2019 (4) TMI 969 - HC - Income Tax

Exemption u/s 10(10C) - amount received by the assessee on voluntary retirement, who was in service of Bank - HELD THAT - As the question of grant of exemption, an amount received on the for voluntary retirement from the institution stipulated in the said provision is argued, it is no longer res-integra and has been concluded by a series of judgments by different High Courts including the Madras High Court, which has been approved by the Hon'ble Supreme Court as well and one such order is produced by the learned counsel for the appellants herself in the case of Chandra Renganathan and other Vs. CIT, Chennai 2009 (10) TMI 498 - SUPREME COURT OF INDIA as held that amounts received by retiring employees of the RBI would be eligible for exemption under the aforesaid provisions of the Income Tax Act. On behalf of the Union of India and the Commissioner of Income Tax, the respondent herein, it was submitted that in view of the said Circular, the respondent herein, it was submitted that in view of the said Circular, the respondent would allow the benefit of deduction to the appellants under Section 10(10C) of the Income Tax Act, 1961, as far as the retired employees of the Reserve Bank of India are concerned - Decided against revenue.

Summary

Issues:
Exemption under Section 10(10C) of Income Tax Act for amount received on voluntary retirement.

Analysis:
The Revenue Department appealed against a decision granting exemption under Section 10(10C) of the Income Tax Act to employees who received amounts on voluntary retirement from a bank. The provision allows exemption subject to conditions in Rule 2 B of the Income Tax Rules. The Revenue Department acknowledged that previous judgments, including those by Bombay High Court and Madras High Court, favored granting exemption under this section. The Revenue Department cited a Supreme Court case where the appeal was dismissed but left questions of law open. However, no material was presented to justify denying exemption in the current case.

The issue of granting exemption for amounts received on voluntary retirement from specified institutions has been extensively addressed in various High Court judgments, including Madras High Court decisions. The Supreme Court has also upheld such exemptions, as seen in a case involving the RBI scheme. A circular from the Central Board of Direct Taxes confirmed that retiring RBI employees were eligible for exemption under Section 10(10C) of the Income Tax Act. Based on this precedent and the lack of merit in the Revenue's arguments, the appeals were dismissed, upholding the exemption granted to the retiring employees. The judgment reinstated the Tribunal's decision, emphasizing that no costs were awarded in the matter.