2012 (1) TMI 58 - HC - Income Tax

Court Upholds Disallowance of Tax Exemption Under Section 10(10C)

The Court upheld the Tribunal's decision regarding the disallowance of exemption under section 10(10C) of the Income Tax Act, 1961. Relying on previous ... Exemption u/s 10(10C) - ex-gratia payment received under VRS scheme – Revenue contending dis-allowance of exemption on ground that employer itself has not given any exemption U/s.10(10C) to its employees – Held that:- Similar controversy is settled by the two Division Bench decisions of this Court in case of CIT vs Harendra Natah Tripathi and CIT vs Subhash Chand Goyal (2010 -TMI - 208707 - ALLAHABAD HIGH COURT) and their being no decision to the contrary, the present appeal does not raise any question of law which requires to be decided by this Court. Further, relief u/s 89(1) is also admissible in such a case – Decided in favor of assessee. Issues:1. Disallowance of exemption under section 10(10C) of the Income Tax Act, 1961.Analysis:The appeal was filed against the order passed by the Income Tax Appellate Tribunal regarding the disallowance of exemption under section 10(10C) of the Income Tax Act, 1961. The respondent, a bank employee who took voluntary retirement under a scheme floated by the bank, received a lump sum ex-gratia payment. The employee claimed Rs. 5 lakhs as exemption under section 10(10C) of the Act. However, the Assessing Officer did not allow the exemption. The Commissioner of Income Tax (Appeals) II Kanpur allowed the appeal, but the Revenue appealed to the Tribunal. The Tribunal, in its order dated 27.06.2008, dismissed the appeal.During the hearing, the Court considered a similar controversy that arose in previous cases. In the case of Commissioner of Income Tax Versus Harendra Nath Tripathi and Commissioner of Income Tax Versus Subhash Chand Goyal, the Court held that relief under section 89(1) of the Act is admissible in such cases. The counsel for the Revenue could not provide any distinguishing feature to warrant a different view. Therefore, the Court, following the precedent set by the previous decisions, concluded that the present appeal did not raise any new question of law that required its intervention. As a result, the appeal was dismissed.In summary, the Court upheld the decision of the Tribunal regarding the disallowance of exemption under section 10(10C) of the Income Tax Act, 1961. The Court relied on previous judgments to support its decision and found no reason to deviate from the established legal position. The appeal was dismissed based on the settled legal principles established by the Division Bench decisions of the Court.