWANCE IS, ACCORDINGLY, UPHELD. GROUNDS OF APPEAL NOS. 1 TO 4 STAND DISMISSED. NOW, ALL T HESE ASSESSEES ARE IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. WE HAVE TO EXAMINE THE SCHEME OF THE VRS - 2000 FRAMED BY KIRLOSKAR COPELAND LTD. IN CONTEXT OF SEC. 10(10C) R.W. RULE 2BA OF THE INCOME - T AX RULE, 1962. SEC. 10(10C) OF THE ACT READS AS UNDER: (10C ) ANY AMOUNT RECEIVED OR RECEIVABLE BY AN EMPLOYEE OF ( I ) A PUBLIC SECTOR COMPANY ; OR ( II ) ANY OTHER COMPANY ; OR ( III ) AN AUTHORITY ESTABLISHED UNDER A CENTRAL, STATE OR PROVINCIAL ACT OR ( IV ) A LOCAL AUTHORITY ; OR [( V ) A CO - OPERATIVE SOCIETY ; OR ( VI ) A UNIVERSITY ESTABLISHED OR INCORPORATED BY OR UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 19 56 (3 OF 1956) ; OR ( VII ) AN INDIAN INSTITUTE OF TECHNOLOGY WITHIN THE MEANING OF CLAUSE ( G ) OF SECTION 368 OF THE INSTITUTES OF TECHNOLOGY ACT, 1961 (59 OF 1961) ; OR [( VIIA ) ANY STATE GOVERNMENT; OR] [( VIIB ) THE CENTRAL GOVERNMENT; OR] 25 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA [( VIIC ) AN INSTITU TION, HAVING IMPORTANCE THROUGHOUT INDIA OR IN ANY STATE OR STATES, AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN THIS BEHALF; OR ( VIII ) SUCH INSTITUTE OF MANAGEMENT AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL G AZETTE, SPECIFY IN THIS BEHALF, [ON HIS] [VOLUNTARY RETIREMENT OR TERMINATION OF HIS SERVICE, IN ACCORDANCE WITH ANY SCHEME OR SCHEMES OF VOLUNTARY RETIREMENT OR IN THE CASE OF A PUBLIC SECTOR COMPANY REFERRED TO IN SUB - CLAUSE ( I ), A SCHEME OF V OLUNTARY SEPARATION, TO THE EXTENT SUCH AMOUNT DOES NOT EXCEED FIVE LAKH RUPEES : PROVIDED THAT THE SCHEMES OF THE SAID COMPANIES OR AUTHORITIES [OR SOCIETIES OR UNIVERSITIES OR THE INSTITUTES REFERRED TO IN SUB - CLAUSES ( VII ) AND ( VIII )], AS THE CASE MAY B E, GOVERNING THE PAYMENT OF SUCH AMOUNT ARE FRAMED IN ACCORDANCE WITH SUCH GUIDELINES (INCLUDING INTER ALIA CRITERIA OF ECONOMIC VIABILITY) AS MAY BE PRESCRIBED PROVIDED FURTHER THAT WHERE EXEMPTION HAS BEEN ALLOWED TO AN EMPLOYEE UNDER THIS CLAUSE FOR ANY ASSESSMENT YEAR, NO EXEMPTION THEREUNDER SHALL BE ALLOWED TO HIM IN RELATION TO ANY OTHER ASSESSMENT YEAR ;] PROVIDED ALSO THAT WHERE ANY RELIEF HAS BEEN ALLOWED TO AN ASSESSEE UNDER SECTION 89 FOR ANY ASSESSMENT YEAR IN RESPECT OF ANY AMOUNT RECEIVED OR RECEIVABLE ON HIS VOLUNTARY RETIREMENT OR TERMINATION OF SERVICE OR VOLUNTARY SEPARATION, NO EXEMPTION UNDER THIS CLAUSE SHALL BE