788/CBDT. - Income Tax - 788/CBDT

INSTRUCTION NO. 788/CBDT Dated : November 12, 1974 Reference is invited to Board's letter No.44A/1/63-ITJ dated the 25th April, 1963 addressed to all Commissioners of Income-tax in which emphasis was laid that while according recognition to the Superannuation Fund, rules of the Fund should be carefully scrutinised to ensure that the conditions of eligibility for membership prescribed therein do not permit any person who has earned a normal pension from a former employer, to be eligible for the membership of the Fund. In Board's Instruction No.675 (F.No.216/12/73-ITA-II) dated the 28th March, 1974 it was clarified Thai the word normal appearing in Board's letter dated the 25th April, 1963 cited above should be interpreted to mean the pension that a person would earn by completing the full tenure of service. 2. The Board had occasion to reconsider the Instruction given in its letter dated the 25th April, 1963 and have been advised that there is no warrant by any of the statutory conditions mentioned in the Board for imposing such restrictions on the trustees of the Fund. The only condition in this behalf which may be noticed is the one mentioned in rule 3(b) which provides that the Fund shall have for its sole purpose the provision of annuities for employees on their retirement at or after specific age, or on their becoming incapacitated prior to such retirement, etc. There is, therefore, nothing in this condition which prohibits a person who is already in receipt of pension from a former employer from being admitted to the Fund. 3. In view of the above, the instructions given in Board's letter dated 25th April, 1963 may be treated to have been withdrawn with immediate effect.