GYANESH CHANDRA SRIVASTAVA ,JAIPUR vs. ITO WARD 1(3) , JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR

Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k
BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No.1516/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2018-19

Gyanesh Chandra Srivastava
M-804,
8th
LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AVOPS3517K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Ashok Kumar Gupta, Advocate.
jktLo dh vksjls@Revenue by : Mrs. Swapnil Parihar, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 24/02/2025
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 20/05/2025

vkns'k@ORDER

PER: DR. S. SEETHALAKSHMI, J.M.

This is an appeal filed by the assessee against the order of ld. CIT(A),
National Faceless Appeal Centre (NFAC) Delhi dated 09.12.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2018-19. The assessee has raised the following grounds of appeal :-
“1. Under the facts and circumstances of the case Ld. CITA(A) grossly erred in confirming the invalid and illegal action of Ld. AO while complete assessment proceeding including initiation is illegal, invalid and without juri iction and barred by limitation hence may kindly be quashed.

2
Shri Gyanesh Chandra Srivastava, Jaipur.

Refer Judgments;
(i)
Sh. SurendraLaadVs. ITO Ward-2(2), Kota (Rajasthan) through ITA No.
128/JP/2022A.Y. 2018-19. (ii)
CIT Vs. Hindustan Photo Film Worker Welfare Centre &Ors. (2021) 207 DTR
253 (PB 29-32) Madras HC. (01/07/2021).

3
Shri Gyanesh Chandra Srivastava, Jaipur.

assessment under the E-assessment Scheme, 2019 on the issue of (i) Salary Income and (ii) Refund Claim. Accordingly, a notice under section 143(2) was issued and served through e-filing account of the assessee on 28.09.2019. Thereafter, notices under section 142(1) of Income Tax Act, 1961 along with questionnaires were issued to the assessee and the assessee filed the reply. Subsequently the assessee was issued a Show Cause Notice (SCN) on 08.04.2021 proposing an addition of Rs. 41,23,490/-, and in compliance, the assessee filed his reply on 10.04.2021. The assessee in his return had claimed an amount of Rs. 41,23,490/- as exempt after claiming exemption of Rs. 5,00,000/- treating it as compensation on retrenchment.
The AO also held the same as amount received on VRS. Therefore, the AO held that the receipt in the hands of the assessee was a package not a compensation for a closure of the Instrumentation Limited, Kota Unit. The AO held that the assessee was allowed exemption upto Rs. 5,00,000/- only and the balance amount of Rs.
41,23,490/- was taxable and therefore, it was added to the income of the assessee vide assessment order dated 13.04.2021 passed under section 143(3) of the I.T.
Act, 1961. Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A), who after considering the submissions of the assessee and the assessment order, dismissed the appeal of the assessee.

Now the assessee has preferred the appeal before the Tribunal on the grounds reproduced hereinabove.

4
Shri Gyanesh Chandra Srivastava, Jaipur.

“WRITTEN SUBMISSION
Ground No. 3 & 4
Apropos to these grounds it is pertinent to mention that the assessee was employee of a Government of India enterprise Instrumentation Limited, Kota
Unit (PSU) during the year under consideration and relieved from the regular service on 18/04/2017 due to closer of Unit.
That the Instrumentation Ltd. was having two Unit in the Country one in Palakkad and other in Kota, due to facing losses since long time the Government has decided to close down the Kota Unit and transfer the Palakkad unit to the Kerela
Government.
At the time of closure of the Kota unit, the assessee has been provided with retirement benefits such as VR Ex-gratia, EL Encashment and Gratuity by Instrumentation Ltd. and the details of amount received by the assesse and how he dealt through his ITR for that year, have been summarized in tabular to the Ld.
AO during the assessment proceedings which are as follows:
Description
Amount
Exempted
Tax
Computation
Remark
Salary, arrear etc
4,65,205
-
4,65,205
-
VRS/VSS
Compensation/
Ex
Gratia
46,23,490
46,23,490
0
Section 10(10B) of income tax act, retrenchment compensation received due to closure of the unit duly approved by GOI which is fully exempted under the said section.
EL Encashment
13,06,200
3,00,000
10,06,200
As per section 10(10AA)
[EL