ALLOWED TO HIM IN RELATION TO SUCH, OR ANY OTHER, ASSESSMENT YEAR; 6. RULE 2BA OF THE INCOME - TAX RULE, 1962 READS AS UNDER: 2 BA - THE AMOUNT RECEIVED BY AN EMPLOYEE OF (I) A PUBLIC SECTOR COMPANY; OR (II) ANY OTHER COMPANY; OR (III) AN AUTHORITY ESTABLISHED UNDER A CENTRAL, STATE OR PROVINCIAL ACT; OR (IV) A LOCAL AUTHORITY; OR (V) A CO - OPERATIVE SOCIETY; OR (VI) A UNIVER SITY ESTABLISHED OR INCORPORATED BY OR UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956); OR 26 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA (VII) AN INDIAN INSTITUTE OF TECHNOLOGY WITHIN THE MEANING OF CLAUSE (G) OF SECTION 3 OF THE INSTITUTES OF TECHNOLOGY ACT, 1961 (59 OF 1961); OR [(VIIA) AN INSTITUTION, HAVING IMPORTANCE THROUGHOUT INDIA OR IN ANY STATE OR STATES, AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN THIS BEHALF; OR (VIII) SUCH INSTITUTE OF MANAGEMENT AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN THIS BEHALF, AT THE TIME OF HIS VOLUNTARY RETIREMENT OR VOLUNTARY SEPARATION SHALL BE EXEMPT UNDER CLAUSE (1 0C) OF SECTION 10 ONLY IF THE SCHEME OF VOLUNTARY RETIREMENT FRAMED BY THE AFORESAID COMPANY OR AUTHORITY [OR CO - OPERATIVE SOCIETY OR UNIVERSITY OR INSTITUTE], AS THE CASE MAY BE [OR IF THE SCHEME OF VOLUNTARY SEPARATION FRAMED BY A PUBLIC SECTOR COMPANY], IS IN ACCORDANCE WITH THE FOLLOWING REQUIREMENTS, NAMELY: (I) IT APPLIES TO AN EMPLOYEE 10B[* * *] WHO HAS COMPLETED 10 YEARS OF SERVICE OR COMPLETED 40 YEARS OF AGE; [(II) IT APPLIES TO ALL EMPLOYEES (BY WHATEVER NAME CALLED) INCLUDING WORKERS AND EXE CUTIVES OF A COMPANY OR OF AN AUTHORITY OR OF A CO - OPERATIVE SOCIETY, AS THE CASE MAY BE, EXCEPTING DIRECTORS OF A COMPANY OR OF A CO - OPERATIVE SOCIETY;] (III) THE SCHEME OF VOLUNTARY RETIREMENT 10AA[OR VOLUNTARY SEPARATION] HAS BEEN DRAWN TO RESULT IN OV ERALL REDUCTION IN THE EXISTING STRENGTH OF THE EMPLOYEES ]; (IV) THE VACANCY CAUSED BY THE VOLUNTARY RETIREMENT 10AA[OR VOLUNTARY SEPARATION] IS NOT TO BE FILLED UP; (V) THE RETIRING EMPLOYEE OF A COMPANY SHALL NOT BE EMPLOYED IN ANOTHER COMPANY OR CONC ERN BELONGING TO THE SAME MANAGEMENT; (VI) THE AMOUNT RECEIVABLE ON ACCOUNT OF VOLUNTARY RETIREMENT [OR VOLUNTARY SEPARATION] OF THE EMPLOYEE, DOES NOT EXCEED THE AMOUNT EQUIVALENT TO ONE AND [THREE MONTHS SALARY] FOR EACH COMPLETED YEAR OF SERVICE OR SAL ARY AT THE TIME OF RETIREMENT MULTIPLIED BY THE BALANCE MONTHS OF SERVICE LEFT BEFORE THE DATE OF HIS RETIREMENT ON