In all these appeals, common ground urged by Revenue is directed against order of CIT(A) in granting relief to assessee under s. 89(1) of IT Act, 1961, in addition to benefit allowable under provisions of s. 10(10C)(viii), holding that amount not exceeding Rs. 5 lakhs is eligible for relief under s. 89(1). In all these cases, common facts leading to dispute, as narrated by AO is as under: Assessees are employees of Banks/Public sector undertakings and opted f o r retirement under "Voluntary Retirement Scheme" (VRS for short) as envisaged by employers. Assessees received some compensations described as ex gratia. Assessees claimed exemption of Rs. 5 lakhs out of these amounts under s. 10(10C) and on balance claimed relief under s. 89(1). According to AO, claim of assessees was excessive within meaning of s. 147 of Act, in consonance with Expln. (2)(b)/(2)(c) of s. 147. Notice under s. 148 was issued. Also notices under ss. 143(2) and 142(1) were issued calling for any objections if at all. relevant sections/rules discussed by AO read as under: "Sec. 89 (as amended by Finance Act, 2002 with retrospective effect from 1st April, 1996). "Where assessee is in receipt of sum in nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or payment which under provisions of cl. (3) of s. 17 is profit in lieu of salary, or is in receipt of sum in nature of family pension as defined in Explanation to cl. (4)(iia) of s. 57, being paid in arrears, due to which his total income is assessed at rate higher than that at which it would otherwise have been assessed, AO shall, on application made to him in this behalf, grant such relief as may be prescribed." "Rule 21A(c) states that ... where payment is in nature of compensation received by assessee from his employer or former employer at or in connection with termination of his employment after continuous service for not less than three years and where unexpired portion of his term o f employment is also not less than three years, in accordance with provisions of sub-r. (4)". AO, analysing above provisions, held that exemption under s. 10(10C) though available in case of voluntary retirements, relief under s. 89 is not applicable in case of VRS. He held, compensations received by assessees, who opted for voluntary retirement, had not received anything on account of termination of employment. What they received was due to voluntary act of their own. Termination of service is different from voluntary retirement. Termination is done by employer whereas voluntary retirement is Act of employee. He held, compensations received by persons on retirement scheme opted by them is in fact entirely taxable but for guidelines issued by virtue of s. 10(10C). AO opined that question for consideration is whether second proviso prohibits relief under s. 89 in respect of taxable portion of compensation or ex gratia received in pursuance of voluntary retirement, to which provisions of s. 10(10C) applies. Assessees contended that said proviso does not prohibit relief under s. 89. AO held, as per second proviso, assessee is denied any benefit whatever in respect of taxable portion of compensation. Such denial is two fold first, denial of exemption being availed more than once in life time and second, denial of relief in any form under statute in any other year. Hence, AO held, claim of assessees fall under second category. AO further held, relief under s. 89 is only in respect of salary received in advance or for arrears received. He held, relief is only to moderate impact of taxation if tax rates are different for different years. relief has to be allowed after ascertaining average tax payable for year on total income after including taxable compensation and average of tax payable for three preceding years, after adding to each of years 1/3rd of additional compensation. difference is relief admissible. If taxable portion of compensation or ex gratia is allowed relief under s. 89, assessee is allowed benefit by way of reduced tax on taxable compensation or ex gratia. In support of claim, assessees relied upon decisions of Hon ble Madras High Court in case of CIT vs. J. Visalakshi (1994) 120 CTR (Mad) 248: (1994) 206 ITR 531 (Mad) and in case of CIT vs. M. Raman (1999) 152 C T R (Mad) 497: (2000) 245 ITR 856 (Mad). AO held judgments were relevant for asst. yr. 1982-83 and not for years under consideration. Consequently, AO disallowed claim of assessees for relief under s. 89 in respect of taxable portion of compensation or ex gratia. Aggrieved by above order, assessees approached first appellate authority. Before CIT(A), it was contended, AO failed to appreciate that s. 89 and r. 21A provides for relief even for any payment, which under provisions of cl. (3) of s. 17 is profit in lieu of salary. Assessees contended, relief under cl. (c) of sub-r. (1) or r. 21A applies to all payments received on "termination of employment after continuous service for not less than three years and where unexpired portion of his term of employment is also not less than three years", then relief is available