TMI Blog2020 (5) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ondone the delay of 88 days Deduction u/s. 10(10C) disallowed - schemes of voluntary retirement of companies or authorities governing the payment of sums - last four conditions mentioned in Rule 2BA of I.T. Rules, 1962, has not been satisfied in this case - HELD THAT:- In the instant case, the assessee has failed to produce certificate from the employer (SBI) stating that the exit option scheme is eligible for benefit of exemption u/s. 10(10C) and is in accordance with the guidelines formulated in Rule 2BA of the I.T. Rules. On the contrary, the certificate issued by the State Bank of India (employer of the assessee) along with the return of income in respect of the above scheme has clearly mentioned that the amount of ex gratia would be added to the total income of the employee for the year and income tax would be recovered at the applicable rate at source. The employer-Bank (SBI) has also deducted tax at source including the ex gratia granted to the employee at the time of retirement. In the certificate also, the retirement scheme is mentioned as exit option scheme and there is no reference regarding fulfilment of conditions prescribed under Rule 2BA of the I.T. Rules, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done the delay of 88 days and proceed to dispose off the appeal on merits. 3. The solitary issue that is raised is whether the CIT(A) is justified in confirming the action of the Assessing Officer in disallowing the claim of deduction u/s. 10(10C) of the I.T. Act. 4. The brief facts of the case are as follows: The assessee is an individual. For the assessment year 2008-09, the return of income was filed on 29/07/2008 declaring total income of ₹ 3,03,310/-. During the previous year relevant to the assessment year 2008-09, the assessee was an employee of the State Bank of India. The assessee had opted for Exit Option Scheme and had retired from service with effect from 30/06/2007. In the return of income filed for the assessment year 2008-09, the assessee had claimed an amount of Rs. five lakhs was not liable to tax u/s. 10(10C) of the I.T. Act. According to the Assessing Officer, as per CBDT Circular No. F.No.200/34/2009-ITA-1 dated 06/10/2009, employees availing exit option scheme are not eligible for exemption u/s. 10(10C) of the I.T. Act. Therefore, the Assessing Officer was of the view that income to the tune of Rs. five lakhs have escaped assessment and issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions prescribed in Rule 2BA of the I.T.Rules 1962 which stipulates the eligibility criteria for exemption u/s 10(10C). 7. During the course of assessment proceedings the assessee failed to furnish any details or the working in respect of relief u/s. 89(1) in the prescribed form. In the absence of any claim by the assessee for relief u/s. 89(1), the assessee is completed with an addition of ₹ 5,00,000/- to the returned income being ineligible exemption claimed u/s. 10(10C) as explained above. 5. Aggrieved by the order of the Assessing Officer in denying deduction u/s. 10(10C) of the I.T. Act, the assessee preferred appeal before the first appellate authority. Before the CIT(A), the assessee raised the issue of re-opening of the assessment and also on merits with regard to allowability of exemption u/s. 10(10C) of the I.T. Act. Both the issues raised by the assessee before the CIT(A) were rejected and the appeal of the assessee was dismissed. As regards the claim of deduction u/s. 10(10C) of the Act, the relevant finding of the CIT(A) reads as follows: 4.3.3. The learned A.R. in the appeal proceedings relied only on certain judicial decisions wherein deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (iii) an authority established under a Central State or Provincial Act; or (iv) a local authority; or (v) a co-operative society; or (vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or (vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institute of Technology Act, 1961 (59 of 1961); or (viia) any State Government; or (viib) the Central Government; or (viic) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazzette, specify in this behalf; or (viii) such institute of management as the Central Government may, by notification in the Official Gazettee, specify in this behalf, at the time of his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i), a scheme of voluntary separation, to the extent such amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orkers and executives of a company or of an authority or of a co-operative society, as the case may be, excepting directors of a company or of a co-operative society.; (iii) the scheme of voluntary retirement or voluntary separation has been drawn to result in overall reduction in the existing strength of the employees; (iv) the vacancy caused by voluntary retirement or voluntary separation is not be filled up; (v) the retiring employee of a company shall not be employed in another company or concern belonging to the same management; (vi) 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 service left before the date of his retirement on superannuation. Provided that requirement of (i) above would not be applicable in case of amount received by an employee of a public sector company under the scheme of voluntary separation framed by such public sector company to the extent such amount does not exceed five lakhs rupees. 7.2 As per the above provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax would be recovered at the applicable rate at source. The employer-Bank (SBI) has also deducted tax at source including the ex gratia granted to the employee at the time of retirement. In the certificate also, the retirement scheme is mentioned as exit option scheme and there is no reference regarding fulfilment of conditions prescribed under Rule 2BA of the I.T. Rules, 1962 which stipulates the criteria for exemption u/s. 10(10C) of the I.T. Act. 7.4 As regards the Hon ble Supreme Court judgment in the case of Chandra Ranganathan and Others vs. CIT (326 ITR 49) relied on by the Ld. AR, I am of the view that the said judgment is not applicable to the facts of the present case. The Hon ble Supreme Court was considering a case with regard to eligibility of benefit of exemption u/s. 10(10C) of the I.T. Act. The assessee in the case considered by the Hon ble Supreme Court had received ex- gratia payment on retirement under the voluntary retirement scheme floated by the Reserve Bank of India (RBI). The Hon ble Supreme Court after referring to the judgment of the Hon ble Bombay High Court in the case of CIT vs. Koodathil Kallyatan Ambujakshan (309 ITR 113) had held that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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