SUPERANNUATION. [PROVIDED THAT REQUIREMENT OF (I) ABOVE WOULD NOT BE APPLICABLE IN CASE OF AMOUNT RECEIVED BY AN EMPLOYEE OF A PUBLIC SECTO R COMPANY UNDER THE SCHEME OF VOLUNTARY SEPARATION FRAMED BY SUCH PUBLIC SECTOR COMPANY] 27 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA EXPLANATION: IN THIS RULE, THE EXPRESSION 'SALARY' SHALL HAVE THE SAME MEANING AS IS ASSIGNED TO IT IN CLAUSE (H) OF RULE 2 OF PART A OF THE FOURTH SCHEDULE.] 7. TH E FIRST CONDITION IS THAT THE VRS SHOULD BE APPLIED TO THE EMPLOYEE WHO HAS COMPLETED MINIMUM 10 YEARS OF SERVICE OR COMPLETED 40 YEARS OF AGE. IN THE PRESENT CASE, AS PER THE VRS SCHEME FIRST CONDITION IS FULFILLED. THE NEXT CONDITION IS THAT EXCEPT THE DIRECTORS OF THE COMPANY OR THE CO - OPERATIVE SOCIETY , SCHEME SHOULD BE APPLICABLE TO ALL CLASS OF THE EMPLOYEES INCLUDING WORKERS AND EXECUTIVES OF THE COMPANY . AS PER THE VRS SCHEME OF THE KIRLOSKAR COPELAND LTD. THE SAID SCHEME IS MADE APPLICABLE TO AL L THE PERMANENT WORKERS OF THE COMPANY EMPLOYED AS OPERATOR, CLERK, INSPECTOR, JR. TECHNICIAN AND DRAUGHTSMAN ETC. THE LD. CIT(A) HAS INTERPRETED THE SAID SCHEME IN THE NEGATIVE SENSE BY HOLDING THAT THE CLAUSE - ( II ) IN RULE 2BA IS NOT SATISFIED. ON INTER PRETING CLAUSE - ( II ) RULE 2BA W HAT WE UNDERSTAND IS THAT THE DIRECTORS OF THE COMPANY ARE KEPT OUT OF THE ELIGIBILITY CRITERIA OTHERWISE ALL THE EMPLOYEES OF THE COMPANY ARE MADE ELIGIBLE FOR OPTING THE RETIREMENT UNDER THE VRS SCHEME. IN THE INDUSTRIAL JU RISPRUDENCE THE EMPLOYER IS THE BEST JUDGE TO DECIDE IN WHICH THE DEPARTMENT AND IN WHAT CATEGORY OF WORKERS HE SHOULD REDUCE THE LABOUR FORCE OR EMPLOYEES STRENGTH. T HE LOGIC OF THE LD. CIT(A) ITSELF IS NOT CORRECT THAT AS THE COMPANY HAS APPLIED THE SCH EME TO ONLY CERTAIN CLASS OF THE EMPLOYEES HENCE, THE CONDITION OF CLAUSE - ( II ) OF RULE 2BA IS NOT FULFILLED. NOTHING HAS BEEN BROUGHT ON RECORD ALSO BY THE LD. CIT(A) BEFORE MAKING SUCH OBSERVATIONS AT LEAST CALLING THE DATA FROM THE COMPANY WHETHER IN FA CT THERE WAS NO OVERALL REDUCTION IN THE EMPLOYEES/WORKMEN IN THE COMPANY. 8. IN THE CASE OF KOODATHIL KALLYATAN AMBUJAKSHAN (SUPRA) WHILE CONSIDERING THE PROVISIONS OF SEC. 10(10C) HAS OBSERVED THAT RULE 2BA LAID DOWN THE GUIDELINES FOR THE PURPOSE OF SEC. 10(10C) OF THE ACT BUT 28 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA THE SAID RULE, HOWEVER, WILL HAVE TO BE READ BORNE IN MIND THE OBJECT OF SEC. 10(10C) ITSELF. IN THE SAID DECISION NOWHERE