B VASANTHA MADHAVA vs. STATE BANK OF INDIA

I IN THE HIGH COURT OF KARNATAKA, CIRCUIT BENCH AT DHARWAD DATED THIS THE 8TH DAY OF MARCH, 2012, BEFORE: THE HON’BLE MR. JUSTICE N.K, PATIL W.P,NO.9220 OF 2007(5-Ri BETWEEN B.Vasantha, Madhava Aged about 54 years, Earlier working as Branch Manager, State Bank of India, Kamalapuram, Dist: Bellary, Now R/o Sri.Harikrupa, 1st Cross, Near Income Tax Office, M.Joragar, Hospet. Petitioner (By Shri R.M,Kulkarni & Smt.Hemalekha.K.S, Advocates) AND: 1. State Bank of India, A body Constituted under the Provisions of State Bank of India Act, 1955, Represented by its Deputy General Manager, Zonal Office, Personnel Section No.65, St. Marks Road, Bangalore-560001. 2. Central Board of Direct Taxes, ARA Centre, E2 Jandevalan Extension, New Delhi —110055,

Represented by its Chairman. 3. Income Tax Officer(TDS), HMT Building, Bellarv Road, Bangalore-56000 1. Respondents (By Shri V.Y.Kumar, Adv. for Ri; Shri N.V.Yaji, Adv. for R4; Shri P.H.Gotkhindi, HCGP for R2 & R3) **** This Writ Petition is filed under Articles 226 & 227 of the Constitution of India Praying to direct the Respondents to make full payment of ex-gratia payable to the petitioner pursuant to their voluntary retirement under the Exit Option scheme without any deduction or recovery as tax deduction at source towards income tax on the said ex-gratia amount except after granting relief under Sections 10 (10-C) and 89(1) of the Income Tax Act, 1961 and etc. This Writ petition coming on for Preliminary Hearing in ‘B’ Group this day, the Court made the following: ORDER Petitioner in this petition has sought for a direction, directing the respondents to make full payment of ex-gratia payable to the petitioner pursuant to their voluntary retirement under the Exit Option scheme without any deduction or recovery as tax deduction at source towards income tax on the said ex /

3 gratia amount except after granting relief under Sections 10 (10-C) and 89(1) of the Income Tax Act, 1961. 2. The first respondent - Bank, by its Master Circular -42, notified Exit Option Scheme on 29th April 2005, approved by the Central Board of Directors of the Bank in its meetings held on 26th December 2002 and 24th March 2005. Eligibility to avail the benefits of the scheme was restricted to officers in middle management grade scale - III. The Bank has issued certain clarifications to the Exist Option Scheme on 30th April 2005. Further, the Bank has notified the modified Exit Option Scheme on 15th September 2005, on the review undertaken by the Executive Committee of the Central Board of Directors of the Bank, in its meeting on 10th September 2005 and made applicable to all officers irrespective of the scale. Under the Scheme the officers are eligible to receive an ex-gratia payment of salary as drawn for 50% of service remaining up to the age of 60

4 years subject to a maximum of 36 months. The petitioner finding themselves to seek voluntary retirement under the scheme, exercised option to retire on various dates. On 16th December 2006, the Bank has accepted the application of the petitioner for voluntary retirement under the Scheme with effect from 3Qth April 2007. The petitioner came to know that the Bank is deducting income tax on the ex-gratia amount and in fact, deducted the same from the amount paid to the petitioner. When the petitioner brought to the notice of the authorities the judgment of this Court reported in ILR 2005 Kar.5906, petitioner urged that no amount need be deducted towards income on ex-gratia amount. Since the Bank proceeded to deduct income on the ex-gratia amount payable to the petitioner under the Scheme, petitioner has approached this Court, by presenting this petition. 3. When this matter had come up for preliminary hearing, only notice was issued to respondents and no

interim order as such was obtained nor granted any directions to the respondents. It is the case of the petitioner at the outset that when he came to know about the income tax deducted from the ex-gratia amount payable to him, he has straightaway come up before this Court by presenting this petition. 4. Therefore, it would suffice for this Court if appropriate direction is issued to the petitioner to submit his detailed representation along with credible documents including the order passed by this Court reported in ILR 2005 Page.5906 to the respondent Bank and direct the respondents to consider the same. 5. In the light of the discussion made above, the writ petition filed by petitioner is disposed of, permitting the petitioner to give his detailed representation, along with credible documents, including the order passed by this Court reported in ILR 2005 P.5906 to the respondent Bank, within a period of three weeks from the date of receipt of a copy of this order.

6 In case such representation is submitted by petitioner within the stipulated time, as above, the respondent Bank shall receive the same and pass appropriate order and dispose of the same, as expeditiously as possible. Sd& 3j3DG BMV*