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TMI Blog2020 (10) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... ELD THAT:- Section 89 is plain and clear. It provides that it is for the Assessing Officer of income tax to grant the relief under the Section and on application made before him. We further see that the Hon'ble Apex Court has accepted this position in multiple cases. In the case of Sundaram Motors (P.) Ltd. v. Ameerjan [ 1984 (8) TMI 3 - SUPREME COURT] awarded the petitioners with compensation in place of reinstatement. Holding that since the amount would be paid in lump sum, for payment of income tax, the benefit of spread over must be provided to the petitioners. Accordingly, the Court directed the employee to make a necessary application before the I-T Officer to claim relief under Section 89, and the officer to act immediately in disposing of the said application. On a reading of Section 192 (2A), we agree that the SBI should have computed the relief on the basis of the particulars and deducted income tax in accordance with Section 89. However, we see that the remedy of the undue deduction is provided under Section 89 of the I-T Act itself, where the assessee is required to apply to the Assessing Officer and avail relief under the Section. Accordingly, the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Pension Processing Centre (CPPC) of the State Bank of India, Patna. 4. Subsequently, on March 14, 2016, the petitioner submitted an application to the Branch Manager of SBI Chandwara Branch to commence the petitioner's pension and pay the arrears in pension. The petitioner also submitted a request to not deduct income tax on the amount by treating it as income of the current year, to spread over/ distribute the payment over the period, under Section 89 of the I-T Act read with Rule 21A (2)(d) of the I-T Rules. This was done to ensure that the income tax on the arrears of pension is not deducted by treating the amount as taxable income of the current year and is spread over in the relevant years from 2007 to 2016. 5. On March 30, 2016, the petitioner made a similar application and requested to the CPPC, Patna. The petitioner, further, furnished before the CPPC, all necessary details and calculation sheet for pension as required under with Section 192(2A) of the I-T Act as well as Form 10E of the I-T Department, for claiming relief under Section 89(1) of the I-T Act. 6. It is the petitioner's case that despite repeated requests, when the arrears of pension were rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are produced below. Section 89 Relief when salary, etc., is paid in arrears or in advance. 89. Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed: (emphasis supplied) Rule 21A Relief when salary is paid in arrears or in advance, etc. 21A. (2) [...] (d) Where the additional salary or additional family pension, as the case may be, relates to more than one previous year,-- (i) the previous years to which the additional salary or additional family pension relates and the amount relating to each such previous year shall first be ascertained; (ii) tax shall, then, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociation or body], is entitled to relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the particulars specified in Form No. 10E. 13. Section 192 provides for tax deduction at source at specified rates, by the person making payment of salary. Section 192 (2A) provides that in certain specified cases, where the assessee is eligible for the benefit of Section 89 of the I-T Act, the assessee has the option to furnish particulars by way of required forms to the person responsible for making their payment, wherein the person accountable for making deduction would compute the deduction based on the details provided. Practically under this Section, where particulars are submitted to the deductor, he shall take into account relief of Section 89 while computing tax to be deducted at source. Rule 21AA provides that Form No.10E has to be furnished to the person responsible for making payment to avail benefit under Section 89. 14. In the instant case, no one claims that the petitioner is not entitled to relief under Section 89. SBI, as well as I-T Department, are in agreement that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieu of reinstatement by the Hon'ble Apex Court. In the same decision, the Court held that if the employer were to deduct income tax at source on the amount allowed under Section 192, the appellants would be entitled to relief under Section 89 of the I- T Act. The Court directed the petitioner to approach the competent authority (which as per the Section is the Assessing Officer) to claim relief of spread over: 8. ... Both the appellants are entitled to the relief under section 89 because compensation herein awarded includes salary which was in arrears for 12 years and it is being paid in one lump sum under the orders of this court. Therefore, the salary has to be spread over a period of 12 years as also the compensation in lieu of reinstatement and the relief should be given as provided by section 89 of the Income-tax Act read with rule 21A of the Income-tax Rules. Both the appellants are entitled to the same. If any application is necessary to be made, the same may be made to the competent authority and the respondent-employer shall assist the appellants in each case for obtaining the relief. (emphasis supplied) 19. Finally, in the case of K.C. Joshi v. Union of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 192 (2A), we agree that the SBI should have computed the relief on the basis of the particulars and deducted income tax in accordance with Section 89. However, we see that the remedy of the undue deduction is provided under Section 89 of the I-T Act itself, where the assessee is required to apply to the Assessing Officer and avail relief under the Section. 24. A similar case came before the Hon'ble Madhya Pradesh High Court in the case of Shantilal Bagora v. State Bank of Indore (2002) 255 ITR 60. The petitioners applied to the Court claiming violation of Section 192 (2A) of the I-T Act read with Rule 21AA of the I-T Rules. The SBI was the person responsible for deducting the income tax in that case as well. The petitioner claimed that in not allowing the benefit of Section 89, despite their furnishing of particulars in the prescribed form (Form No. 10E), the SBI acted in contravention of the law. The Court agreed that Section 89 provided a statutory remedy to the petitioners to make an application to the Assessing Officer for relief. However, it held that it was for the Assessing Officer to examine the case and decide whether relief was applicable. It was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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