IT IS OBSERVED BY THEIR LORDSHIPS THAT THE VRS SCHEME SHOULD BE MADE APPLICABLE TO EMPLOYEES WORKING IN ALL THE DEPARTMENTS. THE OBSERVATION OF THEIR LORDSHIPS IN THE SAID DECISION THAT THE OERS OF THE RBI WAS OVERALL APPLICABLE IS MADE IN THE CONTEXT OF THE SCHEME FRAMED BY THE RBI. THE TERM OVERALL IS A GENERAL IN NATURE BUT FROM THE SAID TERM NO INTER FERENCE CAN BE MADE THAT IRRESPECTIVE OF THE FACT WHETHER THERE IS A SURPLUS EMPLOYEES ARE NOT THE EMPLOYER MUST REDUCE THE WORKERS OR EMPLOYEES IN ALL THE SECTIONS AND DEPARTMENTS OF HIS UNDERTAKING. ON PERUSAL OF THE SCHEME ITSELF MAKE IT CLEAR THAT THE SAID SCHEME WAS INITIATED FOR THE ECONOMIC SURVIVAL OF THE COMPANY AND REDUCTION IN THE COST. ON THE PLAIN READING OF THE CONDITION IN CLAUSE - ( II ) SUGGEST THAT IN CASE OF FULL TIME DIRECTORS THEY CANNOT BE THE BENEFICIA RY BUT DOES NOT SUGGEST THAT THE CO MPANY IS UNDER THE OBLIGATION TO REDUCE THE WORK FORCE IN ALL THE DEPARTMENT /OR CLASS OF EMPLOYEES IRRESPECTIVE OF THE FACT WHETHER THE WORK FORCE IS NECESSARY FOR OPTIMUM WORKING OF THE COMPANY. IN OUR OPINION THE CONDITION IN CLAUSE - ( II ) IS ALSO FULFILL ED. 9. SO FAR AS THE CONDITION OF THE APPROVAL OF THE SCHEME BY THE CHIEF COMMISSIONER OR THE DIRECTOR GENERAL OF INCOME TAX , THE LD. CIT(A) HAS ACCEPTED THAT THERE IS NO REQUIREMENT TO GET THE SCHEME APPROVED BY THE CCIT/DGIT FOR PUT TING THE SCHEME INTO THE BENEFIT S OF THE BASKET U/S. 10(10C) OF THE ACT. SO FAR AS THIRD CONDITION IS CONCERNED , WE HAVE ALREADY HELD THAT THERE IS OVERALL REDUCTION IN THE EXISTING STRENGTH OF THE EMPLOYEES OF THE COMPANY WHICH IS DISCUSSED WHILE DECIDING C ONDITION NO. - ( II ) OF RULE 2BA . THE NEXT CONDITION IS THAT THE EMPLOYER COMPANY SHOULD NOT FILL UP THE VACANCIES CAUSED BY THE VRS. AS PER THE RECORD , WE FIND THAT IT WAS CLAIMED BEFORE THE ASSESSING OFFICER THAT AFTER DECLARING THE VRS SUBSEQUENTLY THE COMPANY WAS CLOSED DOWN AND TO THAT EFFECT AN AFFIDAVIT IS ALSO FILED BEFORE US. IN OUR OPINION THE 29 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA CONDITION NO. - ( IV ) IS ALSO FULFILLED. THE NEXT CONDITION IS THAT THE RETIRED EMPLOYEES OF THE COMPANY SHOULD NOT BE EMPLOYED IN ANY OTHER COMPANY OR CONCERN BELONGING TO OR UNDER THE SAME MANAGEMENT. WE FIND THAT TO THAT EXTENT THE EMPLOYEES HAVE GIVEN THE UNDERTAKING . I F THE AUTHORITIES BELOW DID NOT ACCEPT THE UNDERTAKING GIVEN BY THE EMPLOYEES, THEN THEY SHOULD HAVE BROUGHT ON RECORD SOME EVIDENCE