TMI Blog2020 (2) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... my view, interpret the provision and its application in a purposive manner bearing in mind the spirit and object for which it has been enacted. It is clear that the object of such a reward is by way of recognition by the State of an individual s efforts in protecting public interest and serving society in a significant manner. Thus, in my considered view, the reference to approval in Section 10(17A) does not only connote a paper conveying approval and bearing the stamp and seal of the Central Government but any material available in public domain indicating recognition for such services, rendered in public interest. The petitioner has been recognized by the Central Government on several occasions for meritorious and distinguished services and from the information available in public domain, it is seen that he was awarded the Jammu Kashmir Medal, Counter Insurgency Medal, Police Medal for Meritorius Service (1993) and the President s Police Medal for Distinguished Service (1999). Specifically for his role in nabbing Veerapan, he was awarded the President s Police Medal for Gallantry on the eve of Independence Day, 2005. What more! If this does not constitute recognition b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes. 2. Specifically G.O.Ms.368, Housing and Urban Development dated 29.10.2004 had been issued allotting a HIG Plot bearing No.1A-642 at Thiruvanmiyur Scheme to the petitioner. Accepting the representation of the petitioner dated 21.07.2008, G.O.Ms.No.763 Housing and Urban Development Department dated 21.07.2008 had been issued allotting Plot No.1 adjacent to Andaman Guest House at Anna Nagar West Extension in lieu of the plot issued earlier. 3. A registered deed of sale had been executed on 27.11.2009 whereby the Tamil Nadu Housing Board conveyed to the petitioners favour land measuring 2 grounds and 8 sq.ft. of land in consideration of ₹ 1,08.43,000/- paid by the Government of Tamil Nadu on his behalf to the Tamil Nadu Housing board. 4. A return of income had come to be filed by the petitioner in terms of the Income Tax Act, 1961, wherein the petitioner had initially returned a total income of ₹ 18,38,791/- for Assessment Year (AY) 2010-11. The return was revised thereafter to include short term capital gain of a sum of ₹ 82,00,400/- arising from the sale of the plot allotted to him on 15.12.2009 for a sum of ₹ 1,99,10,900/-. The petitioner, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was not a gift from the Government of Tamilnadu. Only the cash money which was paid for the purchase of the land was only the reward and not the land. Hence the assessee has correctly computed the capital gain by taking the cost of purchase of ₹ 1,08,43,000/- and the stamp duty of ₹ 9,08,000/- as cost of acquisition for the computation of Long Term Capital Gain. The above facts have been fully disclosed during the course of the assessment and according the order under Section 143(3) was passed. We request you to kindly do the needful and oblige.' 8. Though the provisions of Section 10(17A) do not appear to have been specifically adverted to in the proceedings for assessment, letter filed by the petitioner before the Income Tax Officer, dated 26.05.2016, does refer to and rely upon this provision. In any event, and despite the objections raised by the petitioner, the proposal was confirmed by the respondent and at paragraph 8 of the impugned order, the Assessing Authority was directed to allow the claim of exemption under Section 10(17A) only if the assessee were able to produce an order granting approval of exemption by the Government of India under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted) as may be specified in the order granting the approval; (17B) any payment made, whether in cash or in kind, as a reward by the Central Government or any State Government for such purposes as may be approved by the Central Government in this behalf in the public interest; (18) any payment made, whether in cash or in kind, by the Central Government or any State Government in pursuance of gallantry awards instituted or approved by the Central Government. 13. Erstwhile Clause (17A) contained a proviso that stated that the effective date from which the approval was granted was to be specified in the order of the Central Government granting such approval. The proviso has been omitted in the substituted provision, effective 01.04.1989 onwards. Thus, it appears to me that while enlarging the clauses generally, by obviating specific reference to the purposes for which the awards could be given, legislature has also done away with the specification of a written approval from the Central Government, with effect from 01.04.1989. 14. One may make useful reference in this regard, to a decision of a Division Bench of this Court in the case of Commissioner of Income Tax V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme was extremely successful, with the result that large unforeseen revenue flooded into the exchequer. At the same time, it cannot be forgotten that the income-tax wing of the Ministry had to work very hard with the already existing heavy load carried on. In some quarters of the Department, the staff had to work round the clock particularly at the closure of the period declared in the Ordinance. Appreciating this hard work and the extra output the Income-tax Department had shouldered, the Ministry came forward that the special output turned out by the staff would not go unnoticed. Therefore, the Government volunteered to pay the hard work turned out by the staff by means of a token cash benefit equal to one month's basic pay. Presumably on account of the emergency no overtime allowance could be sanctioned. It might perhaps involve a larger expenditure. To quote the Ministry of Finance letter F. No. 1-11015/1/76 Ad. IX, dated January 16, 1976, the first paragraph itself explains the circumstances under which it is granted, 'I am directed to state that in appreciation of the meritorious work done by the income-tax personnel for the success of the voluntary disclosure scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the decision of the Patna High Court (supra) also negates the claim on a strict interpretation of Section 10(17B) on the ground that approval had not been accorded by the Central Government. The order reads as follows: 1. This is a reference under s . 256(1) of the IT Act, 1961, at the instance of the Revenue, seeking the opinion of the High Court on the following question : Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the cash award of ₹ 920 is exempt from taxation under s . 10(17B) ? 2. The reward to the assessee, who was an ITO at the relevant time, had been given by the Central Government directly in connection with the Voluntary Disclosure Scheme. A separate approval of the Central Government for the purpose of exemption under s . 10(17B) of the Act was not given. That being the position, cl. (17B) of s . 10 of the Act was not attracted and the reward was not liable to be excluded from the computation of the income. So is the view taken in CIT vs. S. N. Singh, ITO (1991) 192 ITR 306 (Pat) : TC 32R.650. 3. For the foregoing reasons, the question is answered in the negative, i.e., in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hy. The Governments have to consider and balance the choice between maintenance of law and order and anarchy. It does not appear that anyone considered this aspect. It yielded to the pressure tactics of those who according to the Government are out to terrorise the Police force and to overawe the elected Governments. It does not appear that anyone considered that with their action people may lose faith in the democratic process, when they see public authority flouted and the helplessness of the Government. The aspect of paralysing and discrediting the democratic authority had to be taken into consideration. It is the executive function to decide in public interest to withdraw from prosecution as claimed. But it is also for the Government to maintain its existence. The self-preservation is the most pervasive aspect of sovereignty. To preserve its independence and territories is the highest duty of every nation and to attain these ends nearly all other considerations are to be subordinated. Of course, it is for the State to consider these aspects and take a conscious decision. In the present case, without withdraw consideration of these aspects the decision was taken to the TADA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in public interest. 25. The petitioner has been recognized by the Central Government on several occasions for meritorious and distinguished services and from the information available in public domain, it is seen that he was awarded the Jammu Kashmir Medal, Counter Insurgency Medal, Police Medal for Meritorius Service (1993) and the President s Police Medal for Distinguished Service (1999). Specifically for his role in nabbing Veerapan, he was awarded the President s Police Medal for Gallantry on the eve of Independence Day, 2005. What more! If this does not constitute recognition by the Centre of service in public interest, for the same purposes for which the State Government has rewarded him, I fail to understand what is. The reward under Section 10(17A)(ii) is specific to certain 'purposes' as may be approved by the Central Government in public interest and the 'purpose' of the reward by the State Government has been echoed and reiterated by the Centre with the presentation of the Gallantry Award to the petitioner in 2005. This aspect of the matter is also validated by the Supreme Court in Abdul Karim (supra) as can be seen from the judgment extrac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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