The Commissioner Of Income Tax, Thiruchirappalli-I Appellant v. R.dhanabalan Respondent

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 04.07.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Tax Case (Appeal) No.818 of 2008 The Commissioner of Income Tax,Thiruchirappalli-IAppellant v. R.DhanabalanRespondent Tax Case Appeal under section 260A of the Income Tax Act 1961against the order dated 1.9.2005 in ITA No.1681/Mds/2004 on thefile of the Income Tax Appellate Tribunal, Madras 'C' Bench for theassessment year 2001-02 and against the order of the Commissionerof Income Tax (Appeals) dt.30.3.04 in ITA No.43/2003-04 and againstthe order of the Assistant Commissioner of Income Tax, Thanjavurdt.5.3.03 in PAN/GIR No.D.744 AAGPD 5552Q. For Appellants : Mr.T.Ravikumar, Standing Counsel for IT Department For Respondents : No Appearance JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) The Tax Case Appeal is filed against the order dated 1.9.2005in ITA No.1681/Mds/2004 on the file of the Income Tax AppellateTribunal, Madras 'C' Bench by raising the following substantialquestion of law: "Whether the amount paid to employees under the VoluntaryRetirement Scheme is entitled for deduction?" 2. The assessee was an employee of Indian Bank. The assesseeretired from service under the Voluntary Retirement Scheme andreceived a sum of Rs.5,00,000/- from the employer Bank as ex-gratia, which he claimed exemption as per Section 10(10-C) of theIncome-tax Act. Balance ex-gratia was admitted as income. However, https://hcservices.ecourts.gov.in/hcservices/ while working out the tax payable on such income, the assesseeclaimed relief under Section 89(1). The assessing officerdisallowed the claim of the assessee for the relief under Section89(1) of the Act on the ground the the assessee had availed theexemption of Rs.5,00,000/- under Section 10(10-C) of the Act.Aggrieved by the same, an appeal is preferred by the assesseebefore the Commissioner of Income-tax (Appeals), who allowed theappeal by relying on the judgments of this Court reported in 245ITR 826 and 206 ITR 531. Aggrieved by the same, the revenuepreferred appeal before the Income-tax Appellate tribunal, whichdismissed the appeal preferred by the revenue following thedecision reported in 273 ITR 307 in the case of CIT Vs.G.V.Venugopal. The correctness of the said order is canvassed bythe appellant in this present appeal. 3. Learned counsel appearing for the revenue submits that theissue involved in this appeal is covered by a decision of thisCourt in the case of COMMISSIONER OF INCOME-TAX V.S G.V.VENUGOPALreported in (2005) 273 ITR 307. 4. This Court in the case of COMMISSIONER OF INCOME-TAX V.SG.V.VENUGOPAL reported in (2005) 273 ITR 307 while dismissing theappeal, held as follows: "....the second proviso to section 10(10C) onlyrefers to exemption claimed in any other year. Everyassessment year is a self-contained unit and the merefact that the relief under section 89 had been spreadover several years, did not mean that the relief was notin respect of a particular assessment year. There was noprohibition to the twin benefits in respect of theamount received under the voluntary retirement scheme.The relief contemplated under section 89(1) is aimed tomitigate hardship that may be caused on account of thehigh incidence of tax due to progressive increase in taxrates. Payment under the voluntary retirement scheme iscovered by the word "salary" which has been given avery wide definition in section 17. Since the assesseewas covered by section 89, he would get both thebenefits..."5. Therefore, following the above said judgment, this appealis dismissed as the question of law now raised is already decidedagainst the revenue. Sd/-Deputy Registrar. /true copy/ Sub Asst. Registrar. To 1.The Income Tax Appellate Tribunal, Madras 'C' Bench, Madras. Madras 'C' Bench, Madras. Sd/-Deputy Registrar. /true copy/ Sub Asst. Registrar. To 1.The Income Tax Appellate Tribunal, Madras 'C' Bench, Madras. Madras 'C' Bench, Madras. 2.The Assistant Registrar, Income Tax Appellate Tribunal, Bench 'B' Rajaji Bhavan, 3[rd] Floor, Besent Nagar, Madras. 3. The Secretary, Central Board of Direct Taxes, New Delhi. 4.The Commissioner of Income Tax (Appeals) No.4, Williams Road, Contoment, Tiruchirappalli-1. 5.The Assistant Commissioner of Income Tax, Circle-1, Thanjavur.+ 1 CC To Mr.N.Muralikumaran, Advocate SR NO.35006T C (A).818 of 2008SSN {CO}TP/22.7.08