TMI Blog2010 (10) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant Reena S. Puri, CIT(DR) for the Respondent ORDER Shamim Yahya: These appeals by the revenue are directed against the common order of the Ld. Commissioner of Income Tax (Appeals) dated 26.11.2008 pertaining to assessment years 2002-03 and 2004-05. 2. The issue raised is that Ld. Commissioner of Income Tax (Appeals) erred in holding that a scheme of Voluntary Retirement was in conformity with Rule 2BA of the IT Rules. 2.1 In this case the Assessing Officer noted that it has come to the knowledge that M/s. Maruti Udyog Ltd. (MUL) had introduced a number of Voluntary Retirement Schemes (VRS) in the financial year 2001-02 and in the other financial year 2003-04. Assessing Officer proceeded to analysis the salient features of the VRS Scheme and concluded as under:- "From the reading of the above provision, it is seen that the basic requirement for availing exemption u/s. 10(10C) is that the Schemes have to be in accordance with the guidelines as prescribed in Rule 2BA of Income Tax Rules. In other words, in order to avail the benefit of Section 10(10C), the Voluntary Retirement Schemes should be framed according to the guidelines as prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Makwana reported in 286 ITR 502 and other decisions of the ITAT namely (1) Vaishali A. Shelar vs. ACIT, Cir-4, Thane [Mumbai] (2008) reported in 113 ITD 0001 (2) Anant Kumar Agarwal vs. ITO (Lucknow TM) (2008) reported in 113 ITD 0001T; it is difficult to subscribe to the view held by the Assessing Officer. The order of the Assessing Officer is contrary to the provisions of the Statue read with Rule 2BA of the Income Tax Rules, 1962. The payments made by the Company under the VRS can; under no stretch of imagination, be treated "as profit in lieu of salary". Respectfully following the Judgement of the Gujrat High Court, it is held that the Scheme floated by the Company in this regard is in conformity with the Rule 2BA and provisions of the Act. The appeal of the assessee is, therefore, allowed. It is claimed by the assessee that wherever any payment is made in excess of Rs.5 lacs and payments made in regard to early bird incentives, the tax has been deducted by the company on such payments and paid to the Govt. The Assessing Officer is directed to verify the quantum of such amount and ascertain whether TDS has been deducted as per the provisions of the relevant Section and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is either taxable or not. The 'good and sufficient reasons' would further show that the belief in this respect has to be based on material on the basis of which the same is formed. This should not merely subsist in the mind of the assessee being based on conjectures and surmises. The expression 'good and sufficient' used together provides for a strict test in this regard. The onus is on the assessee to show that on the facts and in the circumstances of the case, the assessee could not have deducted tax from allowance as contemplated under the provisions of the Act. It was not a case where the assessee had not deducted tax from all the allowances. It was confined to conveyance allowance alone. In this context, whether the particular allowance is taxable or not, would depend on the view adopted by the Assessing Officer, while framing the assessment in the case of the employee at the time of deduction of tax at source. The employer is required to have a broad picture of the estimated income which is to be subjected to tax. The department could not successfully show that the assessee's conduct in not deducting tax at source in the instant case was a mala fide one for which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest is consequential in nature." 3. Against this order the revenue is in appeal before us. 4. It has been urged by the revenue that:- (i) On the facts and circumstances of the case as well as in law, the Ld. C.I.T.(A) has erred in holding that the Scheme of Voluntary retirement was in conformity with Rule 2BA of the IT Rules without appreciating the facts that amount paid/payable on account of voluntary retirement exceeded the amount equivalent to three month's salary for each completed year of service. (ii) On the facts and circumstances of the case as well as in law, the Ld. C.I.T.(A) has erred in holding that the Scheme of Voluntary retirement was in conformity with Rule 2BA of the IT Rules without appreciating the facts that payment of more than 5 lacs per employee has been made to a number of employees. (iii) On the facts and circumstances of the case as well as in law, the Ld. C.I.T.(A) has erred in holding that the Scheme of Voluntary retirement was in conformity with Rule 2BA of the IT rules without appreciating the facts that as per Rule 2BA the Scheme should be applicable to all employees, but in case of assessee deductor, additional benefits ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lent to (i) three months salary for each completed year of service or (ii) salary at the time of retirement multiplied by the balance months of service left before the date of his retirement on superannuation. Only condition of Rule 2BA is that amount receivable should not exceed this limit. It was further held that Rule 2BA does not provide at all that the amount representing the lower of the two limits specified in clause (vi) of rule 2BA; amount upto Rs.5 lacs qualifies for exemption u/s 10(10C). From the above judgement of the Hon'ble court it is evident that payment upto Rs.5 lacs have to be allowed and given the necessary deduction. Assessee had submitted that wherever any payment is made in excess of Rs.5 lacs the payment on excess amount tax has been deducted by such companies and paid to the government. Hence Ld. Commissioner of Income Tax (Appeals) has directed the Assessing Officer to verify the quantum of such amount and ascertain that the TDS has been deducted as per the provision of relevant section and charge interest u/s 201(1A) for any delay or short deduction. We find that Ld. Commissioner of Income Tax (Appeals)'s in his order in this regard is in conformity with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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