R.DHANARAJ vs. THE INCOME TAX OFFICER

Judgt. dt. 23.10.19 in T.C.A.761/19 R.Dhanaraj v. ITO 1/5 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.10.2019 CORAM THE HONOURABLE ACTING CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case (Appeal) No.761 of 2019 Shri.R.Dhanaraj Appellant Vs. The Income Tax Officer, Salary Ward-III(1), 121, Mahatma Gandhi Road, Aayakkar Bhavan, New Block IV Floor, Chennai 600 034. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'C' Bench, Chennai, dated 17.7.2008 made in ITA No.139/Mds/2008. For Appellant : Mr.R.Sivaraman

For Respondent : Mr.Karthik Ranganathan Senior Standing Counsel J U D G M E N T (Delivered by Dr.VINEET KOTHARI, ACJ) This Tax Case Appeal has been filed by the Assessee, calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'C' Bench, Chennai, dated 17.7.2008 made in ITA http://www.judis.nic.in Judgt. dt. 23.10.19 in T.C.A.761/19 R.Dhanaraj v. ITO 2/5 No.139/Mds/2008, for the Assessment Year 2004-2005, by raising the following substantial question of law: "Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the Appellant was not entitled to exemption under Section 10(10C) of the Income Tax Act, 1961 in respect of the amount received under the OERS of the Reserve Bank of India?" 2. The learned counsel appearing for both sides submitted that the controversy is squarely covered by the decision of the Hon'ble Supreme Court in Chandra Ranganathan v. CIT ((2010) 326 ITR 49 (SC)) in which the Hon'ble Supreme Court has held that the amounts received by retired employees of Reserve Bank of India under the Optional Early Retirement Scheme was exempted from Income Tax under Section 10(10C) of the Income Tax Act, 1961. In that Judgment, the Hon'ble Supreme Court had reversed the Judgment of Madras High Court in CIT v. M.Chelladurai ((2009) 317 ITR 370 (Mad)) which Judgment was relied upon by the Tribunal while passing the order on 17th July 2008. 3. The Judgment of the Hon'ble Supreme Court in the case of Chandra Ranganathan (supra) was rendered later on 21st October http://www.judis.nic.in Judgt. dt. 23.10.19 in T.C.A.761/19 R.Dhanaraj v. ITO 3/5 2009. The relevant portion of the Hon'ble Supreme Court is quoted below for ready reference:- "During the course of hearing of these appeals, it was brought to our notice that by the subsequent letter dated May 8, 2009, issued by the Central Board of Direct Taxes, it was indicated that the matter had been reviewed on the basis of the judgment of the Bombay High Court dated July 4, 2008, in the case of CIT v. Koodathil Kallyatan Ambujakshan ((2009) 309 ITR 113 (Bom)) and it was held that amounts received by retiring employees of the RBI would be eligible for exemption under the aforesaid provisions of the Income-tax Act. On behalf of the Union of India and the Commissioner of Income-tax, the respondent herein, it was submitted that in view of the said circular, the respondent would allow the benefit of deduction to the appellants under section 10(10C) of the Income-tax Act, 1961, as far as the retired employees of the Reserve Bank of India are concerned. Having regard to the above, the appeals succeed and are allowed. The impugned order passed by the http://www.judis.nic.in Judgt. dt. 23.10.19 in T.C.A.761/19 R.Dhanaraj v. ITO 4/5 High Court is set aside and that of the Tribunal is restored. There will be no order as to costs." 4. In view of the aforesaid joint submission, the substantial question of law framed has to be answered in favour of the Assessee and against the Revenue in terms of the decision of the Hon'ble Supreme Court. The Appeal is, accordingly, allowed. No costs. (V.K.,ACJ.)(C.S.N.,J) 23.10.2019 Index : Yes/No Internet : Yes/No ssk. To 1. Income Tax Appellate Tribunal, 'C' Bench, Chennai. 2. The Income Tax Officer, Salary Ward-III(1), 121, Mahatma Gandhi Road, Aayakkar Bhavan, New Block IV Floor, Chennai 600 034. http://www.judis.nic.in Judgt. dt. 23.10.19 in T.C.A.761/19 R.Dhanaraj v. ITO 5/5 DR.VINEET KOTHARI, ACJ. and C.SARAVANAN, J. ssk. T.C.(A) No.761/2019 23.10.2019. http://www.judis.nic.in