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TMI Blog1984 (8) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of the assessment proceedings, it was found that the assessee had received Rs. 66,040 from the superannuation fund during the year. The facts of the case are that the assessee was in service with TISCO up to May 1976. He resigned from there and joined Modi Steels. The assessee was a member of an approved superannuation fund while in service with TISCO. The pensionary claims under the fund were operated by the LIC up to1-4-1972and after that by the trustees of the fund. As the assessee resigned from the service of TISCO, he received Rs. 24,052 on25-5-1978from the LIC for the period the fund was under the LIC and Rs. 41,988 representing net surrender value with interest from the trustees of the superannuation fund. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er (Appeals), it was not ' income ' and was not assessable under any of the provisions of the Income-tax Act, 1961 (' the Act '). 4. Before us, elaborate arguments have been adduced on behalf of the parties. For the revenue, the learned departmental representative, Shri M. M. Bharti, relied strongly on the definition of ' income ', as it is inclusively defined under section 2(24) of the Act. Section 10(25)(ii), read with section 10(13) of the Act was also pressed into service. Reliance was also placed on the decisions reported in CIT v. G. Hyatt [1971] 80 ITR 177 (SC), Raja Ragavendra Singh v. State ofPunjab[1976] 102 ITR 40 (Punj. Har.), CIT v. Tollygunge Club Ltd. [1977] 107 ITR 776 (SC) and Lachhman Dass v. CIT [1980] 124 ITR 706 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service voluntarily is, therefore, not covered by rule 3(b) of Part B of the Fourth Schedule. Following the above change, section 58S(1) of the 1922 Act has been omitted being rendered superfluous and no corresponding provision has been made in the 1961 Act. 6. What emerges from the above changes in the rules is that if the payment made is covered by the conditions given under rule 3(b), the payment is exempt under section 10(13) being payment from an approved superannuation fund and also excluded from salary under section 17(3)(ii). In other words, payments made under rule 3(b) are not salaries and are also exempt under section 10(13). 7. But if the payment is not covered by rule 3(b), then the payment does not come within the exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Schedule, which provides that any amount repaid to the employer shall be deemed to be the income of the employer. If the board of directors/trustees decided to forfeit the payment and revert the same to the employer, then also it becomes the income of the employer due to the deeming provision. If the payment is authorised to the employee by obtaining the previous approval of the Commissioner, then the payment loses the character of payment from an approved superannuation fund, the payment being gratuitous in nature. Then such payment attracts the provisions of sections 15, 17 and even 56. There is no escapement from taxation being clearly an income within the definition of section 2(24). That explains the insertion of section 192(5) and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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