5
Shri Gyanesh Chandra Srivastava, Jaipur.

encashment].
Gratuity
10,00,000
10,00,000
00
u/s 10(10) [Death cum retirement gratuity received].
Income from other sources
4,37,082
00
4,37,082

That the asseesse claimed the amount of Rs 46,23,490/- as retrenchment compensation which was exempted under section 10(10B) of the income tax act
1961 (as shown in the above table) in the income tax return but the Ld. AO has been alleged that the amount as received by the assessee is an Ex Gratia payment received on VRS/VSS which allowed the exemption uptoRs. 5,00,000/- as per the section 10(10C) of Income Tax Act, 1961 and made the addition of Rs.
41,23,490/-.
Further against the order of the Ld. AO the assessee approached the CIT(A) and the CIT(A) passed the order dated 09/12/2024in agreement with the decision of the Ld. AO.
It this connection we submit that the Ld. AO as well as Ld. CIT(A) was not justified in making the addition of Rs. 41,23,490/- by considering it as VR
Exgratia payment received on VRS/VSS after giving exemption upto 5,00,000/- as per section 10(10C), while, the same should have been fully exempted under section 10(10B) as retrenchment compensation therefore such Addition of Rs.
41,23,490/- should be declared bad in law and be deleted in toto.
The only issue in the present case is whether the amount of Rs.46,23,490/- received by the assessee on closure of Kota unit of IL is retrenchment compensation or an ex gratia payment received on VRS/VSS.
From the facts of the case it is clear that assessee has no option but to leave the company as the Government of India in the cabinet meeting held on 30.11.2016
decided to close down the Kota unit of IL and transfer the Palakkad unit to the Government of Kerala. And Section 10(10B) read with Explanation (a) to section 10(10B) provides that compensation received by a workman at the time of the closing down of the undertaking in which he is employed shall be deemed to be compensation receivedat thetime ofhis retrenchmentand such compensation would be exempt.

6
Shri Gyanesh Chandra Srivastava, Jaipur.

However the Ld. AO observed in the assessment order that :-
“5. For exemption of income under VRS/VSS package, an approval letter of Central Govt. under 2nd Proviso of Sec.10(10B) is required, and without the approval letter the benefit of the provision is not permitted. The receipt was clearly mentioned as the package under VRS/VSS not compensation for retrenchment. In the course of assessment proceedings, the assessee contended his case and claimed that due to retrenchment the 2nd provision of Sec.10(10B) is automatically applicable. However, it is found from the submission that the package given to the assessee was a VRS package and it falls with ambit ofSec.10(10C) and accordingly, taxable if the receipt exceeds the exempted limit. The receipt in the hand of the assessee was a package not a compensation for a closure of the IL Kota Unit. Therefore, the employer of the assessee had rightly complied the provision of Income Tax Act., 1961, and deducted TDS as per Law. Since, the assessee had taken total exemption benefit at Rs.46,23,490/- and as above, he is only allowed upto 5,00,000/- for exemption, and accordingly the different amount of Rs.41,23,490/- is taxable under Income from salary, and the amount of Rs.41,23,490/- is added to the hand of the assessee. Also a penalty proceeding u/s-270A is initiated for under reporting of income”
Pertaining to the above observation of the Ld. AO it is submitted that merely because the scheme was styled as VRS would not mean that the monetary benefits received by assessee due to shut down of the organization in which he was working is an ex gratia payment received on VRS/VSS. One has to see the object and intent behind it. The nomenclature or a description given cannot and should not be allowed to change the true nature of transaction. If the entire facts of the case are analysed, there is no dispute that the compensation is received by the assessee at the time of closing down of Kota unit of IL and therefore, the same is deemed to be compensation received at the time of retrenchment u/s 10(10B).
Section 10(10C) applies only when an employee voluntarily retires from his services. This clause is not applicable as assessee is not taking any voluntarily retirement ratherhe is retrenched from his services on account of closing down of the undertaking. Thus, the compensation received by the employee is on account of retrenchment and not because of voluntarily retirement. Hence, such compensation is exempt u/s 10(10B) and not u/s 10(10C).
To support our contention we are relaying on the decision of the Hon’ble
Juri ictional ITAT, Jaipur Bench in an identical matter of 7
Shri Gyanesh Chandra Srivastava, Jaipur.

