9911796707
TMI Blog2014 (4) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Commissioner of Income Tax (A) should be quashed. 2. The Commissioner of Income-tax(Appeals) erred in confirming the order of the Assessing Officer by holding out that the employer need to state that VRS scheme framed is in compliance to Rule 2BA of the Income Tax Act 1962. In view of the clause by clause compliance submitted by the assessee, on merits, the order of the Commissioner of Income Tax (A) should be quashed. 3. The Commissioner of Income-tax(Appeals) erred in confirming the order of the Assessing Officer by holding out that the scheme is applicable only to certain class of employees and the policy about vacancies caused is not mentioned in the VRS Scheme and hence it is not complying Rule 2BA r.w.s. 10(10C) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acs. AO found that out of the said compensation the assessee had claimed exemption u/s.10(10C) of the Act of Rs. 5 lacs. AO asked the assessee as to why the exemption claimed by him should not be disallowed.After considering the submission of the assessee dated 01.03.2013 AO held that New India Cooperative Bank Ltd. i.e. the employer-bank had not complied with the provisions of Rule 2BA of the Income-Tax Rules 1962(Rules), that employees of the said bank were not entitled for exempti -on claimed by them u/s.10(10C) of the Act, that the bank had deducted tax at source on the entire payment made to its employees,that claim made by the assessee was not as per the provisions of law. 2.2 Assessee preferred an appeal before the First Appellate A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the material before us.We find that the assessee was an employee of New India Co-operative Bank Ltd. and had opted for voluntary retirement,that on his voluntary retirement he received a sum of Rs.6.01 lakhs,that claim made him was rejected by the AO and the FAA.We find that FAA has decided the issue on the basis of the facts that were totally irrelevant.Downsizing of staff cannot be the purpose of any VRS. Here,we would like to refer to the judgment of the Hon'ble Calcutta High Court delivered in the case of Sail DSP VR Employees Association 1998 wherein it has been held that Section 10(10C) was inserted in order to make VRS attractive,so as to reduce human complements for securing economic viability of certain companies,that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the year under consideration, exemption of Rs 5 lakhs was claimed by them u/s.10(10C) of the Income-tax Act, 1961. In the assessments completed u/s.143(3), the AO allowed the exemption claimed by the assessee u/s.10(10C) in view of the decision of Hon'ble Bombay High Court in WP No.1051 of 2010 in the case of Ravikant G. Seth vs. CIT rendered vide order dated 23.08.2010. By the said order, CIT-2, Thane was directed by the Hon'ble Bombay High Court to consider whether the petitioner was entitled to exemption u/s.10(10C) of the Act and the Rules made under the Income-tax Rules, 1962. As per the direction of Hon'ble Bombay High Court, the Ld. CIT-2, Thane passed an order u/s.264 allowing the claim of the assessee namely Shri Rav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rs.5 lakhs granted to the assessees u/s.10(10C) of the Act as the requirement of Rule 2BA of IT Rules was not satisfied. Aggrieved by the orders of the Ld. CIT passed u/s.263 setting aside and revising the orders of the AO, the assessees have preferred these appeals before the Tribunal. 4.We have heard the arguments of both the sides and also perused the relevant material on record. Although the Ld. DR has strongly relied on the impugned orders of the Ld. CIT passed u/s.263 in support of the revenue's cases, it is observed that in paragraph no.5 of the said orders, the Ld. CIT himself has stated that nothing has been decided by the Hon'ble Bombay High Court in the case of SBI Exit Optees (supra) as to the admissibility of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.10(10C) in favour of the assessee clearly shows that the view taken by the AO while allowing the claim of the assessee for exemption u/s.10(10C) in the assessments framed u/s.143(3) was a possible view and the Ld. CIT, in our opinion, was not justified in treating the said assessments as erroneous and prejudicial to the interest of revenue relying on the decision of Hon'ble Bombay High Court in the case of SBI Exit Optees (supra) wherein no decision was rendered as to the admissibility of the claim of the petitioners on merit as agreed by the Ld. CIT himself in his impugned order passed u/s.263.We, therefore, set aside the impugned orders passed u/s.263 and restore the orders passed by the AO u/s.143(3)." Considering the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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