TMI Blog2008 (11) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... nd P. Arunachalam vs. CIT (2000) 241 ITR 827(Mad) and the decision given by the Jaipur Bench of the Tribunal wherein it was held that the amount received under the VRS constitutes compensation for 'termination of service' for the purposes of s. 17(3) and that the conditions laid down under s. 89(1) are satisfied and the assessee is entitled to relief on the amount received under the VRS as reduced by exemption under s. l0(10C) of the Act. 3. In the case of CIT vs. J. Visalakshi (l994) 120 CTR (Mad) 248: (1994) 206 ITR 531(Mad), the question under consideration before the Madras High Court was : Whether the ex gratia compensation of ₹ 63,230 received by the assessee consequent on his resignation from the employment is entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsation of ₹ 63,230, received by the assessee consequent on his resignation, is entitled to the relief under s. 89(1) of the Act. 4. The view in the case of J. Visalakshi (supra) has been followed by the Madras High Court in the case of CIT vs. M. Raman (1999) 152 CTR (Mad) 497: (2000) 245 ITR 856(Mad). This is what the Madras High Court said : The assessee has taken voluntary retirement from the service and received an amount of compensation at the time of his voluntary retirement. The question that arises is whether the compensation received by the assessee at the time of voluntary retirement would fall within the provisions of s. 17(3)(i) of the IT Act, 1961, that is, whether it can be regarded as salary and the assessee wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swer for both the questions is in the affirmative, in favour of the assessee and against the Revenue. 6. Mr. R.B. Mathur, counsel for the Revenue, submitted that the decision of the Madras High Court in the case of M. Raman (supra) has been challenged by the Revenue by filing Special Leave Petition before the Supreme Court. In this connection, he referred to a Departmental circular which is mentioned at p. 1396 of Chaturvedi P.K. Saharia's Income-tax Laws (5th Edition) Suppl. Vol. 3. He would submit that the view of Madras High Court has, thus, not attained finality. 7. The issue that has been raised in the present appeal came up for consideration before us directly in the case of CIT vs. T.K. Paliwal (IT Appeal No. 141 of 2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the assessee and allowed him the relief under s. 89. The Revenue felt aggrieved by the decision of the CIT(A) and filed an appeal before the Income-tax Appellate Tribunal (for short, 'the Tribunal'). The Tribunal heard the appeal with other connected matters and found no illegality in the order of the CIT(A). It is this order, which is subject-matter of challenge in this appeal. 4. The counsel for the Revenue invited our attention to r. 21A(1)(e) and sub-r. (6) of the IT Rules and contended that the payment received by the assessee on voluntary retirement being covered by cl. (e) and there being specific order by the Board in exercise of the power conferred under sub-r. (6) declining relief under s. 89, the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f exemption provided under s. 10(10C) of the IT Act was considered with the Ministry of Law in view of the judgment in the case of M. Raman (supra) and the Ministry of Law advised filing of SLP and that SLP has been filed before the Supreme Court. 7. We wanted to know from the counsel for the Revenue about the status of the aforesaid SLP which is said to have been filed by the Revenue from the Judgment of Madras High Court in the case of M. Raman (supra). Counsel for the Revenue, however, submits that despite best efforts, he has not been able to get any information in this regard and, therefore, he is not in position to make any statement in this regard. Be that as it may, once it is held that the amount received by the assessee on volu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the time of voluntary retirement would fall within the provisions of s. 17(3)(i) of the IT Act, 1961, that is, whether it can be regarded as salary and the assessee would be entitled to the relief provided under s. 89 of the IT Act, 1961 ? This Court in the case of CIT vs. J. Visalakshi (1994) 120 CTR (Mad) 248: (1994) 206 ITR 531(Mad), held that if an employee receives at the time of resignation, the amount could be regarded as salary and the assessee would be entitled to relief provided under s. 89 of the IT Act, 1961. The said principle rendered by this Court in the case of resignation would equally apply to the case of voluntary retirement of an employee from service. Accordingly, the Tribunal was right in holding that the amount rece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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