1999 (9) TMI 29

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..... concerned workman was to be paid certain amount as compensation ; the compensation was to be calculated in accordance with any of the three alternative modes, at the option of the concerned workman, as provided under clause 3 of the Scheme. It is significant to note that in each of the modes for calculation of compensation, it was clearly and expressly stated that the income-tax payable, if any, will be deducted at source as required under the Income-tax Act/ Rules currently in force. Four workmen, out of whom three are respondent No. 2 in each of these three writ petitions, opted for voluntary retirement in terms of the Scheme. Their request was accepted and they were paid compensation as provided under the scheme. As further provided u .....

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..... even on the merits, I fail to see how the action of the management can be faulted in making deductions at source for payment of income-tax as it was expressly and unequivocally provided in the Scheme. Mr. Ashok Kumar Sinha and Mr. Alok Kumar Sinha made spirited arguments that the compensation payable to a workman under the scheme of voluntary retirement, was not exigible to income-tax and the compensation amount was not covered by the definition of income within the meaning of the Income-tax Act, Mr. Alok Kumar Sinha submitted that the compensation paid to the workman was in lieu of his future salary and on being spread out on accrual basis the compensation amount will not be exigible in income-tax. In support of his submission, he relied .....

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..... compensation to the Income-tax Department. On the basis of Form No. 16, it will be open to each of the concerned workman to make a claim for refund before the Income-tax Officer, Munger, with a copy of the claim application being sent to the Commissioner of Income-tax, Patna. In their application, the concerned workmen will naturally raise all pleas as may be available to them in support of their claim that the amount deducted from compensation was not exigible to tax and will rely upon such decisions of courts as may support their claim. The income-tax authorities are expected to have the claim of the concerned workman duly examined and to pass appropriate orders after affording them an opportunity of hearing. If it is found that the amoun .....

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