(A)
Sh. SurendraLaad V/s ITO Ward 2 (2), Kota(ITA No. 128/JP/2022), wherein the assessee was employee of the same company i.e. Instrumentation Limited,
Kota and the pertains to the same issue of retrenchment compensation.

Hon’ble ITAT held that:-
“12. Considering the facts and circumstances of the case in view of the definition and explanations of Sec 10(10B) and Sec 10(10C), we are of the opinion that the assessee has genuine claim for the compensation received by him within the definition of compensation as per explanation to Sec10(10B). Respectfully following the decision of Hon’ble Madras High Court in case of CIT Vs.
Hindustan Photo Film Workers Welfare Centre &Ors. (supra) are identical fact the assessee grievance is accepted as genuine. Accordingly, the addition of Rs.
26,90,740/- is hereby deleted.”

(B)
Another identical matter of the employee of the same company instrumentation
Ltd, Kota Hon’ble ITAT HYDERABAD held that Gudipati Srinivasa Ratna v/s ITO Ward4(1) ITA No. 10/Hyd/2024 dated
10/04/2024
“8. We have gone through the record in the light of the submissions made on either side. On a perusal of the decision in the case of Sh. Surendra Laad and Ajay
B. Ghosh (supra), we find that the facts in such cases are identical to the facts involved in this case and the view taken by the Co-ordinate Benches of the Tribunal is squarely applicable to the facts of this case.
9. In the case of Shri Surendra Laad (supra), assessee was an employee of M/s.
Instrumentation Ltd., Kota, and on the closure of the said company, he received an amount of Rs. 31,90,740/- from the employer and claimed exemption under section 10(10B) of the Act in respect of such ex gratia received, by treating as compensation at the time of his retrenchment. Learned Assessing Officer declaimed the claim holding that it was an ex gratia payment and not a compensation and the status of the employee was of a VRS employee and not a retrenched. Learned CIT(A) upheld such a finding of the learned Assessing
Officer. When the assessee preferred appeal, the Jaipur Bench of the Tribunal closely scrutinized the explanation of the meaning of retrenchment in the light of sections 10(10B) and 10(10C) of the Act and while applying the law laid down by the Hon'ble Madras High Court in the case of Hindustan Photo Film Workers
Welfare Centre (CITU) (supra) to hold that the assessee had genuine claim for 8
Shri Gyanesh Chandra Srivastava, Jaipur.