BY CALLING THE INFORMAT ION FROM THE EMPLOYER COMPANY . W E DO NOT UNDERSTAND A S ON WHICH BASIS THE LD. CIT(A) HAS OBSERVED THAT THE CONDITION OF THE RE - EMPLOYMENT HAS NOT BE FULFILLED. IN OUR OPINION ONCE THE ASSESSEE STATED THAT HE HAS NOT BEEN EMPLOYED IN ANY COMPANY UNDER THE MANAGEMENT OF HIS EMPLOYER COMPANY THEN BURDEN IS ON THE REVENUE TO BRING ON RECORD EVIDENCE TO SHOW CONTRARY THAT SUCH UNDERTAKING IS NOT CORRECT. IN OUR OPINION THE CONDITION NO. - ( V ) IS ALSO FULFILLED. THE SIXTH AND LAST CONDITION IS THAT THE AMOUNT R ECEIVED ON THE VRS SHOULD NOT EXCEED THE AMOUNT EQUIVALENT TO THREE MONTHS SALARY FOR EACH COMPLETED YEAR OF SERVICE OR SALARY AT THE TIME OF RETIREMENT MULTIPLIED BY THE BALANCE MONTHS OF SERVICE LEFT CONSIDERING THE DATE OF HIS RETIREMENT ON SUPERANNUATI ON. 10. ON PERUSAL OF THE SCHEME FRAMED BY THE EMPLOYER COMPANY IN THESE CASES , WE FIND THAT THERE IS A MAXIMUM CEILING OF RS.5,00,000/ - ON THE MONETARY BENEFITS/COMPENSATION TO BE PAID TO THE WORKER/EMPLOYEE . THE LD. CIT(A) HAS ONLY SEEN THAT HOW MUCH C OMPENSATION IS PAID TO THE EMPLOYEE IN RESPECT OF BALANCE SERVICE LEFT CONSIDERING THE AGE OF SUPERANNUATION OF THE EMPLOYEE/WORKER BUT ON THE PLAIN READING OF THE CONDITION - ( VI ) , IT IS SEEN THAT THE MONETARY BENEFIT/COMPENSATION CAN BE TO THE EXTENT OF TH REE MONTHS SALARY OF THE COMPLETED YEARS OF SERVICE. THE EXPRESSION COMPLETED YEARS OF SERVICE IS DEFIN ED IN THE SCHEME IN CLAUSE - ( J ) OF THE DEFINITION SECTION. IN THE SCHEME APART FROM THE COMPENSATING THE EMPLOYEE IN RESPECT OF THE BALANCE SERVICE LE FT ( OF COURSE AFTER CONSIDERING THE AGE ON DATE OF SUPERANNUATION AS PER THE (I NDUSTRIAL EMPLOYEES STAND ORDERS OR OTHERWISE) , T HEY ARE ALSO PAID AT 30 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA PAR RS.445/ - FOR EACH COMPLETED YEAR OF SERVICE , THE AMOUNT OFFERED FOR THE EACH COMPLETED YEAR OF SERVICE IS MENTIONED IN THE SUM BUT IT IS NOT KNOWN WHETHER THE SAID AMOUNT IS EQUIVALENT TO ONE MONTH SALARY OR THREE MONTHS SALARY. THE ASSESSING OFFICER SHOULD HAVE DONE THE EXERCISE TO CALL FOR THE INFORMATION FROM THE COMPANY TO FIND OUT WHETHER THE COMPENSA TION PAID TO THE EMPLOYEES OPTED FOR THE VRS ARE WITHIN THE CEILING IN RESPECT OF PART - I OF CONDITION - ( VI ) . APART FROM THAT AS PER SEC. 10(10C), THE MAXIMUM AMOUNT ELIGIBLE FOR EXEMPTION IS TO EXTEND OF RS.5,00,000/ - AND AS PER VRS SCHEME, THERE IS CEILIN G ON MONETARY BENEFIT TO BE GIVEN