Section 89(1) relief remains available for salary arrears even where voluntary retirement compensation is exempt under section 10(10C).

Relief under section 89(1) was allowed on arrears of salary received after voluntary retirement, because exemption for voluntary retirement compensation under section 10(10C) does not bar a separate claim for tax relief on salary arrears. The Tribunal relied on its earlier decision on similar facts and accepted that the claim was supported by Form 10E, with the quantum of relief not in dispute. The adverse finding of the lower authority was reversed, and the assessee's claim was upheld.

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Issues: Whether relief under section 89(1) of the Income-tax Act, 1961 was admissible on arrears of salary received along with voluntary retirement compensation, and whether the denial of such relief by the lower authority was sustainable.

Analysis: The assessee had received arrears of salary in addition to voluntary retirement compensation on termination of services under a voluntary retirement arrangement. The Tribunal followed its earlier decision on similar facts and held that exemption under section 10(10C) for voluntary retirement compensation does not bar a separate claim for relief under section 89(1) in respect of arrears of salary. The claim was supported by the filed Form 10E and the quantum of relief was not in dispute.

Conclusion: Relief under section 89(1) was held to be allowable, and the adverse finding of the lower authority was reversed in favour of the assessee.

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