compensation received within the definition of 'compensation' as per explanation to section 10(10B) of the Act and allowed the claim of the assessee.
10. In the case of Mr. Ajay B. Ghosh (supra), assessee was an employee of M/s.
AREVA India Pvt. Limited and on the shutting down the business and closure of the unit, the assessee received some amount towards 'severance pay' due to loss of employment from the employer. The claim of the assessee was denied, learned
CIT(A) held that such amount received by the assessee forms part of income under section 17(3)(i) of the Act. In appeal, the Tribunal considered the case of the assessee in the light of the decision of the Hon'ble Calcutta High Court in the case of CIT vs. Ajit Kumar Bose 165 ITR 90 and held that the amount received by the assessee on account of loss of his employment, at the instance of the employer closing down its business operations, is severance pay, whatever may be the nomenclature that is used an partakes the character of capital receipt and not taxable in the hands of the assessee.
11. These two decisions are squarely applicable to the facts of the present case and the amount received by the assessee from the employer for loss of his employment on the closing down of the company partakes the character of capital receipt and not taxable in the hands of the assessee. We, therefore, respectfully following the said decisions cited supra, allow the grounds raised by the assessee.
12. In the result, appeal of the assessee is allowed.”
(C)
Dayal Singh vs. Income-tax Officer [2024] 169 taxmann.com 539
(Chandigarh - Trib.)[03-12-2024]
INCOME TAX :Whereassessee received compensation on voluntary retirement from a loss making Central Government Public Sector Undertaking, since money had been earmarked under budgetary support by Government of India to HMT for payment of outstanding salary/wages and other employee related dues and also for closure of HMT
Tractor Division by offering attractive VRS/VSS, assessee was eligible for exemption under section 10(10B) on whole of amount received
“Section 10(10B) of the Income-tax Act, 1961 - Retrenchment Compensation (Govt.
undertaking) - Assessment year 2017-18 - Assessee received compensation on voluntary retirement from HMT (Tractor Division) which was a loss making Central Government
Public Sector Undertaking - Assessee claimed that entire amount of such compensation was exempt under second proviso to section 10(10B) - Assessing Officer restricted exemption to Rs. 5 lakhs - It was noted that in case of Suresh Pal Chauhan v. Income-tax

9
Shri Gyanesh Chandra Srivastava, Jaipur.

Officer [2023] 154 taxmann.com 529 (Chandigarh - Trib.) , Tribunal held that money had been earmarked under budgetary support by Government of India to HMT for payment of outstanding salary/wages and other employee related dues and also for closure of HMT
Tractor Division by offering attractive VRS/VSS at 2007 notional pay scales and purpose behind this scheme was to rehabilitate employees and meet their financial obligations, therefore, monetary benefit which would accrue to employees was in nature of a compensation, which was pursuant to a decision taken by Government of India specifically for employees of HMT and it undoubtedly would qualify parameters laid down under section 10(10B) - Whether, following same, whole of amount of voluntary retirement compensation received by assessee would be exempted from income-tax under section 10(10B) - Held, yes [Paras 4 and 6] [In favour of assessee]”
(D)
185. In this case also, the Department of Heavy Industry approved the implementation of VRS package for the employees of HPF at 2007 notional pay scales. The Hon’ble High Court after considering the entire scheme and object & intent of the scheme, at para 31 held as under:-
“31. As mentioned above, the Government of India had recommended a scheme to give relief to the employees of HPF. This proposal was approved by the Cabinet Committee on Economic Affairs and such approval was a non-plan budgetary support. The Government of India did not authorise the HPF to bring out a VRS package, but what was approved was a non-plan budgetary support, which is in the nature of a grant given by the Central Government to the second respondent for a specific purpose and a specific reason. The purpose is to rehabilitate the employees of HPF and the reason being that the employees have been receiving the pay scales as of 1987, the increase in the cost of living has made it very difficult for them to survive and meet their financial obligations and the Government thought fit to offer this package to enable the employees to come out of the financial crises. If such was the sanction made by the Central
Government, it undoubtedly would qualify the parameters laid down under sub- section (10B) of Section 10 of the Income Tax Act. This is so because the monetary benefit which will accrue to the employees is in the nature of a compensation, which is pursuant to a decision taken by the Government of India specifically for the employees of HPF. Therefore, the amount would be exempted from income tax in terms of the first proviso under Section 10(10B) of the IT Act.
In terms of clause (2) of first proviso, the ceiling limit is Rs.5,00,000/-. The second proviso states that the first proviso shall not apply in respect of any 10
Shri Gyanesh Chandra Srivastava, Jaipur.

compensation received by a workmen in accordance with any scheme, which the Government may, having regard to the need for extending the special protection to the workmen in the undertaking to which such scheme applies and other relevant circumstances, approve in its behalf. The compensation which is received by the workmen would fall within the definition of compensation found in explanation to Section 10(10B).”
The above decision affirmed by Divisional Bench of Hon’ble Madras High Court in case of CIT Vs. Hindustan Photo Film Workers Welfare Centre &Ors. (2021) 207 DTR 253. Prayer:
In the light of our aforesaid submission and the decision, the addition made by the ld. AO is liable to be deleted.”

