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TMI Blog2007 (9) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... mon order, because the facts and issues involved in the grounds of appeals are identical, for the sake of convenience. 2. All the instant assessees were former employees of Reserve Bank of India who took retirement under the Optional Early Retirement Scheme (OERS) meant for the employees who having completed 25 years of service and attained the age of 50 years. The scheme was for the benefit of the employees who opted for retirement from RBI and RBI was to pay ex gratia amount. The same was claimed as exempt by these employees under section 10(10C) of the Act. 3. The Assessing Officer was of the view that the payment received by the assessees under OERS do not qualify for exemption under section 10(10C) of the Act read with rule 2BA of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Madras High Court in the case of CIT v. G.V. Venugopal [2005] 273 ITR 307. Thereafter, the CIT(A) allowed all the appeals of the above assessees. 5. At the outset of the appellate proceedings, learned AR for the assessee submitted that identical issue in respect of erstwhile employees of RBI who have opted for OERS were held eligible for exemption under section 10(10C) and also relief under section 89(1) of the Act by ITAT, Mumbai-Bench in the case of Vaishali A. Shelar v. Asstt. CIT [2007] 14 SOT 407, ITAT - 'D' Bench - New Delhi in the case of Smt. Santosh Gautam. [I.T. Appeal No. 3223(Delhi) of 2006 for assessment year 2004-05] along with other appeals and ITAT - 'G' Bench - New Delhi in the case of Shri Dharam Pal [I.T.A. No. 35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned CIT(A) has rightly held that the scheme framed by RBI was covered by the provisions of section 10(10C) and the amount received by the assessee at the time of voluntary retirement was also covered by section 10(10C) read with rule 2BA of the IT Rules, 1962. Therefore, he held that the assessee was also entitled to relief under section 89(1). The contention of the learned CIT(A) finds support from the following case laws:- (i )CIT v. G.V. Venugopal [2005] 273 ITR 307 (Mad.); (ii) CIT v. P. Surendra Prabhu [2005] 279 ITR 402 (Kar.); (iii) CIT v. J. Ramamani [2006] 286 ITR 616 (Mad.); 5. After perusal of all the above-cited judgments it is evident that the assessee was eligible to claim simultaneous benefit under section 10(10C) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the guidelines prescribed under rule 2BA are not complied in the OERS of the RBI. Any statement that it will not fill up the vacancies caused as a result of OERS would have resulted in opposition by the employees themselves as it will be a repressive measure against the labour. It will of interest to observe the finding of the Hon'ble Calcutta High Court in the case of Sail DSP Employees Association v. Union of India (supra) where it has opined that section 10(10C) of the Income-tax Act, 1961 uses the expression "any amount received by an employee ... at the time of his voluntary retirement in accordance with any scheme or schemes of voluntary retirement." If a plain literal interpretation of statutory provision produces a manifestly abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill retirement. This clearly indicates that it is only the compensation part payable on account of cessation of employment, which is the amount intended in section 10(10C), inasmuch as , on the date an employee opts for voluntary retirement, he is already entitled to the accumulation of the provident fund in his account governed by the Provident Funds Act and the Scheme, gratuity payable under the Payment of Gratuity Act, encashment of leave pay under the leave rules and pension payable under the pension rules, if there be any. These are all terminal benefits to which an employee is entitled even without the scheme. This entitlement cannot be taken away under any scheme. Therefore, if these amounts are also payable under the scheme, they wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the opinion expressed by the Chartered Accountant on the issue will make the sums in question taxable. Neither the opinion of the Chartered Accountant nor the views of the RBI will finally determine the fate of exemption that is claimed under section 10(10C) but the satisfaction of the conditions or guidelines laid down by the I.T. Rules, 1962. A plain reading of section and guidelines of rule 2BA shows that the scheme in question leaves no doubt in our minds that the sums in question are clearly exempt under section 10(10C) of the Act up to the extent of Rs. 5 lakhs. On the excess receipts the assessee is entitled to relief under section 89 of the Act. The provisions of section 89 of the Act read as under: - 'Where the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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