TO EMPLOYEE WHICH IS MAXIMUM RS.5,00,000/ - . NOWHERE IT IS A CASE OF THE ASSESSING OFFICER THAT THESE ASSESSEES HAVE AVAILED MORE BENEFIT THAT CEILING MENTIONED IN SEC. 10(10C) OF THE ACT. 11. THE LD. CIT(A) HAS ALSO OBSERVED THAT THE EMPLOYEES WERE PROMISED THAT THE 50% OF THE INCOME TAX ON THE AMOUNT RECEIVED BY THE EMPLOYEES UNDER THE VRS SCHEME WILL BE BORNE BY THE COMPANY. WE FIND THAT IT IS CONDITIONAL OFFER AND NOT AN ABSOLUTE OFFER . T HE EMPLOYEE HAS TO MAKE T HE INVESTMENT OF THE AMOUNT RECEIVED UNDER THE VRS WHEREBY THE MAXIMUM TAX REBATE IS APPLICABLE. IN OUR OPINION CONSIDERING THE SCHEME OF SEC. 10(10C) AND OBJECT BEHIND GIVING THE BENEFIT I.E. TO REDUCE THE COST OF PRODUCTION AND TO PROTECT THE INDUSTRIES FROM ECONOMIC DEATH BY MASS CLOSURE . THE BENEFIT IN THE NATURE OF THE TAX INCENTIVE WAS GIVEN WHEREBY THE MAXIMUM EMPLOYEES MAY OPT FOR THE VRS AND AT THE SAME TIME THE ECONOMIC VIABILITY OF THE INDUSTRIES CAN BE SUSTAIN ED . WE, ACCORDINGLY, HOLD THAT AL L THE CONDITIONS OF RULE 2BA ARE FULFILLED IN THE VRS SCHEME FRAMED BY THE EMPLOYER COMPANY I.E. KIRLOSKAR COPELAND LTD. AND BOTH THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN DENYING THE BENEFIT OF EXEMPTION TO THESE EMPLOYEES. WE, ACCORDINGLY, DECIDE THE I SSUE IN FAVOUR OF ALL THESE ASSESSEES AND DIRECT THE ASSESSING OFFICER TO ALLOW THE EXEMPTION TO ALL THESE ASSESSEES U/S. 10(10C) OF THE ACT. 31 ITA NO S. 1074 TO 109 7 , 1132 TO 1139 & 1299/PN/2014, SHRI SHEDAGE SHAMRAO MAHADEV & ORS. , SATARA 12. WE FIND THAT WHILE ADDRESSING THE ISSUE ARISING IN THESE APPEALS THE LD. CIT(A) HAS REFERRED TO THE ORDER OF T HIS TRIBUNAL IN THE FIRST ROUND OF APPEAL DATED 20 - 04 - 2006 IN PARA NO. 6.10 OF THE IMPUGNED ORDER KNOWING THE FACT THAT THE SAID ORDER IS NON - EST AS THE SAID ORDER WAS RECALLED BY THE TRIBUNAL AND THEREAFTER HEARING THE PARTIES THE ISSUE WAS REMITTED TO TH E FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION DE NOVO HENCE, IN OUR OPINION THE LD. CIT(A) SERIOUSLY ERRED IN REFERRING TO THE ORDER OF THIS TRIBUNAL WHICH NON - EST IN VIEW OF THE FACT THAT ENTIRE ORDER WAS RECALLED. 1 3 . IN THE RESULT, ALL THE APP EALS ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 - 07 - 20 1 4 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 25 TH JULY, 2014 COPY TO 1 ASSESSEE 2 DEPART MENT 3 4 THE CIT(A) - III, PUNE THE CIT - III, PUNE 5 THE DR, ITAT, B BENCH, PUNE. 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE