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TMI Blog1979 (11) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... eptember 12, 1974. The letter is addressed to the chairman-cum-managing director, Bharath Earth Movers Ltd., Bangalore, and is to the following effect: " I am directed to refer to your letter No. CAO/054/BVSR/73 dated 19th March, 1974, on the above subject and to convey sanction of the President to the permanent absorption of Lt. Col. B.V.S. Rao (IC-6364) Engineers in the Bharath Earth Movers Limited, Bangalore, in public interest, with effect from the date mentioned below on the following terms and conditions : (i) Date of absorption: Lt. Col. B.V.S. Rao will be absorbed in BEML with effect from 24th July, 1974. (ii) Pension gratuity : On his permanent absorption in BEML the officer will be eligible for pro rata pension and deat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the service pension will be admissible and payable under these option rules. There is no dispute that the petitioner exercised the option as given to him under cl. V(b) and he became entitled to a lump sum amount in lieu of the pro rata service pension, that is, a lump sum in lieu of the entire pension to which he was entitled. Subsequently, the Controller of Defence Accounts, Allahabad, sent a communication dated 8/9-10-1975 addressed to the Pension Pay Master, Bangalore, in which Rs. 93,333 was stated to be the amount payable towards the full commuted pension in lieu of pro rata pension. However, that communication went on to add that a sum of Rs. 31,871 was to be deducted towards income-tax and surcharge. A copy of the communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18/78 (C. P. Ohrie v. Accountant-General in which a similar question was under consideration. The judgment has been delivered in W.P. No. 8618/78 yesterday. A common-objection statement has been filed in regard to both these cases. I must mention that so far as the instant case is concerned the averments in the common objection are not quite accurate. However, it is clear that the petitioner also exercised an option consequent on which he was entitled to receive a lump sum amount in commutation of the full pension. The reference, however, was to r. 37A of the Central Civil Services (Pension) Rules, 1972. This would not be correct as the petitioner was a commissioned officer in the Indian Army and was not governed by the Central Civil Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued by the Commissioner is defective and it transpires that the notice was issued on certain departmental instructions from the CBDT which was in general terms, as to the interpretation of the provisions under s. 10(10A). The contention urged on behalf of the petitioner that the notice should be quashed as defective, is a highly technical one. It may not be correct to quash the notice merely on that ground, as the basis is that the full exemption granted by the ITO is erroneous and the exemption could have been only in regard to a portion of the amount. However, the main submission made, that the petitioner was entitled to the exclusion of the entire amount from computation of the total income, appears to be sound and must be acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) of the letter extracted above this becomes clear. A reading of s. 10(10A) of the Act makes it clear that the petitioner was not governed by the Civil Pension (Commutation) Rules of the Central Govt., as he was a member of the defence services. The payment to him on retirement consequent on his absorption in a public sector undertaking was not under the usual provision regarding commutation of pension under the Army Services Rules, but by virtue of the option rules as specified in the letter dated September 12, 1974. The reasoning adopted in W.P. No. 8618/78 (C. P. Ohrie v. Accountant-general) equally applies to the instant case. The payment in commutation of pension received by the petitioner was under the special scheme applicable to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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