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Issues involved: Appeal against CIT(A) order on exemption u/s 10(10C) of the Act.
Exemption u/s 10(10C): The Appellate Tribunal ITAT Pune considered the case in light of the judgment in CIT Vs. Koodathil Kallyatan Ambujakshan, where the early retirement scheme for employees was analyzed. The scheme aimed at reducing employee strength without filling vacancies caused by retirements. The Tribunal found that the scheme satisfied the requirements of rule 2BA, including service duration, age criteria, overall reduction in employee strength, and non-filling of vacancies. The Tribunal also noted that the scheme offered two months' salary for each completed year of service, meeting all the necessary conditions for exemption u/s 10(10C). The Tribunal emphasized that the scheme's compliance with the guidelines was crucial, irrespective of circulars issued by authorities. The Tribunal relied on precedents like CIT Vs. Hero Cycles (P) Ltd. and UCO Bank Vs. CIT to support its decision. Comparison with Similar Case: The assessee's representative argued that the facts of the present case were akin to the Koodathil Kallyatan Ambujakshan case concerning SBI employees. The Tribunal observed no contradictory evidence presented by the Department's representative. Considering the similarities in facts, the Tribunal disagreed with the CIT(A)'s findings and concluded that the early retirement scheme of SBI met the conditions of rule 2BA, making the receipts eligible for exemption u/s 10(10C) of the Act. Decision and Conclusion: Ultimately, the Tribunal allowed the appeal, holding that the receipts under the SBI's early retirement scheme qualified for exemption u/s 10(10C) of the Act. The decision was based on the scheme's alignment with rule 2BA requirements and the absence of evidence to challenge the scheme's compliance with statutory guidelines. The judgment was pronounced on 28th September 2010.
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