Commissioner of Income-tax v. Appasaheb Baburao Kamble
[Citation -2014-LL-1210]

Citation 2014-LL-1210
Appellant Name Commissioner of Income-tax
Respondent Name Appasaheb Baburao Kamble
Court HC
Date of Order 10/12/2014
Judgment View Judgment
Keyword Tags voluntary retirement • retirement scheme • ex gratia
Bot Summary: JUDGMENT The judgment of the court was delivered by Mohan M. Shantanagoudar J.-The respondent-assessee is a retired employee of State Bank of India, Belgaum; he filed his return of income on June 4, 2008, for the assessment year 2008-09 by declaring the total income of Rs. 6,94,390; during the said year, the assessee had exercised the option of voluntary retirement under the exit option scheme and claimed ex gratia/compensation amount as determined under section 10(10C) of the Income-tax Act, 1961. Though the original authority disallowed the claim of the assessee on the ground that the scheme of State Bank of India did not satisfy the conditions laid down under rule 2BA of the Income-tax Rules, 1962, the first appellate authority has allowed the claim of the assessee by allowing the appeal filed by the assessee. The said order of the first appellate authority is confirmed by Income-tax Appellate Tribunal. The order of the first appellate authority as confirmed by the Income-tax Appellate Tribunal are questioned in this appeal. Virtually the first question of law as raised by the Department is answered by the first appellate authority. Such order of the first appellate authority is confirmed by the Income-tax Appellate Tribunal. In the said judgment, the Bombay High Court has ruled that the Central Board of Direct Taxes clarification based on the RBI's letter stating that the receipts under the voluntary retirement scheme did not qualify for exemption under section 10(10C) of the Income-tax Act is not binding on the courts.


JUDGMENT judgment of court was delivered by Mohan M. Shantanagoudar J.-The respondent-assessee is retired employee of State Bank of India, Belgaum; he filed his return of income on June 4, 2008, for assessment year 2008-09 by declaring total income of Rs. 6,94,390; during said year, assessee had exercised option of voluntary retirement under "exit option" scheme and claimed ex gratia/compensation amount as determined under section 10(10C) of Income-tax Act, 1961. Though original authority disallowed claim of assessee on ground that scheme of State Bank of India did not satisfy conditions laid down under rule 2BA of Income-tax Rules, 1962, first appellate authority has allowed claim of assessee by allowing appeal filed by assessee. said order of first appellate authority is confirmed by Income-tax Appellate Tribunal. order of first appellate authority as confirmed by Income-tax Appellate Tribunal are questioned in this appeal. Department has raised following two questions of law: "(i) Whether Tribunal is justified in not considering fact that Commissioner of Income-tax (Appeals) has erred in ignoring e-circular on the'exit option' scheme issued by State Bank of India,' Corporate Centre, Mumbai, wherein, as per paragraph 10, it is clearly mentioned that no exemption of ex gratia from income- tax under section 10(10C) of Income-tax Act, 1961, is intended in that scheme? (ii) Whether Tribunal is justified in upholding findings of Commissioner of Income-tax (Appeals) that conditions mentioned in rule 2BA of Income-tax Rules 1962, have been met ignoring e-circular of State Bank of India as well as Board's Instruction No. 200/34/2009-IT.I, dated October 6, 2009, wherein it is clearly mentioned that scheme framed by State Bank of Patiala and State Bank of India does not lay out eligibility for deduction under section 10(10C)?" So far as first question of law is concerned, Income-tax Appellate Tribunal on facts has concluded that respondent-assessee has served for period of more than 10 years and at time of retirement he was more than 40 years. second exit option scheme of State Bank of India was introduced to reduce staff. It was just impossible to continue new environment of computerisation applied to workers and officers. scheme has resulted in overall reduction of employees. assessee has furnished declaration that he has not accepted any commercial employment in any company or concern belonging to same management. Thus, on facts, first appellate authority has concluded that all conditions laid down in rule 2BA of Income-tax Rules are fulfilled. Hence, virtually first question of law as raised by Department is answered by first appellate authority. Such order of first appellate authority is confirmed by Income-tax Appellate Tribunal. In addition to same, any provision giving benefit to assessee generally will be interpreted in favour of assessee generally. In respect of second question of law, as raised by Department, is no more res integra in view of judgment of Bombay High Court in case of CIT v. Koodathil Kallyatan Ambujakshan [2009] 309 ITR 113 (Bom). In said judgment, Bombay High Court has ruled that Central Board of Direct Taxes clarification based on RBI's letter stating that receipts under voluntary retirement scheme did not qualify for exemption under section 10(10C) of Income-tax Act is not binding on courts. said judgment is holding field for more than five years and same is being followed by other courts. In view of same, second question of law does not arise for consideration. In view of same, no interference is called for. appeal fails and same stands dismissed. *** Commissioner of Income-tax v. Appasaheb Baburao Kamble
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