Civil Appeal No. 6997-7002 of2009 · Madras High Court
Case at a glance
- Bench
- F M IBRAHIM KALIFULLA
Outcome
Set aside
The impugned order is set aside andthe second question of law is answered in favour of the assessee
Provisions considered
- Income Tax Act, 1961 s. 10(10C)
Key paragraphs
- Para 22. We need not examine the first question of law inasmuch as the second question of law which has been raised on merits, deserves acceptance. In this context, it is worthwhile to refer the Communication of the Government of India addressed to all ChiefCommissioners of…
Judgment
IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 13.07.2010CORAM:THE HONOURABLE Mr. JUSTICE F.M.IBRAHIM KALIFULLAandTHE HONOURABLE Mr. JUSTICE M.M.SUNDRESHTAX CASE (APPEAL) No.532 OF 2010and M.P.No.1 of 2010V.Natesan..Appellant./versus/The Asst. Commissioner of Income Tax, Circle-I,Tambaram, Chennai – 600 045...Respondent. Tax Case (Appeal) filed under Section 260-A of the Income TaxAct, 1961, against the order passed by the Income Tax AppellateTribunal, Madras "C" Bench, dated 13.6.2008 in ITA No.2401/Mds/07Assessment Year 2004-2005. ( ITA No.262/06-07 dated 3.9.2007 on the file of the Commissioner of Income Tax (Appeals) IX, Chennai againstG1/PA No.AAAPN2241F dated 9.3.2006 on the file of the AssistantCommissioner of Income Tax, Circle-I, Tambaram)For appellant : Mr.S.VaidyanathanFor respondent: Mr.J.Nareshkumar. Senior Standing Counsel for Income Tax Department. (JUDGMENT OF THE COURT WAS DELIVERED BY F.M.IBRAHIM KALIFULLA,J.)The Assessee has come forward with this appeal in which the following substantial questions of law have been raised:-"(1) Whether on the facts and circumstances of the case, the Tribunal was right in allowing the Appeal of the Revenue when the tax effect is less than Rs.2 lakhs and when the revenue is governed by two notifications of CBDT InstructionNo.2, dated 24.10.2005 and Instruction No.5 dated16.7.2007? https://hcservices.ecourts.gov.in/hcservices/ (2) Whether on merits of the case, the order of the Tribunal was right and justified u/s. 10(10C) of IT Act when the assessee is under public sector?"
We need not examine the first question of law inasmuch as the second question of law which has been raised on merits, deserves acceptance. In this context, it is worthwhile to refer the Communication of the Government of India addressed to all ChiefCommissioners of Income Tax, All Directors General of Income Tax and Director General (Legal & Research), dated 8.5.2009, which reads asunder: "Subject: Taxability of ex-gratia amount received by Reserve Bank of India's Employeesunder Optional Early Retirement Scheme (OERS)during Assessment Year 2004-05 – reg. Sir/Madam, Central Board of Direct Taxes vide its letter F.No.225/74/2005-ITA-II dated 20.10.2005relying on a letter from Reserve Bank of India(RBI), had advised all field formations that the Optional Early Retirement Scheme (OERS) of RBIdoes not conform with the provisions of Rule 2BAof Income Tax Rules, 1962. Accordingly, the amount received by the employees of RBI opting for OERS did not qualify for exemption under Section 10(10C) of Income Tax Act, 1961.2.It has now been brought to this notice of Board that the Hon'ble High Court of Bombay vieits order dated 4th July, 2008 in the case of Commissioner of Income Tax Vs. KoociathilKallyatan Ambujakshan (2008) 219 CTR (Bom) 80 hasheld that Optional Early Retirement Scheme of RBIsatisfies all the conditions of Rule 2BA and amounts received by retiring employees thereunderwere eligible for exemption u/s. 10(10C). Thatjudgment has become final.
The matter has therefore been reviewed in the Board in view of the aforesaid order of Hon'ble High Court of Bombay and it has been decided that the employees of RBI who acceptedOERS would be entitled for the benefit of Section10(10C) of Income Tax Act, 1961." https://hcservices.ecourts.gov.in/hcservices/
Operative part
3. In fact, in respect of another employee of Reserve Bankof India, who had gone on Voluntary Retirement under the Scheme, this Court on 25.11.2009 passed orders in T.C.No.1101 of 2008, by applying the decision of the Supreme Court in Civil Appeal Nos.6997-7002 of2009 arising out of SLP (C) No.15805-15810 of 2008, granted relief in favour of the assessee. As the case of the appellant is squarely covered by the above referred to decision of the Supreme court aswell as the decision of the Division Bench of this Court, dated25.11.2009 and also having regard to the communication of the Government of India, making it clear the employees of Reserve Bank of India who accepted Optional Early Retirement Scheme, are entitled for the benefit of Section 10(10C) of the Income Tax Act, 1961, the TaxCase (Appeal) stands allowed. The impugned order is set aside and the second question of law is answered in favour of the assessee. Nocosts. Consequently, connected miscellaneous petition is closed. Sd/-Asst. Registrar//true copy//Sub Asst. Registrarsai To1.The Assistant Registrar, Income Tax Appellate Tribunal, Rajaji Bhavan, III Floor, Besant Nagar, Chennai-90.2.The Commissioner of Income Tax (Appeals) IX, Chennai. 3. The Asst. Commissioner of Income Tax, Circle-I, Tambaram, Chennai – 600 045.1 cc to Mr.S.Vaidyanathan, Advocate, Sr.No.502201 cc to Mr.J.Nareshkumar, Advocate, Sr.No.50386T.C.(A) 532 OF 2010JRG {CO}TP/30.7.2010.
Questions this judgment answers
What did the Court decide in this case?
The Court recorded the following disposition: The impugned order is set aside andthe second question of law is answered in favour of the assessee
Which statutory provisions did this judgment involve?
Income Tax Act, 1961 — s. 10(10C).
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.