2012 (6) TMI 812 - AT - Income Tax

Summary

Issues involved: Interpretation of exemption under section 10(10C) of the Income-tax Act, 1961 for ex gratia payment received on voluntary retirement under the Exit Option Scheme (EOS) floated by the State Bank of India.

Summary:
The appeal was against the order of the Commissioner of Income-tax (Appeals)-III, Pune, arising from the Assessing Officer's order u/s 143(3) read with section 147 of the Income-tax Act, 1961, for the assessment year 2006-07. The sole issue raised was the denial of exemption of &8377; 3,03,330/- u/s 10(10C) of the Act for ex gratia payment received by the assessee on voluntary retirement under the EOS of State Bank of India. The authorities held that the scheme did not comply with Rule 2BA of Income-tax Rules, 1962, and referred to a CBDT Instruction dated 6.10.2009 to support their decision.

It was noted that the issue in this appeal was similar to a previous case, and following the precedent, the order of the Commissioner of Income-tax (Appeals) was set aside. The matter was remanded back to the Assessing Officer with directions as given in the previous case of Jagdish Raghunath Ektare. The appeal of the assessee was allowed for statistical purposes.

The decision was pronounced in the open Court on 26th June 2012.