COMMISSIONER OF INCOME TAX Vs. K VENKATESAN

JUDGEMENT

(1.) IN this appeal, the revenue assails the order of the Tribunal granting the relief of deduction under section 10(10C) of the Income Tax Act, 1961 to the assessee, who has severed his service connection from their employer - the Reserve Bank of India, under a scheme framed in the year 2003 called 'Optional Early Retirement Scheme (OERS) 2003'.

(2.) THE assessee was an employee of Reserve Bank of India and has during the year retired under the Optional Early Retirement Scheme floated by the Reserve Bank of India. The assessee in his return of income for the assessment year 2000 -2005, has claimed exemption under Section 10(10C), out of the compensation received under the said Scheme. On a perusal of the Form 16 submitted by the assessee along with the return, it is seen that the employer has not deducted the exemption claimed under Section 10(10C) on the compensation received under OERS, but has duly deducted the tax, treating the compensation as fully taxable and remitted to the Government account. The assessee while filing the return has made a claim under Section 10(10C) independently, outside form 16, in the computation sheet attached to the return and claimed a refund. The assessing officer disallowed the claim of the assessee as the scheme which was adopted by the assessee was not in consonance with the rules prescribed under Rule 2BA of the Income Tax Act. Aggrieved by the said order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who upheld the order of the assessing office and dismissed the appeal. The assessee preferred an appeal to the Income Tax Appellate Tribunal, which allowed the appeal following the decision of this Court in the case of VAISHALI A SHELAL AND OTHERS in I.T.A.No.6384/MDS/06. The correctness of the said order is canvassed by the appellant in this present appeal by raising the following questions of law:

(3.) LEARNED counsel appearing for the revenue submits that the issue involved in this appeal is covered by a decision of this Court dated 25.2.2008 in T.C.No.101 of 2008 in favour of the Revenue.