11
Shri Gyanesh Chandra Srivastava, Jaipur.

down the Kota Unit of Instrumentation Ltd.and offered Voluntarily Retirement
Scheme (VRS)/Voluntarily Separation Scheme (VSS) to the employees of Kota
Unit of Instrumentation Ltd. Alike Shri Surendra Laad, the present assessee Shri
Gyanesh Chandra Srivastava also opted for VRS/VSS and received the compensation. While deciding the case of Shri Surendra Laad, supra, the observations of the Coordinate Bench of the Tribunal, Jaipur made in para 8 to 12
are reproduced hereunder :-

“8. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The Ld AR for assessee submitted documentary evidence in the compilation of Paper Book containing of 32 pages. The Ld AR for the assessee started his arguments with interesting note of a different case of an individual, who is salaried person and was an employee in M/s
Instrumentation
Ltd.
(IL),
Kota
(A Government of India
Enterprise).The Ld AR for the assessee submitted the company has two units, one at Kota, Rajasthan and another at Palakkad, Kerala.
The said company (M/s Instrumentation Ltd) was in loss since a long period of time and therefore, the Government of India in the cabinet meeting held on 30.11.2016 decided to close down the Kota unit of IL and transfer the Palakkad unit to the Government of Kerala and subsequently notice was issued by the Chairman and Managing
Director for the closure of Kota unit of Instrumentation Ltd as per the guidelines of 07.09.2016 on closure.

12
Shri Gyanesh Chandra Srivastava, Jaipur.

Ministry of heavy industry & public enterprises has intimated vide its letter dated 8th Dec., 2016 the decision of the union cabinet in its meeting held on 30/11/2016 for closure of kota unit of instrumentation limited (IL) and transfer of palakkad unit of IL to the government of kerala in a time bound manner as per DPE guidelines dated
07/09/2016 on closure.
(M.P. Eshwar)
Chairman & Managing Director”
10. The issue raised by the bench is retrenchment compensation on the closure or ex gratia payment received on VRS/VSS from the employer will be covered under section 10(10B) and under section 10(10C)).
We observed that the company M/s Instrumentation Ltd. was in loss since a long period of time and therefore the Government of India in the cabinet meeting held on 30.11.2016 decided to close down the Kota unit of IL and transfer the Palakkad unit to the Government of Kerala. In this case of the assesee has not opted VRS /VSS. offer was given to the assesee by the employer company. The closure of the 13
Shri Gyanesh Chandra Srivastava, Jaipur.

company by offering VRS/VSS Scheme to employees of the Kota
Unit of IL in its letter dated 19.12.2016 is as under:-

“Instrumentation Limited Kota
(Corporate Personnel Department)
IL/CPD/P&R-56/16-17

Dated
19.12.2016
Sub: Closure of Instrumentation Ltd. Kota complex by offering voluntary retirement Scheme (VRS)/ Voluntary Separation
Scheme (VSS) package for its permanent employees who are on rolls of the company.

Ref: DHI’s letter No. 5(1)/2016-PE-VIII dated 8th Dec, 2016

The Department of Heavy Industry, Ministry of Heavy Industry
& Public Enterprises has communicated the approval of proposal of closure of Kota Unit of Instrumentation (IL) including offering of Voluntary Retirement Scheme (VRS)
/Voluntary Separation Scheme (VSS) to employees of the Kota
Unit of IL and in principle approval of transfer of Palakkad
Unit of IL to the Government of Kerala. The approval is as follows:

14
Shri Gyanesh Chandra Srivastava, Jaipur.

Accordingly, VRS/VSS for all the permanent employees who are on the roll of the company is introduced with immediate effect in supersession of earlier Schemes with the approval of the Competent Authority, as “ ONE TIME BENEFIT”. Those employees who apply under the scheme and whose VRS/VSS application is accepted by the Competent Authority will be relieved.

