TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 777
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....ount paid in a lump sum to the petitioner and not treat them as payable in May 2016; (ii) refund the illegally deducted income tax from the pension of the petitioner with interest @ 18%; (iii) not deduct advance income tax every month from the pension of the petitioner as he is a senior citizen and is enjoying exemption of Section 207 of the I-T Act; (iv) allow costs of litigation at Rs. 50,000/- to the petitioner. 2. The facts of the case are as follows. Facts 3. The petitioner was supposed to retire from the Railway Authorities with effect from November 8, 2007. However, on account of proceedings pending against the petitioner before the Railway Authority, his retirement and pension benefits were withheld. After protracted litigation of several years, in 2016, the petitioner was allowed his pension (less 20% forfeited amount) back-dated with effect from November 8, 2007. Accordingly, Pension Payment Order (PPO) was issued in favour of the petitioner by the Finance Advisor and Chief Accounts Officer and forwarded to the Central Pension Processing Centre (CPPC) of the State Bank of India, Patna. 4. Subsequently, on March 14, 2016, the petitioner submitted an applicati....
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....y provision to spread over/distribute the arrears of pension in making the deduction, which it failed to do. 9. Further, the petitioner submitted that the petitioner, being a senior citizen, was exempted from paying income tax in advance, under Section 207(2) of the I-T Act. Therefore, the deduction of advance tax for the assessment year 2016-17 was riddled with further illegality. 10. On the other hand, it is SBI's case that as per Section 89(1) of the I-T Act, the Assessing Officer of income tax was the only authority that could grant relief under the Section. This is done at the time when the petitioner files his income tax return as per the I-T Act and makes an application under Section 89. In the first place, petitioner was wrong in approaching the SBI for availing the required relief. Moreover, the petitioner already had a remedy to get a refund under Section 237 of the I-T Act, and therefore the present writ petition lacked legal force. Position of Law 11. The relevant provisions of the I-T Act and I-T Rules are produced below. Section 89 Relief when salary, etc., is paid in arrears or in advance. "89. Where an assessee is in receipt of a sum in the nature of sala....
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....sed on the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year. [...] (2A) Where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1), such particulars, in such form and verified in such manner as may be prescribed, and thereupon the person responsible as aforesaid shall compute the relief on the basis of such particulars and take it into account in making the deduction under sub-section (1)." (emphasis supplied) Rule 21AA Furnishing of particulars for claiming relief under section 89(1). "21AA. Where the assessee, being a Government servant or an employee in a [company, co- operative society, local authority, university, institution, association or body], is entitled to relief under sub-section (1) of section 89, he may furnish to the person responsible for making the payment referred to in sub-section (1) of section 192, the ....
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....accordingly, clear in our minds that viewed from any angle, respondent - Ameerjan, the workman is fully entitled to the relief under s. 89 of the I.T. Act. No other view on this point is possible. In order to satisfy the requirements of law, the respondent-Ameerjan shall with the assistance of the appellant and its income-tax consultants make the necessary application to the ITO having jurisdiction in the matter at Bangalore for relief under s. 89 and the officer concerned shall, without further enquiry, grant him immediate relief under s. 89 and dispose of the proceedings within a period of three months from the date of the application, so that the spirit and purpose of our judgment and order would be implemented without unnecessary delay and the agony and torture of unemployment heaped upon the lowly paid respondent-Ameerjan from 1970 be relieved." (emphasis supplied) 18. Similarly, in Sant Raj v. O.P. Singla 1985 2 SCC 345, the petitioner was allowed back wages in lieu of reinstatement by the Hon'ble Apex Court. In the same decision, the Court held that if the employer were to deduct income tax at source on the amount allowed under Section 192, the appellants would be en....
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....icer to avail benefit of the Section. 21. Now, we will deal with Section 192 (2A) of the I-T Act. Per this subsection, an assessee who is entitled to relief under Section 89 can furnish the required forms to the person responsible for making payment under Section 192 (1) (i.e. the employer), upon which the person responsible for making deduction would compute the relief based on the particulars and take it into account while deducting tax. 22. The petitioner placed great reliance on the argument that SBI being the person responsible for making deduction and payment under Section 192, was forwarded with all particulars in the prescribed form (Form No. 10E) under Section 192 (2A). Therefore it became the SBI's obligation to only deduct amounts in accordance with Section 192 (2A). In not doing so, the SBI has made illegal deductions from the petitioners mention and therefore ought to be directed to refund the amount to the petitioner. 23. On a reading of Section 192 (2A), we agree that the SBI should have computed the relief on the basis of the particulars and deducted income tax in accordance with Section 89. However, we see that the remedy of the undue deduction is provided u....