K.s.kannan v. The Assistant Commissioner Of Income Tax, Circle Ii, Madurai

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 27.06.2018 CORAM : THE HONOURABLEMR.JUSTICE M.GOVINDARAJ Writ Petition (MD) No.12664 of 2018 K.S.Kannan... Petitioner Vs. 1. The Assistant Commissioner of Income Tax, Circle II, Madurai. 2. The Income Tax Officer, Ward I (1), Karaikudi.... Respondents Petition filed under Article 226 of the Constitution of Indiapraying for issuance of a Writ of Mandamus, to direct therespondents to grant the refund eligible under section 10 (10C) ofIncome Tax Act to the petitioner as amount received by an employeeon his Voluntary Retirement Scheme an amount of five lakhs is nottreated as taxable income. For Petitioner : Mr.P.ArunjayatramFor Respondents: Mrs.S.Srimathy ORDER The writ petitioner is seeking a direction for refund ofthe tax amount already paid to the respondents. 2.As per Section 10(10C) of the Income Tax Act, 1961, theamount received by way of Voluntary Retirement Scheme upto Rs.5lakhs is exempted under the Act as it is not taxable. However, Rule2BA of the Income Tax Rules, 1962 specifies that VoluntaryRetirement Scheme shall be approved by the Income Tax Departmentotherwise, the employees are not entitled to avail exemption grantedunder Section 10(10C) of the Income Tax Act, 1961. 3.When the matter was put under challenge, the Bombay HighCourt inCommissioner of Income Tax Vs.Koodathil KallyatanAmbujakshan reported in (2008) 219 CTR (Bom) 80 has held that theRules cannot prevail over the Act. Insofar as the Rule 2BA exceedssubstantive provisions of the Act is concerned, it was rendered asultra vires and that the entitlement of the petitioner for theexemption was granted. However, in subsequent cases, the Income Taxhttps://hcservices.ecourts.gov.in/hcservices/Department has gone on appeal to the Hon'ble Supreme Court. TheHon'ble Supreme Court while disposing of the batch of matters has left the particular question open and dismissed the appeals.Accordingly, the benefits were given to the employees similarlyplaced that of the petitioners herein. 4.The learned counsel for the respondents vehementlycontended that the matter is sub judice before the Hon'ble SupremeCourt and that the issue is left open for the decision and if anorder that may be passed which shall be subject to the outcome ofthe issue pending before the Hon'ble Supreme Court. 5.I have considered the rival contentions. 6.It is a well settled law that the subordinate legislationshall not exceed the substantive provisions of the Act. If itexceeds the substantive provision, it shall be considered as ultravires. The Bombay High Court has rightly decided the issue and ithas become final. In view of the same, a direction is issued to therespondents to consider the request of the petitioner for refund ofeligible amount under Section 10(10C) of the Income Tax Act, 1961,within a period of two months from the date of receipt of a copy ofthis order. However, this order will be subject to the outcome ofthe issue pending before the Hon'ble Supreme Court. 7.With this observation, the writ petition is disposed of.No costs. Sd/-Assistant Registrar (CS-III) To 1. The Assistant Commissioner of Income Tax, Circle II, Madurai. 2. The Income Tax Officer, Ward I (1), Karaikudi. + 1 CC TO Mr.P.ARUN JAYATRAM, ADVOCATE IN SR No. 70188+ 1 CC TO Mrs.S.SRIMATHY, ADVOCATE IN SR No. 70181 SMS https://hcservices.ecourts.gov.in/hcservices/