TMI Blog2016 (6) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... of legislation. The Act specifically provides for granting exemption u/s. 10(10C) of the Act to the extent of ₹ 5 lacs and applying the ‘purposive test’ of those provisions, we hold that the assessee should be given the benefit of exemption u/s. 10(10C) of the Act to the extent of ₹ 5 lacs. Hence, non-consideration of the judgment of Hon’ble Calcutta High Court in SAIL DSP VR. EMPLOYEES ASSOCIATION 1998 Vs. UNION OF INDIA & OTHERS (2003 (2) TMI 46 - CALCUTTA High Court ) and the Third Member decision of this Tribunal by the Ld. CIT(A) and also by the Ld. AO automatically results in mistake apparent on record, which ought to have been rectified u/s. 154 of the Act by the Ld. AO and the Ld. CIT(A). Hence, we have no hesitation in allowing the ground raised by the assessee. The aforesaid decision will apply in all the other appeals of the assessee.- Decided in favour of assessee - I.T.A No.2340, 2341, 2342, 2343, 2344, 2345, 2346, 2347, 2348, 2349, 2350/Kol/2013, - - - Dated:- 1-6-2016 - Shri N. V. Vasudevan, JM Shri M. Balaganesh, AM For The Appellant : Shri B.K. Ghosh, Pijush Dey M.K. Banerjee, FCA For The Respondent : Shri Sallong Yaden, Addl. CIT, Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is not entitled to exemption u/s. 10(10C) of the Act. The assessee did not prefer any appeal against this assessment order. She instead chose to prefer rectification petition u/s. 154 of the Act on 09.03.2010 pointing out the mistake apparent on record. The Ld. AO disposed of the said rectification petition on 29.09.2010 by observing as under: In his submission the A/R of the assessee requested to grant exemption u/s. 10(10C) which was rejected by the AO in the assessment made u/s. 143(3) of the I. T. Act and pleaded to rectify the order u/s. 154 of the I. T. Act. The jurisdiction of section 154 is confined to the rectification of mistake apparent from the records and it does not envisage the rectification of error of judgment. In this case the assessee in his rectification u/s. 154 claimed to grant exemption u/s. 10(10C) which was denied by the AO in his order u/s. 143(3). The purview of section 154 is restricted to the issues which was not considered and decided in the orders passed by the AO. Thus the rectification petition filed by the assessee on the issues already decided by the AO in his order u/s. 143(3) is outside the scope of section 154 of the I. T. Act. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 5,00,000/- is admissible from any amount received or receivable by the employee under a scheme of Voluntary Retirement framed by the employer. However, in accordance with the first proviso to section 10(10C) the exemption as mentioned aforesaid is allowable if the scheme is framed in accordance with the requirements as prescribed under Rule 2BA. One of the requirements of the Rule 2BA is as under: the amount receivable on account of voluntary retirement (or voluntary separation) of the employee does not exceed the amount equivalent to (three months) salary for each completed year of service or salary at the time of retirement multiplied by the balance months of service left before the date of his retirement on superannuation. The AO has given clear cut finding in the order passed u/s.143(3) that the above requirement prescribed under the Rule 2BA has not been fulfilled in this case. Either during the proceedings u/s. 154 or the appellate proceedings, this finding of the Assessing Officer could not be controverted by the appellant. The issue raised by the assessee in this ground is debatable and it is outside the scope of section 154 of the Act. Since the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s guidance in the matter. What is held by the Tribunal in this Third Member decision is at the minimum a possible view of the matter, and so far as this Division Bench is concerned a binding judicial precedent. iii) We find that as held by Hon'ble Calcutta High Court in the case of SAIL DSP VR Employees' Association (supra), undoubtedly Their Lordships held that there is no conflict between the VRS Scheme of the SAIL employee and Rule 2BA, but Their Lordships also observed as follows :- An expression used in the statute is not always to be interpreted literally or grammatically. Sometimes, it has to be interpreted having regard to the context in which the expression is used and having regard to the object and purpose for which the same is enacted. Section 10(10C) was inserted in order to make voluntary retirement attractive so as to reduce human complements for securing economic viability of certain companies. This object was elaborated by various Departmental circulars and explanatory statements issued from time to time. Similarly, r. 2BA which was inserted by the IT (Sixteenth Amendment) Rules, 1992, were amended from time to time. All these go to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EMPLOYEES ASSOCIATION 1998 Vs. UNION OF INDIA OTHERS (2003) 262 ITR 638 (Cal) and Hon ble Supreme Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. 305 ITR 227 (SC) and argued that nonconsideration of jurisdictional High Court and Tribunal s decision is a mistake apparent from record and accordingly, prayed for granting relief of exemption u/s. 10(10C) of the Act for the assessee. In response to this, the Ld. DR argued that voluntary retirement services compensation offered by the HSBC was not in conformity with Rule 2BA of the I. T. Rules, 1962 and hence, relied on the orders of the lower authorities. 7. We have heard rival submissions and perused the material available on record and the case laws cited above. The facts stated hereinabove remained undisputed and hence, the same are not reiterated for the sake of brevity. We find that the Hon ble Calcutta High court in the case of SAIL DSP VR. EMPLOYEES ASSOCIATION , supra had held as under: Section 10(10C) : Exemption : Availability and extent of : Section 10(10C) uses the expression any amount received by an employee . . . at the time of his voluntary retirement in accordance with any scheme or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of employment, which is the amount intended in section 10(10C), inasmuch as, on the date an employee opts for voluntary retirement, he is already entitled to the accumulation of the provident fund in his account governed by the Provident Funds Act and the scheme, gratuity payable under the Payment of Gratuity Act, encashment of leave pay under the leave rules and pension payable under the pension rules, if there be any. These are all terminal benefits to which an employee is entitled even without the scheme. This entitlement cannot be taken away under any scheme. Therefore, if these amounts are also payable under the scheme, the same would not be a component of the compensation for voluntary retirement and is not an amount receivable on account of voluntary retirement. Therefore, the terminal benefits cannot be brought within the scope and ambit of the expression amount received used in section 10(10C). Such question is to be dealt with having regard to the context in which the expression is used and having regard to the purpose and object and its grammatical and literal meaning. As discussed above, we do not find any difficulty in construing the meaning of the expression ..... X X X X Extracts X X X X X X X X Extracts X X X X
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