Details of VRS/VSS and procedure are as under:

4 The VRS/VSS compensation/ex-gratia, as well as Gratuity and Leave salary will be calculated as on date of relieving of the employee. This will be calculated on basis pay notionally fixed in 2007 pay scale and paid to the employees separated under 15
Shri Gyanesh Chandra Srivastava, Jaipur.

VRS/VSS. This amount will not be recalculated under any circumstance in future nor will such relieved employees have any right or claim over the same on any future date.

Employees would have to opt for VRS/VSS by 18.01.2017
(Wedne ay) failing which they would be eligible only for retrenchment compensation in accordance with the provisions of the Industrial Disputes Act, 1947(ID Act).

The Unit Heads shall forward the details of the recommended
VRS/VSS applications to AGM (HR & IR), IL, Kota on daily basis for obtaining approval of Competent Authority. AGM (HR
& IR) will forward the approved application to AGM(F&A).

This issues with the approval of the competent authority.

AGM((HR & IR)”

‘retrenchment compensation’. Section 10(10B) of the Income
Tax Act provides exemption towards such retrenchment compensation received by the workman. The exemption provisions of section 10(10B) along with the amount of exemption available thereon is explained in the present article.
Exemption available under section 10(10B) of the Income Tax
Act– Provisions of section 10(10B) exempt any compensation received, at the time of retrenchment, by the workmen under-
The Industrial Disputes Act, 1947, or Any other Act or Rules, any orders or notifications issued there under, or Any standing orders or under any awards, contracts of service or otherwise.
An amount of exemption available under section 10(10B) of the Income Tax Act.
The following amount is available as an exemption under section 10(10B)– 1. The amount of retrenchment compensation received; or 2. The amount specified by the Central
Government (i.e. INR 5 Lakhs); or 3. The amount calculated as per the provisions of section 25F(b) of the Industrial Disputes
Act, 1947 i.e. an amount equal to 15 days average pay for each completed year of the service or part thereof in excess of 6
months. However, it should be noted that the above exemption limit is not applicable in respect of the retrenchment compensation received, by the workman, in accordance with any scheme approved by the Central Government. However, such a scheme should be with regard to the need for extending the special protection to the workman in the undertaking to 17
Shri Gyanesh Chandra Srivastava, Jaipur.

which such scheme applies and other relevant circumstances.
Certain important points about
Exemption towards retrenchment compensation received by workman Section 10(10B)
Any compensation received under following circumstances shall be deemed to have been received at the time of retrenchment and, accordingly, an exemption under section 10(10B) shall be available- Any compensation received by the workman at the time of the closing down of the undertaking. Any compensation received by the workman at the time of transfer of the management or ownership of the undertaking shall be deemed to be compensation received at the time of retrenchment only under the following circumstances-
The new terms and conditions of the service are in any way less favorable to the workman as compared to the terms and conditions immediately before the transfer; or The service of the workman should have been interrupted by such transfer; or The new employer is legally not liable to pay to the workman
(in the event of his retrenchment) compensation on the basis that the service of the workman has been continuous and has not been interrupted by such transfer.

