Commissioner Of Income-Tax, Chennai v. S.sakthimala

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 25.07.2006 Coram The Honourable Mr.Justice P.D.DINAKARANand The Honourable Mr.Justice P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.2139 of 2006 Commissioner of Income-Tax,Chennai....Appellant Vs.S.Sakthimala...Respondent The above T.C.(Appeal) is preferred under Section 260A of theIncome-Tax Act, 1961 against the order of the Income Tax AppellateTribunal, Madras ‘B’ (SMC) Bench, dated 11.11.2005 made in ITANo.3271/Mds/2004 for the assessment year 2001-02. and against theorder of the Commissioner of Income Tax (Appeals) in ITA.No.371/04-05 dated 27.9.2004. For Appellant: Mrs.Pushya Sitaraman----------J U D G M E N T (Judgment of the Court was made by P.D.DINAKARAN, J.) The above tax case appeal is directed against the order ofthe Income-tax Appellate Tribunal made in ITA.No.3271/Mds/2004,dated 11.11.2005. 2. The Revenue is the appellant. The assessment yearinvolved is 2001-2002. The case of the appellant is that theassessee/respondent herein, availed the benefit of the voluntaryretirement scheme and claimed exemption of the amount ofcompensation received, both under Section 10(10C) and Section 89(1)of the Income Tax Act. 3.The Assessing Officer granted exemption as envisagedunder Section 10(10C) of the Act, but denied the exemption underSection 89(1) of the Act, on the ground that once exemption underSection 10(10C) is allowed, Section 89(1) cannot be invoked. Onappeal at the instance of the assessee, the Commissioner ofIncome-tax (Appeals), taking the view that it is possible tointerpret the sections both ways, and where there is an ambiguity,the benefit should be given to the tax payer, allowed the appeal,which was confirmed by the Income Tax Appellate Tribunal, on appealby the Revenue. 4. Aggrieved by the same, the Revenue has preferred thisappeal raising the following substantial question of law : "Whether in the facts and circumstances ofthe case, the Tribunal was right in holdingthat the assessee is eligible to claimsimultaneous benefit under Section 10(10C) aswell as Section 89(1) in respect of thecompensation received under the voluntaryretirement scheme?" 5. It is fairly conceded by the learned counsel appearing forthe Revenue that the issue raised in the above question is squarelycovered against the Revenue by the decision of this Court inCommissioner of Income-tax Vs. G.V.Venugopal (273 ITR 307), whereinit is held as under:- "The second proviso to section 10(10C) onlyrefers to exemption claimed in any other year.Every assessment year is a self-contained unitand the mere fact that the relief under section89 had been spread over several years, did notmean that the relief was not in respect of aparticular assessment year. There was noprohibition to the twin benefits in respect ofthe amount received under the voluntaryretirement scheme. The relief contemplatedunder section 89(1) is aimed to mitigatehardship that may be caused on account of thehigh incidence of tax due to progressiveincrease in tax rates. Payment under thevoluntary retirement scheme is covered by theword "salary" which has been given a very widedefinition in section 17. Since the assesseewas covered by section 89, he would get boththe benefits." 6. In view of the above settled proposition of law, we do notsee any merit in this appeal and the same isdismissed. No costs. sra Sd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1.The Assistant Registrar,Income Tax Appellate TribunalSMC Bench "B", Chennai.2.The Secretary, Central Board of Direct Taxes, New Delhi.3.The Commissioner of Income Tax (Appeals) -IV, 121, Mahatma Gandhi Road, Chennai-600 034.4.The Asst. Commissioner of Income-tax, Salary Circle II, Chennai.+ 1 cc to Mrs. Pushyasitaram, SSC (IT) SR No. 32795T.C.(A) No.2139 of 2006SGL(CO)SR/22.8.2006