Law:

Section:

Section 89, read with sections 17 and 10(10C) of the Income-tax Act, 1961 - Salary - Relief available when salary is paid in arrears or in advance - Assessment year 2001-02 - Whether word 'termination' of service is used in section 17(3)(i) in a liberal sense so as to include all categories of cases, such as voluntary retirement, superannuation, compulsory retirement, resignation, dismissal and so on - Held, yes - Whether, compensation amount received by employees under voluntary retirement scheme is entitled to relief under section 89(1) read with section 17(3)(i) over and above exemption granted under section 10(10C)(viii) - Held, yes FACTS In the instant petition, the question to be decided was whether the voluntary retirement from service would fall under the term 'termination of employment' within the meaning of section 17(3) and whether ex gratia compensation received by the assessee on their voluntary retirement as per the voluntary retirement scheme is entitled to relief under section 89(1) after the grant of exemption under section 10(10C)(viii). HELD Provisions contained in Chapter VIII deal with rebates and reliefs which are beneficial provisions applicable to employees or persons in service. Courts strongly lean against construction which reduces the statute to a futility and when two interpretations of a taxing statute are possible, the one in favour of the assessee has to be accepted and the Courts should give effect to the purpose and object of the said provision. Status of an employee whose service has been terminated by way of disciplinary proceedings cannot be on a higher pedestal than a person who took voluntary retirement. Compensation received by an employee by way of termination of service would get the benefit of section 89(1), then why the benefit be not extended to employees who receive compensation by way of voluntary retirement. Literally termination means ending, consequence of the same, is that the employee ceases to be in employment either by way of disciplinary proceeding or by availing the benefit of voluntary retirement scheme. [Para 10] Termination of employment may be due to various reasons; by way of resignation, dismissal,…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492