9911796707
TMI Blog2008 (6) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI introduced an Optional Early Retirement Scheme, hereinafter referred to as the OERS, under which employees who had completed 25 years of full-time regular service and had also completed 50 years of age as on August 1, 2003 were given the option to take voluntary retirement. 3. The terms and conditions on which the petitioners were offered voluntary retirement under the OERS are extracted hereinbelow for convenience: "(b) The Scheme is applicable to employees who have completed 25 years of full-time regular service in the bank and have also completed 50 years of age. Only an employee who has completed 25 years of service and 50 years of age as on August 1, 2003 (for convenience), will be eligible to apply for retirement under the Scheme. (c) The Scheme will be available to an employee entirely at his/her option/discretion. The employees in the bank's service would be fully entitled to continue in service, with all benefits for which they are eligible, if they decide not to opt for this facility. The eligible employees should apply in the prescribed application form. (e) On acceptance of an employee's application by the bank, his/ her date of relieving from service, wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication for early retirement under the Scheme, the employee will be eligible for ex gragtia amount equal to pay plus dearness allowance for the number of years of actual service rendered at 60 days for each completed years of service or part thereof in excess of six months or pay plus dearness allowance for remaining months of service reckoned up to the date on which the employee would retire on superannuation, whichever is less. 6. Income-tax liability: Income if any, on the amount of ex gratia, will have to be borne entirely by the employees concerned. The ex gratia amount will be payable in one lump sum subject to recovery of Income-tax, which is to be borne entirely by the employee. 7. Retirement benefits: In addition to the ex gratia amount payable, employees who are granted early retirement under the Scheme will be eligible for retirement benefits, viz., PF, pension, gratuity, encashment of ordinary leave and bonus under guarantee fund as per normal rules applicable in that respect. 8. Weightage of service for pension: Addition of service up to five years in the qualifying service for pension, if admissible under the provisions of the RBI Pension Regulation, 1990, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956) ; or (vii) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 ; or (viia) any State Government; or (viib) the Central Government; or (viic) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette, specify in this behalf; or (viii) such institute or management as the Central Government may, by notification in the Official Gazette, specify in this behalf, at the time of his voluntary retirement or termination of his service, in accordance with any scheme or schemes or voluntary retirement or in the case of a public sector company referred to in sub-clause (i), a scheme of voluntary separation, to the extent such amount does not exceed five lakh rupees: Provided that the schemes of the said companies or authorities or societies or Universities or the Institutes referred to in sub-clauses (vii) and (viii), as the case may be, governing the payment of such amount are framed in accordance with s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely were issued to the petitioners, wherein it was alleged that the income of the petitioners for the assessment year 2004-05 had escaped assessment and it was, therefore, proposed to reassess the income for which it was necessary for the petitioners to file returns within 30 days from the date of service of the said notices. 16. Pending proceedings for assessment and/or reassessments of income, which had allegedly escaped assessment, orders were passed under section 2816 of the Income-tax Act provisionally attaching the refund vouchers/ cheques. 17. The petitioners wrote letters dated January 5, 2005 and January 10, 2005, through their advocate, to the Assessing Officer, requesting that the returns already filed by the petitioners be treated as returns filed in pursuance of the notices under section 148 of the Income-tax Act. 18. By several letters addressed to the respective petitioners dated January 4, 2005, January 19, 2005, January 20, 2005, January 25, 2005, January 31, 2005 and February 2, 2005 respectively, the Assessing Officer intimated to the petitioners the reasons under section 148(2) of the Income-tax Act for mi- hating proceedings under section 147 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) an authority established under a Central, State or Provincial Act ; or … at the time of his voluntary retirement or voluntary separation shall be exempt under clause (10C) of section 10 only if the scheme of voluntary retirement framed by the aforesaid company or authority or co-operative society or University or institute, as the case may be, or if the scheme of voluntary separation framed by a public sector company, is in accordance with the following requirements, namely:- (i) it applies to an employee who ha completed 10 years of service or completed 40 years of age; (ii) it applies to all employees (by whatever name called) including workers and executives of a company or of an authority or of a co operative society, as the case may be, excepting directors of a company or of a co-operative society, (iii) the scheme of voluntary retirement or voluntary separation has been drawn to result in overall reduction in the existing strength of the employees; (iv) the vacancy caused by the voluntary retirement or voluntary separation is not to be filled up; (v) the retiring employee of a company shall not be employed in another company or concern belonging to the same man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, not binding on the Department. The final decision was left with the concerned income-tax authorities. 28. The impugned order of assessment stated that the Assessing Officer had firm reasons to believe that income of the assessee had escaped assessment since the voluntary scheme introduced was not in conformity with the clauses (i), (iii) and (iv) of rule 2BA of the Income-tax Rules and hence the petitioners were not liable to tax on the compensation to the extent of Rs.5 lakhs, as claimed by them. 29. The assessment order is apparently contrary to a composite decision of the Income-tax Appellate Tribunal in the appeals being I. T. A. No. 471/MDsIO6, I. T. A. No. 472/MDs/06, I. T. A. No. 501/MDs/06 and I. T. A. No.518/MDs/06. The order of the learned Tribunal is extracted here in below: "It may not be out of place to mention that the Calcutta High Court while dealing with the writ petition in 4957/W/04 in its operative para has expressed the following view: 'Prima facie, it appears that money received on account of voluntary retirement up to the sum of Rs.5 lakhs was not taxable. The Reserve Bank of India, it appears, was conscious of the legal position and that is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sarkar submitted that initiation of proceedings for reassessment of escaped income was on the basis of honest belief of the Income-tax Department and/or the Assessing Officer and the challenge thereto was not sustainable. 36. On behalf of the Revenue, it was further argued that the assessment order had very lucidly discussed how and in what manner the OERS was not in conformity with the Income-tax Act and/or Rules. 37. Mr. Sarkar submitted that there is no apparent error in the assessment order impugned, warranting interference of this court in exercise of power under article 226 of the Constitution of India. 38. It was lastly argued that the orders of the Commissioner (Appeals) and the Tribunal were not binding on this court. This court exercising jurisdiction ought to confine itself to the issue of whether initiation of proceedings was correct in law and whether the assessment order passed by the Assessing Officer can be supported in law. 39. Admittedly, there were no new materials before the Assessing Officer, save and except a circular of the Reserve Bank of India that was based on an opinion of a company of chartered accountants which had no binding value. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
