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2021 (1) TMI 414 - HC - Income TaxEntitled to claim deduction u/s 10 (10 C) (viii) and also under Section 89 (1) - amounts received as part of VRS - appellant admittedly took voluntary retirement in the year 2001 - claim came to be rejected on the basis of the instructions/letter issued by the Central Board of Direct Taxes on 23-04-2001 - HELD THAT:- It is not disputed before us that the said instructions/letter of the Central Board of Direct Taxes has been quashed by this Court in State Bank of India [2005 (12) TMI 64 - KERALA HIGH COURT]. Still further this Court has, in the said decision, categorically declared that amounts received by an employee under a VRS Scheme were entitled to deduction under Section 10 (10C) (viii) and relief under Section 89 (1) of the Income Tax Act, simultaneously. That being the position the entire proceedings initiated against the petitioner becomes one without jurisdiction. Therefore, when the proceedings are found to be without jurisdiction the existence of an alternative remedy is not a bar for granting relief under Article 226 of the Constitution of India. It becomes our duty to grant relief when we are convinced that the proceedings are without jurisdiction. We accordingly set aside the judgment of the learned Single Judge. Applying the principle in Calcutta Discount Company (supra), we quash Exts.P1, P4 & P6 and hold that the appellant was entitled to claim deduction under Section 10 (10C) (viii) of the Income Tax Act and relief under Section 89 (1) (as the provision stood at the relevant point of time) in respect of amounts received by him under the voluntary retirement scheme. We direct that if any amounts have been paid by the appellant pursuant to demands which arose on account of denial of deduction under Section 10 (10C) (viii) and relief under Section 89 (1) of the Income Tax Act, such amounts shall be refunded to the appellant .
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