IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.7.2007 CORAM THE HON'BLE MR.JUSTICE K.RAVIRAJA PANDIAN AND THE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJA TAX CASE Appeal No.1058 OF 2007 and M.P.No.1 of 2007 The Commissioner of Income Tax, Tiruchirapalli ... Appellant Versus M.Abdul Kareem ... Respondent Prayer: Appeal preferred under Section 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal, C Bench, Chennai dated 30.12.2005 in I.T.A.No.776/Mds/2004 for the assessment year 2001-02 against the order of the Commissioner of Income Tax (Appeals), Trichirapalli in ITA.No.2/2003-04 dated 14.01.2004 for the assessment year 2001-02 against the order of Assistant Commissioner of Income Tax, Circle I, Thanjavur dated 07.02.2004 GIR.No.824-A for the Assessment year 2001- 2002. For Appellant : Mr.T.Ravikumar Standing Counsel for IT JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) This Tax Case Appeal has been filed by the Revenue against the order of the Income-tax Appellate Tribunal, C Bench, Chennai dated 30.12.2005 made in I.T.A.No.776/Mds/2004 for the assessment year 2001-02. The substantial question of law formulated for entertainment of the appeal is as follows:- "Whether in the facts and circumstances of the case, the Tribunal was right in holding that the assessee is eligible to claim simultaneous benefit under Section 10(10C) as well as section 89(1) in respect of the compensation received under the voluntary retirement scheme ?" https://hcservices.ecourts.gov.in/hcservices/ 2. The issue relates to the assessment year 2001-2002. The assessee was an employee of Canara Bank. During the previous year relevant to the assessment year 2001-2002, the assessee retired from service from the Bank under the voluntary retirement scheme. On retirement, the assessee received from the employer bank several retirement dues including exgratia. The exgratia had been worked out by the employer at 60 days salary for each completed year of service or salary for the number of months of service left, which ever was less. Out of the exgratia thus received, the assessee claimed exemption of Rs.5 lakhs. As per the provisions of Section 10(10C) of the Act, the balance exgratia was admitted as income. However, while working out the tax payable on such income, the assessee claimed relief under Section 89(1). 3. The assessing officer rejected the claim of the assessee for the relief under Section 89(1) of the Act and completed the assessment by granting exemption under Section 10(10C) of the Act. Aggrieved over the same, the assessee preferred appeal before the Commissioner of Income-tax (Appeals), which appeal was allowed by the Commissioner of Income-tax (Appeals). Questioning the correctness of the order of the Commissioner of Income-tax (Appeals), the revenue preferred further appeal before the Income-tax Appellate tribunal and the Tribunal dismissed the appeal preferred by the revenue. Aggrieved by the order of the Income-tax Appellate Tribunal, the revenue filed the present appeal under Section 260-A oft he Income-tax Act, 1961. 4. The core contention in the appeal on behalf of the revenue is that the order of the Tribunal holding that the assessee is eligible to claim relief both under Section 10(10C) and 89(1) simultaneously cannot be legally sustainable. When a specific provision has been introduced for grant of exemption of the amounts received under the voluntary retirement scheme, it would no longer be available to the assessee to seek to go under the General Clauses for the amount in excess of the exemption granted. The said provision Section 10(10C) has been introduced only for the benefit of the assessee who opts for voluntary retirement. If the assessee merely sought to treat income as salary, then the only benefit available is under Section 89(1). Then, the assessee would have to pay more amount by way of tax. Section 89(1) provides, where an assessee is in receipt of a sum in the nature of salary, being paid in any financial year of salary for more than twelve months or a payment which under the provisions of clause (3) of section 17 is a profit in lieu of salary, his income is assessed at a higher rate than that at which it would otherwise have been assessed. In view of the above provision, the order of the Tribunal granting the relief to the assessee both under Section 10(1)C) and 89(1) of the Act cannot be legally sustainable. 10. The very issue as to the correctness of granting the relief under Sections 10(10C) and 89(1) to assessee, who voluntarily retired from service, was the subject matter of consideration before the Division https://hcservices.ecourts.gov.in/hcservices/ Bench of this Court in the case of COMMISSIONER OF INCOME-TAX VS. G.V.VENUGOPAL ((2005) 273 ITR 307). In that case, the Division Bench has held that the notions of equity do not apply in taxing statutes. If the assessee is entitled to two different benefits on the plain language of the statute, he has to be granted both those benefits. There are several provisions granting twin or double benefits, while in other provisions, twin or double benefit has been specifically prohibited. There is no prohibition to the twin benefit in respect of the amount received under the voluntary retirement scheme. The relief contemplated under Section 89 (1) of the Act is aimed to mitigate the hardship that may be caused on account of the high incidence of tax due to progressive increase in tax rates and thus held that the benefit under Sections 10(CC) and 89(1) could be granted to the assessees. The judgment squarely answers the issue. Hence, the appeal is dismissed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar To 1.The Assistant Registrar, Income-Tax Appellate Tribunal, "C'Bench, III Floor, Rajaji Bhavan, Besant Nagar, Madras 90 (with records five copies). 2. The Commissioner of Income Tax (Appeals) Tiruchirapalli. 3. The Assistant Commissioner of Income Tax, Cricle I, Thanjavur. 1 cc To Mr.N.Muralikumaran, Advocate, SR.43596. Tax Case (Appeal) No.1058 of 2007 GG(CO) RVL 01.08.2007 https://hcservices.ecourts.gov.in/hcservices/