9911796707
TMI Blog2009 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... DHIRENDRA MISHRA J.— These appeals are being disposed of by this common order as common substantial question of law is involved in these "appeals, whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal (for brevity 'the Tribunal') was justified in law in directing the Assessing Officer (for short 'AO') to allow the claim of the assessee for exemption under section 10(10C) of the Income-tax Act, 1961 (for short 'the Act') to the extent of Rs. 5,00,000 by applying the prospective amendment retrospectively ?" 2. For the purpose of this order, reference is made to the facts of Tax Case No. 17/2007 (ITO v. Ram Sevak Gupta). 3. Briefly stated, the facts of the case are that the respondent was an employee of Bharat Aluminium Company Ltd. (Balco), Korba. He filed return of income for the assessment year 2003-04 declaring taxable income of Rs. 3,22,315. Subsequently, he revised the taxable income at Rs. 98,800. The Assessing Officer selected his case for scrutiny and issued notice under section 143(2) of the Act. During the assessment proceeding it was noticed that the employer of the respondent had determined the ex gratia amount of voluntary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made in instalments to be paid in subsequent years ? 9. Before dealing with the above question, we propose to deal with the relevant statutory provisions. Section 10(10C) of the Act, prior to the amendment in the year 2003, reads as under: "any amount received by an employee of— (i) a public sector company ; or (ii) any other company; or (iii) an authority established under a Central, State or Provincial Act ; or (iv) a local authority ; or (v) a co-operative society; or (vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 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 of management as the Central Government may, by notification in the Official Gazet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 13. Section 10(10C) of the Act was inserted in order to make voluntary retirement attractive so as to reduce human complements for securing economic viability of certain companies. It was intended to make voluntary retirement more attractive and beneficial to the employees opting for voluntary retirement. Therefore, this has to be interpreted in a manner beneficial to the optee for voluntary retirement, if there is any ambiguity. 14. Section 15(a) of the Act provides for chargeability of salary to tax as soon it becomes due, though not paid. As soon the salary becomes due, the incurring of the liability is complete. As soon the liability is incurred, it becomes a deemed payment in view of the definition of "pay" defined under section 43(2) of the Act. In the present case, though the amount of monthly benefit payable under the voluntary retirement scheme consists of salary or benefit in lieu of salary, as defined in section 17(1) or (3) read with section 43(2) of the Act. Prior to amendment in the Act, 2003, any amount "received" by an employee on his voluntary retirement in accordance with any scheme of voluntary retirement, was not to be included in computing his total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is further held that the amount which is receivable at the time of voluntary retirement according to the scheme and became chargeable to tax under clause (a) of section 15, even though not paid, is exempted from being charged to tax by reasons of section 10(10C) to the extent of Rs. 5 lakhs. Even if the payment is stretched over a period of years, the same would not become chargeable to tax in any subsequent assessment year. 17. Now, we propose to examine whether it would be hit by the second proviso to section 10(10C) of the Act. The second proviso provides that exemption under section 10(10C) to the extent that the benefit of exemption is available only in one assessment year and would not be available for any other assessment year, once availed of. 18. Vide amendment by the Finance Act, 2003, clause (10C) of section 10 was amended and the words "or receivable" were added after the words "received". The above amendment came into force, with effect from April 1, 2004. In certain cases, some of the employees availing of voluntary retirement scheme were facing problem in case the amount was given to them in instalments over a number of years. Keeping in view the above fact a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o see what is the proper interpretation to be put upon the earlier Act where the earlier Act is obscure or ambiguous or readily capable of more than one interpretation. ( State of Bihar v. S. K. Roy, AIR 1966 SC 1995). While interpreting the words "refunded" as used in clause (b) of section 15 of the Central Sales Tax Act, 1956, the hon'ble apex court in the matter of Thiru Manickam and Co. v. State of Tamil Nadu reported in [1977] 1 SCC 199 held that ambiguity in the language of clause (b) of section 15, as it existed at the relevant lime, the matter is made clear by the amendment made in the Central Act by the Central Sales Tax (Amendment) Act, 1972. It has been further held that the fact that the amendment of clause (b) of section 15 was not like some other provisions given retrospective effect, would not materially affect the position. As already mentioned above, the Legislature as a result of the amendment, clarified what was implicit in the provisions as they existed earlier. An amendment which is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provision, even though such amendment is not given retrospective effect. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
