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2019 (11) TMI 1143 - HC - Income TaxExemption u/s 10 (10AA) - leave encashment drawn retirement - HELD THAT:- Merely because Public Sector Undertaking and Nationalised Banks are considered as ‘State’ under Article 12 of the Constitution of India for the purpose of entrainment of proceedings under Article 226 of the Constitution and for enforcement of fundamental right under the Constitution, it does not follow that the employees of such Public Sector Undertaking, Nationalised Banks or other institutions which are classified as ‘State’ assume the status of Central Government and State Government employees. It has been held in multiple decisions that employees of Public Sector Undertakings are not at par with government servants (Ref: Officers & Supervisors of I.D.P.L. v Chairman & M.D. I.D.P.L [2003 (7) TMI 733 - SUPREME COURT]. In the noted case of A.K.Bindal v Union of India [ 2003 (4) TMI 406 - SUPREME COURT ] while considering the issue of revision of the pay scales of employees of government companies/PSUs at par with government employees, it was held that the employees of government companies cannot claim the same legal rights as government employees. We therefore, reject the present petition, insofar as the petitioners’ challenge to the provisions of Section 10 (10AA) is concerned. We are however of the, prima facie, view that the grievances of the petitioner with regard to exemption limit under Clause (ii) of Section 10 (10AA) not being raised since 1998, appears to be justified. This is so because over the decades, the pay-scales admissible to government servants, and even employees of the Public Sector Undertaking and Nationalised Banks and all others have been upwardly revised, keeping in view, the financial growth in the country as well as on account of rising inflation. The last drawn salaries have increased manifold since time and notification issued under Clause (ii) of Section 10 (10AA) was lastly issued, as taken note of hereinabove, on 31.05.2002. We therefore, issue notice to the respondents limited to this aspect.
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