Judgment

VENKATACHALA, J.:- Appellant in Civil Appeal No. 1969 of 1986, Applicant in C.M.P. No. 7806 of 1987 and Complainant in C.M.P. No. 14358 of 1989 is one and the same person, i.e., O.P. Bhandari - Bhandari, while respondent in them is Indian Tourism Development Corporation Ltd. -I.T.D.C.

2. Bhandari was in the employment of the I.T.D.C. as a Manager of its hotel Ranjit. However, his services were terminated by the I.T.D.C. by its Order dated 18-9-1984. The sustainability of that termination order was questioned in Civil Appeal No. 1969 of 1986 filed by Bhandari in this Court. That appeal was allowed by this Court by its Judgment dated 29-9-1986 (reported in AIR 1987 SC 111 at p. 116). The decretal order thereunder read thus :-

"We, therefore, direct that :

I. The respondent-Corporation shall reinstate the appellant with full back-wages (including usual allowances), or, at its option,

II. The respondent-Corporation shall pay the Income-tax Officer shall on an application to the appellant :-

(1) Salary including usual allowances for the period commencing from the date of termination of his service under the impugned order till the date of payment of compensation equivalent to 333 years salary including usual allowances to him.

(2) Provident Fund amount payable to the appellant and retirement benefits computed as on the date of payment as per clause 1 shall be paid to him within 3 months from the said date.

III. The appellant shall vacate and make over possession of the premises provided to the appellant by the respondent-company before the expiry of 3 months from the date of this order or within one month of the day on which payment under Clause II is made, whichever is later.

lV. Respondent shall pay the costs to the Appellant.

V. Interim order shall stand vacated subject to the direction embodied in Clause III.

VI. Since the amount is being paid in one lump sum, it is likely that the employer may take recourse to Section 192 of the Income-tax Act, 1961 which provides that any person responsible for paying any income chargeable under the head salaries, shall, at the time of payment deduct income-tax on the amount payable at the average rate of income computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year. If, therefore, the employer proceeds to deduct income-tax as provided by Section 192, we would like to make it abundantly clear that the appellant would be entitled to relief under S. 89 of the Income-tax Act which provides that where by reason of any portion of assessees salary being paid in arrears or in advance by reason of his having received in any one financial year salary for more than 12 months or a payment which under the provisions of Clause (3) of S. 17 is a profit in lieu of salary, his income is assessed at a higher rate than that it would otherwise have been assessed, application made to him in this behalf grant such relief as may be prescribed. The prescribed relief is set out in Rule 21-A of the Income-tax Rules. The appellant is entitled to relief under S. 89 because compensation herein awarded includes salary which has been in arrears as also the compensation in lieu of reinstatement and the relief should be given as provided by S. 89 of the Income-tax Act read with Rule 21-A of the Income-tax Rules. The appellant is indisputably entitled to the same. If any application is required to be made, the appellant may submit the same to the competent authority and the Corporation shall, through its Tax Consultant, assist the appellant for obtaining the relief."

3. The I.T.D.C., since exercised the option given to it under the decretal order, of payment of compensation in lieu of reinstatement of Bhandari, Bhandari demanded payment from the I.T.D.C., which according to him was the amount of compensation payable by the I.T.D.C. The I.T.D.C. did not accede to that claim, as according to it the amount of c