9911796707
TMI Blog1981 (1) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... site. In the year 1978 the petitioner chose to be absorbed in the service of the undertaking of the aforementioned Governments and retired voluntarily from the service of the Govt. of India. The petitioner was eligible to certain retirement benefits as he had completed 25 years of service in the Central Govt. It is sufficient to state that he was entitled to either draw pension at the scale permissible or commute the same and draw a lump sum. The petitioner chose to commute his pension and as a result he was entitled to receive the sum of Rs. 93,567.60 as the commuted amount of pension which the Govt. sanctioned. The Accountant-General of Karnataka, Bangalore, by his communication dated August 25, 1980, PAE/Cent/80-81 bearing No. 8411 instr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive, and (b) in any other case, the commuted value of one-half of such pension such commuted value being determined having regard to the age of the recipient, the state of his health, the rate of interest and officially recognised tables of mortality : Provided that the maximum limit of payment specified in subclause (ii)(a) or sub-clause (ii)(b) shall not apply in respect of any such payment made before the 19th day of August, 1965. " Whether the commuted pension is exempted from taxation has been the subject-matter of decision by the Bombay Income-tax Appellate Tribunal which appears to have held that the same is entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove, the CBDT have issued a circular bearing No. 286 dated 17th November, 1980. The circular isissued to all the Commissioners of Income-tax. In para. 3 of the said circular it is stated that the Board has been advised that the decision of the Delhi High Court is to be accepted and thereafter, it is further stated that in that view of the matter instruction No. 819 stands withdrawn with immediate effect. It is, therefore, clear that the petitioner's commuted pension is not liable to tax at all and if he is not liable to tax under the Act, then the Accountant-General has no jurisdiction to order deduction of the tax at source. In this view of the matter, the petitioner is liable to succeed and the impugned communication of the 1st responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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