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TMI Blog2015 (6) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose and object sought to be achieved through such a provision. We, therefore, are of the view that denial of exemption to the assessee only because he has received compensation on his retirement a little more than the limit prescribed by rule 2BA, will be against the spirit of the provisions of the section 10(10C), especially, when no such limit has been prescribed under section 10(10C) and also in view of our observations that provisions of rule 2BA are not mandatory but in the shape of guidelines which are to be taken into consideration while framing the scheme The assessees are entitled to exemption under section (10)(10C) of the Act up to the amount of ₹ 5 lakhs as provided under the relevant provisions as provided of the said section - Decided in favour of assesse. - ITA No.5285/M/2014, ITA No.5286/M/2014, ITA No.5287/M/2014 - - - Dated:- 31-3-2015 - Shri B.R. Baskaran And Shri Sanjay Garg JJ Fo the Appellant : Shri Anil Sathe, C.A. For the Respondent : Shri Asgharzain V.P., D.R. ORDER Per Sanjay Garg, Judicial Member: The above titled three appeals have been preferred by three different assessees. All the three appeals have been fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief that the decision in the case of one of them will be applied in the cases of all, hence, could not prefer the appeals in time. Considering the reasoning given by the assessees, we condone the delay in preferring the present appeals. 6. The dispute is relating to the entitlement of exemption to the assessees under section (10)(10C) of the Act. The Ld. A.R. of the assessee, at the outset, has stated that the issue under consideration based on identical facts has been raised by one of the colleagues of the assessees namely Mr. Pradeep Pandhare. The matter was considered by the Tribunal in his appeal bearing ITA No.6055/M/2013 for the A.Y. 2007-08 decided on 18.07.14 and the claim has been allowed in favour of the assessee by the Tribunal by holding that the assessee under the circumstances was entitled to exemption under section (10)(10C) of the Act up to the amount of ₹ 5 lakhs. He has submitted that the present appeals of the assessees are squarely covered by the said decision of the Tribuanal. 7. We have perused the order of the Tribunal dated 18.07.14 (supra). We find that on identical facts and issues under consideration, the Tribunal has allowed the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the compensation payable/paid exceeded both the limits set out in clause (vi) of Rule 2BA. The calculation given by the assessee was also erroneous. He therefore held that the action of the Assessing Officer in disallowing deduction u/s 10(10C) to the extent of ₹ 5 lakhs was correct and accordingly dismissed the appeal of the assessee. The assessee is thus in appeal before us. 5. We have heard the ld. Representatives of the parties and have also gone through the records. The ld. AR of the assessee has contended that the company had clearly framed the VRS as tax compliant and the workmen had accepted that the VRS framed was exempted u/s 10(10C) of the Income Tax Act. Only on this understanding the workers had retired from the company voluntarily. The ld. AR further referred to the various clauses of the scheme wherein it has been mentioned that the compensation payable under the Scheme was exempt only to the extent permissible under Section 10(10C) of the Income Tax Act 1961 read with Rule 2BA of the Income Tax Rules, 1962 up to an amount of ₹ 5,00,000/-(Rupees Five Lakhs only). The tax benefit referred to above would be available only to an assessee who has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observe that the section 10(10C) starts with the words any amount received or receivable by an employee whereas the rule 2BA clause 6 has prescribed as limit of such amount. It has been provided in first proviso to section 10(10C) that the schemes under this section are to be framed by the various institutes/companies in accordance with such guidelines as may be prescribed. A careful perusal of the provisions of section 10(10c) when read with rule 2BA of the Income Tax Rules shows that the substantive provisions of the Act do not prescribe any limit relating to the amount received or receivable by an employee on his voluntary retirement for exemption up to ₹ 5 lakhs under the scheme which is to be framed as per guidelines as provided under rule 2BA. It is evident before us that the VRS scheme in consideration and its various clauses were inconformity with the provisions of section 10(10C), except that the assessee in this case had received amount on his voluntary retirement more than the limit prescribed under rule 2BA. As per section 10(10C), the scheme is to be framed as per the guidelines as may be prescribed. Further a perusal of the heading of rule 2BA shows that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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