TMI Blog2018 (3) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... of services or part thereof in excess of six months This aspect of the matter has not been examined at all. Therefore, uphold the claim in principle but remit the matter to the file of the AO for examination of the quantification part in the light of the above observation. - ITA No. 1473/Ahd/2014 - - - Dated:- 1-3-2018 - SHRI RAJPAL YADAV, JUDICIAL MEMBER And SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER Assessee by : Shri Parin Shah, AR Revenue by : Shri Albinus Tirkey, Sr DR ORDER Per Rajpal Yadav, Judicial Member The assessee is in appeal before the Tribunal against the order of the ld. CIT(A)-VI, Baroda dated 03.02.2014 passed for Assessment Year 2008-09. 2. The assessee has taken four grounds of appeal. In Ground No.1, the assessee has challenged the reopening of assessment by issuance of notice under Section 147/148 of the Act. The learned Counsel for the assessee has not pressed this ground of appeal; hence, it is rejected. 3. In Ground No.3, the assessee has challenged initiation of penalty under Section 271(1)(c) of the Act. To our mind, it is premature at this stage; hence, not maintainable. Therefore, the same is also rejected. 4. In Ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and gone through the record carefully. We find that the Tribunal has considered an identical issue in the case of Vishnu Mohan T. Nair Vs. ITO (ITA No.1472/Ahd/2014), wherein the assessee was also working with ACNielsen ORG Marg Pvt. Ltd. and he was transferred from Baroda to Mumbai vide order dated 21.07.2003. He went to the Industrial Tribunal and the dispute ultimately travelled upto the Hon ble Gujarat High Court and as per the settlement between the assessee and employer, a sum of ₹ 6,50,000/- was paid to the employee. He applied for resignation and that resignation was accepted. In this background, the Tribunal recorded the following findings:- 6. The assessee is not satisfied and is in further appeal before us. 7. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 8. The fundamental issue that we have to take a call on is whether or not the amount in question received by the assessee is eligible for exemption under section 10(10B). As we explore this aspect of the matter, we find that section 10 (10B) of the Income Tax Act 1961 defines the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground of continued ill-health 9. Quite clearly, the expression retrenchment covers termination of service by the employer for any reason whatsoever except (i) as a punishment inflicted by disciplinary action in accordance with the law and (ii) covered by the negative list appended to the definition of retrenchment . It is not, it cannot be, the case of the revenue that the termination of service is covered by these two clauses. As a matter of fact, case of the revenue is that there is no termination at all as it is a resignation by the employee which has been accepted by the employer and the reliance is placed on the documentation in settlement documents. Such a plea is only fit to be noted and rejected. Here is a settlement and for a consideration that the assessee has quit employment, and the assessee s leaving the employment is dependent upon the payment being made by the employer. Resignation is a voluntary and unilateral act; there cannot be a resignation by the employee on payment of a compensation by the employer. Wordings of the arrangements apart, such an arrangement is de facto as also in the eyes of law an arrangement for termination of employment on pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d [(1985) 152 ITR 68 (SC)] wherein compensation in lieu of reinstatement was treated as eligible for retrenchment compensation under section 10(10B). To us, the takeaway from this judgment seems to be that it is not the form but the substance that matters so far definition of retrenchment compensation is concerned. Right now we are dealing with an employee who is giving up his source of livelihood under the threat of dislocation, and the hyper technical interpretations based on technicalities about the wordings in the settlement deed, signed by him under these compelling circumstances, is being taken as the understanding about assessee s actual conduct; that is too pedantic an approach and it cannot meet our approval. Let us also not forget that while taking calls on these issues, which deal with employees in the lower rung of hierarchy, we must not be too pedantic or hyper technical in approach. We have to be pragmatic in approach and we must give full effect to the true intent of the public welfare provisions. To us, the arrangement in question is nothing but a termination of employment with the offer of compensation. Viewed thus, the payment in question cannot be anything but a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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