Law:

Section:

Rule 8 of part a of fourth schedule to the Income-tax Act, 1961 Recognised provident funds Exclusion of accumulated balance from total income After seven months' service, assessee's services lent to another company Assessee returned to parent company after seven and a half years and stayed for two and a half years before resigning ITO declined relief under rule 8 on accumulated balances AAC and tribunal granted relief holding that resignation was beyond assessee's control Whether tribunal justified in law Held, on facts, yes Facts K joined XY Ltd., Calcutta on 5-02-1957. According to service agreement dated 20-12-1956, the assessee was to serve employers for three years and nine months from the date of his arrival. His services were lent to a Burma company on and from 1-09-1957. He joined the parent company on 22-02-1965. He resigned on 15-07-1967 fearing termination of his services due to policy of Indianisation. He was, however, paid salary up to April 1968. The ITO treated the contribution by the parent company to assessee's provident fund account from 1-09-1957 to 21-02-1965 as ex gratia payment and declined to grant relief under rule 8 of Part A of the Fourth Schedule. Before the AAC, the assessee produced a letter dated 23-08-1967 from the last employer giving an option to the assessee either to resign or face termination of services. The AAC accepted the plea that the resignation was beyond assessee's control and gave requisite relief. The Tribunal upheld the AAC's order. On reference: Held 1. The Tribunal found the employer's said letter dated 23-08-1967 bona fide and not for any ulterior purpose aimed at helping the assessee. It also found that the assessee's resignation was for reasons beyond his control. 2. On the basis of the above findings of fact, the Tribunal correctly applied the provisions of rule 8. IT REFERENCE NO. 702 OF 1972. Judgment MITRA, CJ.-In this reference under section 256(1) of the Income-tax Act, 1961, the respondent is not appearing. We requested Mr. R.N. Bajoria to appear as amicus curiae. We are grateful to him and to his learned junior Mr. Samir Chakraborty for the assistance they have given to us. 2. The assessment year is…

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