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TMI Blog2004 (10) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Assessing Officer in not granting relief under section 89 on the ground that the assessee is entitled to exemption under section 10(10C) to the extent of Rs. 5 lakhs only and that decision of the Madras High Court in the case of CIT v. M. Raman [2000] 245 ITR 856 pertained to assessment year 1982-83 when there was no exemption under section 10(10C) in regard to compensation received on voluntary retirement. The CIT(A) also observed that rule 21A of the Income-tax Rules, 1962 relating to relief under section 89 is not applicable to the assessee as the nature of compensation received by the appellants is not in connection with the termination of the employment but the payment has been received on voluntary retirement. 4. Being aggrieved, the appellants are in appeal before us. The ld. Counsel for the assessees contended that the appellants are entitled to the relief under section 89 as per the provisions of the Act. It was contended that under section 10(10C), which was incorporated w.e.f. 1-4-1987, granted exemption in respect of the whole of the amount received as compensation at the time of voluntary retirement. However, subsequently, when the section was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. D.R. the Legislature had used the words termination of service and not voluntary retirement and, therefore, it is not open to the appellate authority to import the words 'voluntary retirement' for the purpose of application of rule 21 of the Income-tax Rules, 1962. In this connection, reliance was placed on the following decisions: - (i) Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC); (ii) CIT v. Sun Engg. Works (P.) Ltd. [1992] 198 ITR 297 (SC); (iii) Coal India Ltd. v. Jt. CIT [2004] 88 ITD 514 (Kol.). Our attention was invited to the proviso to section 10(10C) of the Income-tax Act, 1961 which provides that where exemption has been allowed to an employee under said clause, no exemption thereunder shall be allowed to him in relation to any other assessment year. According to the ld. D.R., exemption to the extent of Rs. 5 lakhs having been granted to the appellants, relief under section 89 was not permissible. It was accordingly pleaded that the appeals of the appellants may be dismissed. 6. We have given our careful consideration to the rival contentions. In order to appreciate the issue involved in these appeals, it would be necessary in our view to consider t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment 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 Gazette, specify in this behalf, at the time of 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 an employee under this clause for any assessment year, no exemption thereunder shall be allowed to him in relation to any other assessment year." 8. As already pointed out, it is the case of the revenue that by virtue of this proviso, the assessee is not entitled to any relief under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of compensation is received (such previous year being hereafter in this sub-rule referred to as the relevant previous year) shall be reduced by the amount, if any, by which the tax on the amount of the compensation included in the total income of the relevant previous year calculated at the average rate of tax applicable to such total income, exceeds the tax on the amount of such compensation, calculated at the rate of tax determined under clause (b). (b) The total income of the assessee in respect of each of the three previous years immediately preceding the relevant previous year shall be increased by an amount equal to one-third of the amount of the compensation included in the total income of the relevant previous year, and the average rate of tax for each of the said three previous years shall be calculated as if the total income so increased were the total income of that previous year; and the average of the average rates of tax so calculated for the three previous years shall, for the purposes of clause (a), be the rate of tax determined under this clause." It is evident from section 89 r/w rule 21A that the relief permissible in the case of compensation received ..... X X X X Extracts X X X X X X X X Extracts X X X X
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