as per calculations provided in sub-r. (4). There is no requirement in s. 89 or in r. 21A that termination of service should be at instance of employer. Assessees contended. Even voluntary retirement is termination. contract with employer is brought to end on acceptance of terms of VRS. It is nothing but termination of contract of employment. Assessees relied upon decisions of Hon ble Madras High Court cited supra. In this case Hon ble High Court held, relief under s. 89 of IT Act, 1961, is admissible in respect of amount received by assessee from employer at time of voluntary retirement. It was further submitted, reasoning of AO is that s. 10(10C) refers to only amount received under VRS and not to any ex gratia or compensation paid. Coming to AO s reliance placed on second proviso to s. 10(10C), which reads as under: "Provided further that where exemption has been allowed to employee under clause for any assessment year, no exemption thereunder shall be allowed to him in relation to any other assessment year." Assessees submitted, word "thereunder" in second proviso refers only to cl. (10C) of s. 10. It does not restrict any other relief or claim that may be legitimately available to assessee. All that s. 89 provides is relief from effect of maximum marginal rate of tax itself, i.e. to say, it provides for relief in rate of tax and taxes amount at average rate, had it otherwise been taxable in earlier years. It does not any way exempt amount totally from tax any way. Assessees also relied upon Board Circular No. 657, dt. 30th Aug., 1993. It reads as under: "Circular No. 657 Finance Act, 1993 Explanatory notes on provision relating to direct taxes. Under provisions of s. 10(10C) of IT Act as these were prior to their substitution by Finance Act, 1993, any payment received by employee of public sector company or any other company at time of voluntary retirement, in accordance with any scheme or schemes of voluntary retirement was exempt from income-tax. Representations had been received on behalf of employees of statutory authorities, etc., that benefit of income-tax exemption under s. 10(10C) should be extended to them. rationale for providing income-tax exemption on amounts received under schemes of voluntary retirement by employees of companies, i.e. making such schemes more attractive so that companies can improve their efficiency, equally applies in case of statutory authorities and local authorities. scope of income-tax exemption under s. 10(10C) has, therefore, been extended to cover thereunder employees of authority established under Central, State or Provincial Act or of local authority. guidelines prescribed by Board specify that amount receivable o n account of voluntary retirement of employee should not exceed five hundred thousand rupees. intention was to restrict benefit of income-tax exemption under s. 10(10C) to aforesaid amount in case of employee. Finance Act incorporates aforesaid intention in law itself by providing that amount exempt under s. 10(10C) shall not exceed five lakh rupees. guidelines prescribed by Board for framing scheme of voluntary retirement further specify that employee should not have availed of t h e benefit of any other voluntary retirement scheme in past. It may be difficult for employers to comply with this requirement where employees do not disclose fact of their having availed of such benefit in past. It has, therefore, been provided that where exemption has been allowed to employee under s. 10(10C) for any assessment year, no exemption shall be allowed to him thereunder in relation to any other assessment year. These amendments take effect from 1st April, 1993, and accordingly apply in relation to asst. yr. 1993-94 and subsequent years." It was contended that guidelines issued by Board for framing scheme of voluntary retirement specified that employee, who opted for voluntary retirement, should not be person who had already availed benefit under VRS once in past. These guidelines were issued because it may be difficult for employer to comply with this requirement, where employees do not disclose fact of their having availed of such benefit in past. It only means, if once exemption is allowed to employee under s. 10(10C) no exemption will be allowed again to him in any other assessment year. This amendment is effective from 1st April, 1993, i.e. relevant to asst. yr. 1993-94 and onwards. CIT(A) agreed with above contentions. First of all, he held, issue is covered by decisions of Hon ble Madras High Court in CIT vs. M. Raman (supra) and CIT vs. J. Visalakshi (supra).He held, "the Hon ble High Court clearly held that amount received by employee at time of voluntary retirement would be regarded as salary and relief under s. 89(1) of Act would be admissible in respect of amount received by appellant from his employer at time of voluntary retirement. Therefore, there is no question of treating this amount as not being covered under s. 89(1) r/w s. 17(3) of IT Act.". Coming to Board s letter F. No. 174/5/2001 ITA-1 dt. 23rd April, 2001. CIT(A) held