Section 10(10C)

Provisions of section 10(10C)– Provisions of section 10(10C) exempt any compensation received at the time of voluntary retirement or voluntary separation or termination of service provided all the conditions are satisfied- 1. The compensation

18
Shri Gyanesh Chandra Srivastava, Jaipur.

should have been received at the time of voluntary retirement or termination of service. However, in the case of an employee of the public sector company, the compensation should have been received at the time of voluntary separation. 2. The compensation should have been received by the specified categories of an employee (list of the same is provided under the next point). 3. The compensation should have been received in accordance with the scheme of voluntary retirement. In the case of a public sector company, the compensation should have been received in accordance with the scheme of voluntary separation. Categories of employees eligible for exemption under section 10(10C) of the Income Tax Act– Exemption under section 10(10C) is available towards the amount received
(receivable) on voluntary retirement or termination of service by an employee of the following undertaking-

A public sector company, or A local authority, or Any other company, or Any State Government, or The Central
Government, or An authority (established under the Central or State or Provincial Act), or A University incorporated or established by / under a Central or State or Provincial Act, or An Institution acknowledged to be a University under section 3
of the University Grants Commission Act, or An Indian Institute of Technology, or An institution of management as notified by the Central Government, or An institution (having importance throughout India or in any state) as notified by the Central

19
Shri Gyanesh Chandra Srivastava, Jaipur.

Government. The maximum amount of exemption available under section 10(10C) of the Income Tax Act– Lower of the following amount is available as a maximum exemption under section 10(10C)– The actual amount received under voluntary retirement / voluntary separation scheme; or INR 5 Lakhs.
Other noticeable point of section 10(10C) of the Income Tax
Act– If an exemption under section 10(10C) is allowed to the employee in any assessment year, then no exemption shall be allowed to him in any other assessment year. Meaning thereby that the exemption under section 10(10C) is available only once. In case relief under section 89 has been allowed to the employee in respect of any amount received/ receivable on his voluntary retirement/ voluntary separation/ termination of service for any assessment year, then, the exemption under section 10(10C) shall not be allowed to him for any other assessment year. Guidelines prescribed under rule 2BA of the Income Tax Rules- The exemption under section 10(10C) of the Income Tax Act is available only if the voluntary retirement scheme is framed, by the company/ authority/ co-operative society/ university/ institute, satisfying the below criteria prescribed under rule 2BA- 1. The scheme applies to an employee who has either completed 10 years of service or has completed 40 years of age. 2. It should be noted that the above criterion doesn’t apply to the amount received by the employee of a public sector company under the voluntary separation scheme framed by the public sector company. 3. The scheme

20
Shri Gyanesh Chandra Srivastava, Jaipur.

should apply to all the employee, which includes workers and executives of a company or a cooperative society or an authority, except directors of a company or a cooperative society. 4. The voluntary retirement / voluntary separation scheme should have been drawn to result in an overall drop in the current strength of the employees. 5. The vacancy resulted from the voluntary retirement / voluntary separation scheme is not to be filled up. 6. The voluntary retiring employee shall not be employed in another company/ concern belonging to the same management. 7. The amount receivable of the employee under the voluntary retirement / voluntary separation scheme should not exceed- a. The amount equal to 3 months salary for each completed years of service; or b. The amount equal to salary at the time of retirement X balance months of service left before the date of retirement/ superannuation. Please note
‘salary’, as mentioned above, includes basic salary, dearness allowance (if forms part of retirement benefit) and commission based on fixed percentage of turnover.”

assessee grievance is accepted as genuine. Accordingly, the addition of Rs. 26,90,740/- is hereby deleted.”

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 20/05/2025. ¼ jkBkSM+ deys'k t;UrHkkbZ ½

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(RATHOD KAMLESH JAYANTBHAI)

(Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member
Tk;iqj@Jaipur fnukad@Dated:- 20 /05/2025
*Santosh
आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
1. vihykFkhZ@The Appellant- Gyanesh Chandra Srivastava, Jaipur.
2. izR;FkhZ@ The Respondent- ITO, Ward-1(3), Jaipur.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत.
6. xkMZ QkbZy@ Guard File { ITA No. 1516/JPR/2024}

vkns'kkuqlkj@ By order

सहायक पंजीकार@Aेेज. त्महपेजतंत