Law:

Section:

Section 10(10) of the Income-tax Act, 1961, read with section 4 of the Payment of Gratuity Act, 1972 and article 14 of the Constitution of India - Gratuity - Whether section 10(10)(ii) excludes gratuity payable under 1972 Act and by virtue of section 4 of 1972 Act, rate of gratuity payable is only 15 days wages for every year of completed services - Held, yes - Whether cases which are not governed by section 10(10)(ii) and related to other schemes, are governed by section 10(10)(iii) and it excludes gratuity amount up to rate of 15 days' wages for every year of completed services - Held, yes - Whether, therefore, prescribed limit of gratuity which is to be excluded under section 10(10) is same irrespective of whether it is paid under 1972 Act or any other scheme and, therefore, limit of 15 days wages for completed services as prescribed under section 10(10)(iii) is not discriminatory and violative of article 14 - Held, yes P. Ramakrishnan for the Petitioner. P.K. Ravindranatha Menon, George K. George and Antony Dominic for the Respondent. JUDGMENT 1. The first petitioner is the Gwalior Rayons Staff Association, represented by its joint secretary. Second petitioner is a member of staff as also a member of the first petitioner-association. The prayer made in this original petition is to declare that the provisions of section 10(10)(iii) of the IT Act to the extent it has allowed exemption based on the method of calculation as illegal and discriminatory and for other consequential reliefs. 2. It is the case of the petitioners that they are not governed by the Payment of Gratuity Act, 1972, in the matter of payment of gratuity; but are governed by the terms and conditions of the settlement between the employees and the management of Grassim Industries Ltd. It is the contention of the petitioners that as per the settlement between the parties, the employees will be entitled to gratuity at a rate higher than what is prescribed under the Payment of Gratuity Act. In the case of employees whose duration of service is between 5 to 10 years they will be receiving 15 days' salary inclusive of daily allowance, between 10 to 15 years, 20 days' salary inclusive of daily…

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