that Board reiterated that compensation received under VRS cannot be distributed in more than one assessment year. He held, this only means that if employee has availed exemption under s. 10(10C), then he cannot have any exemption for any other year. He held, this is benevolent circular. Hence, relying upon following decisions of Hon ble Supreme Court, CIT(A) ruled issue in assessee s favour, holding that benevolent Circular is binding upon tax authorities: Navneet Lal C. Javeri vs. K.K. Sen AAC (1965) 56 ITR 198 (SC); Ellerment Lines Ltd. vs. CIT 1972 CTR (SC) 71: (1971) 82 ITR 913 (SC); K.P. Verghese vs. ITO & Anr. (1981) 24 CTR (SC) 358: (1981) 131 ITR 597 (SC); C.B. Gautam vs. Union of India & Ors. (1992) 108 CTR (SC) 304: (1993) 199 ITR 530 (SC); UCO Bank vs. CIT (1999) 154 CTR (SC) 88: (1999) 237 ITR 889 (SC). Coming to issue, whether it is to be treated under s. 17(3), CIT(A) held, this clause describes payments, which are considered to be profits in lieu of salary. Assessees also relied upon decision of Tribunal, Mumbai Bench, in case of ITO vs. Smt. Sandhya Nitin Gupte (ITA No. 3422/Mum/2004, dt. 30th Aug., 2004) and decisions of Hon ble Madras High Court cited supra. Aggrieved by above order, revenue is in appeal before Tribunal. learned Departmental Representative supported order of AO. assessees representatives on other hand supported order of CIT(A). assessee s representatives also relied upon decision of Hon ble Karnataka High Court in case of CIT vs. P. Surendra Prabhu (2005) 198 CTR (Kar) 209: (2005) 279 ITR 402 (Kar), wherein their Lordships held "amount received on voluntary retirement under special scheme is to be treated as compensation on termination of services and entitled for exemption under s. 10(10C)". Considering rival submissions and going through orders of Revenue authorities, I am of view that issue is squarely covered by decisions of Hon ble Madras High Court cited supra and also of Hon ble Karnataka High Court in case of P. Surendra Prabhu (supra). Tribunal Mumbai Bench, had taken same view in case cited supra. It is also seen that Tribunal, Indore Bench, in case of ITO vs. Chandra Kant S. Dharma & Ors. (2005) 95 TTJ (Ind) 151: (2005) 94 ITD 152 (Ind), held that Revenue is prohibited from filing appeal before Tribunal if tax effect does not exceed monetary limit of Rs. 1 lakh and as clarified in Instruction No. 1985 dt. 29th June, 2000 monetary limit is to be applied in each case taken singly. learned Departmental Representative submitted, if law point is involved, irrespective of monetary limit, appeal is to be filed. But then it is indirectly submitting that Revenue is entitled to file appeal is almost all cases irrespective of monetary limit. However, coming to instant case of assessee, issue is squarely covered by decisions of Hon ble Madras High Court cited supra. In case of M. Raman (supra), question referred to Hon ble High Court was "whether, in facts and circumstances of case, Tribunal was right in holding that voluntary retirement from service fall under term of termination of employment within meaning of s. 17(3)(t) of IT Act, 1961, and that relief under s. 89 is admissible in respect of amount received by assessee employee from employer at time of voluntary retirement?". Hon ble High Court, following its earlier decision in J. Visalakshi s case (supra), decided issue in assessee s favour. Coming to facts in case of P. Surendra Prabhu (supra) briefly, it is as under: "Salary: Exemption under s. 10(10C) and relief under s. 89 of IT Act, 1961: Asst. yr. 2001-02: Compensation on termination of service: Entitled to exemption 10(10C): Unexempted portion entitled to relief under s. 89. assessee was employee of Canara Bank, nationalised bank. assessee offered for voluntary retirement from service under scheme floated by bank. On acceptance of offer, assessee received full and final settlement of ex gratia payment and other benefits as per scheme from his employer. In return of income filed for asst. yr. 2001-02, assessee claimed exemption to extent of Rs. 5 lakhs received under voluntary retirement scheme from his employer, under s. 10(10C) of IT Act, 1961 and also relief under s. 89(1) of Act in respect of amount received in excess of Rs. 5 lakhs from his employer. assessee s claim was rejected by AO. CIT(A) and Tribunal allowed assessee s claim for relief under s. 89(1). On appeal, Karnataka High Court upheld decision of Tribunal and held as under: assessee, employee of respondent bank was not only entitled to benefit of exemption under s. 10(10C) of act to extent prescribed in provision itself, but for any amount over and above prescribed limit under aforesaid provision, assessee was also entitled to relief under s. 89(1) of Act read with r. 21A. " While deciding issue in favour assessee, Hon ble High Court h d taken note of decision of Hon ble Madras High Court in J. Visalakshi s case (supra). In view of above, all appeals by Revenue fail and are dismissed. In result, appeals of Revenue stand dismissed. *** INCOME TAX OFFICER v. RAJENDRA C. KHAMBKAR