Law:

Section:

Assessee, employee of nationalised bank, who has opted for voluntary retirement from service under scheme floated by bank and received pension, gratuity, ex-gratia payment etc., is entitled to exemption under section 10(10C) and also relief under section 89(1) Section 89, read with sections 10(10C) and 17(3), of the Income-tax Act, 1961 - Salary - Relief when salary is paid in arrears or in advance - Assessment year 2001-02 - Assessee- employee of nationalised bank, pursuant to voluntary retirement scheme floated by bank, received apart from gratuity/pension, ex gratia amount - Assessee claimed exemption to extent of Rs. 5 lakhs received under section 10(10C) and also relief under section 89(1) in respect of amount received in excess of Rs. 5 lakhs - Assessing Officer denied relief under section 89(1) on ground that once assessee had availed benefit under section 10(10C) in respect of amount of Rs. 5 lakhs, he was not entitled to benefit of spread-over in respect of amount received in excess of Rs. 5 lakhs under section 89(1) - Whether second proviso to section 10(10C) will not bar assessee to claim relief under section 89(1) on amount received by way of compensation on voluntary retirement from service - Held, yes - Whether since amount received by assessee under voluntary retirement scheme after exempted income under section 10(10C) was compensation received in connection with termination of his employment within meaning of section 17(3)(i), assessee was not only entitled to benefit of exemption under section 10(10C) to extent prescribed in provision itself but was also entitled to relief under section 89(1) - Held, yes FACTS The assessee was an employee of nationalised bank. Pursuant to introduction of a voluntary retirement scheme by the bank, the assessee had opted for voluntary retirement from the service of the bank. After accepting the offer so made, the bank had retired the assessee from service and paid apart from gratuity, pension, the ex gratia amount offered under the scheme. In the return, the assessee had claimed exemption to the extent of Rs. 5 lakhs received under the scheme from his employer under section 10(10C) and also relief under section…

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