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TMI Blog2018 (4) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... ] have categorically held that the retiring employees are eligible for exemption under Section 10(10C) of the Act. Rule 2BA of the Income Tax Rules, 1962, cannot exceed the provisions of the Act. Therefore, the demand made by the Income Tax Department is per se illegal and is not sustainable any further. - Decided in favour of assessee. - W.P(MD)No.9000 of 2010 MP(MD)No.1 of 2010 - - - Dated:- 9-4-2018 - M. Govindaraj, J. For the Petitioner : Mr.VR.Shanmuganathan For the Respondents : Mrs.S.Srimathy ORDER Challenging the demand notice dated 05.03.2010 issued by the Income Tax Department, the writ petitioner is before this Court. 2. According to the petitioner, he is an employee of ICICI Bank. The Bank has introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Official Gazette, specify in this behalf, On his voluntary retirement or termination of his service, in accordance with any scheme or schemes of 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 such guidelines including inter alia criteria of economic viability as may be prescribed: Provided further that where exemption has been allowed to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of management as the Central Government may, by notification in the Official Gazette, specify in this behalf, 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 has 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 aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tirement Scheme was put to judicial scrutiny in view of Rule 2BA of the Income Tax Rules, 1962. There were different views by various High Courts. Ultimately, in the judgment of Commissioner of Income Tax vs. Koodathil Kallyatan Ambujakshan (2008) 219 CTR (Bom) 80, the Bombay High Court in the case of Voluntary Retirement Scheme framed by RBI has held that the exemption under Section 10(10C) of the Act was applicable to the employees, who had taken benefit of the Scheme framed by RBI and observed as under: 10.............................. Merely because the scheme may not expressly set out that the posts will not be filled in cannot result in the scheme not being a scheme falling under s.10(10C) r/w r.2BA of the Rules, bearing in mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Board of Direct Taxes in Instruction No.2/2005, dated 24.10.2005, the Department need not have to file an appeal to the Tribunal and the circular has not been taken into consideration by the Tribunal and set aside the impugned demands. 10. In the instant case also, the impugned order specifies the sum of ₹ 1,90,844/- for the assessment year 2004-2005. As per Section 10(10C) of the Act, the individual is entitled to exemption upto ₹ 5,00,000/-. According to the petitioner, the Hon'ble Supreme Court as well as Bombay High Court have categorically held that the employees are eligible for exemption under Section 10(10C) of the Act. Rule 2BA of the Income Tax Rules, 1962, cannot exceed the provisions of the Act. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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