IMPORTANT POINT
The appellant was entitled to claim deduction under Section 10 (10C) (viii) and relief under Section 89 (1) of the Income Tax Act in respect of amounts received in terms of a Voluntary Retirement Scheme.

JUDGMENT :

Gopinath, J.

This writ appeal has been filed challenging the judgment dated 23-11-2020 in W.P (C) No.16955/2013. The appellant was the Writ Petitioner. The brief facts are that the appellant had received certain amounts from his employer (the erstwhile State Bank of Travancore) under a Voluntary Retirement Scheme (VRS). The appellant filed his return of income for the assessment year 2001-2002 claiming deduction under Section 10 (10C) (viii) of the Income Tax Act as well as under the provisions of Section 89 (1) of the Income Tax Act (as it stood then) r/w Section 17 (3) of that Act.

2. The assessing officer appears to have initiated proceedings on the premise that the appellant was not entitled to claim deduction under Section 10 (10 C) (viii) and also under Section 89 (1) of the Act in respect of amounts received as part of VRS. Though it is stated that intimations under Sections 143(1)/154 were issued to the appellant, they are not on record in this Court. The appellant approached the 2nd respondent under Section 264 of the Income Tax Act seeking revision of the orders/intimations through which relief under Section 89(1) was denied to him. This application under Section 264 was rejected by Ext.P1 order dated 31-01-2005. While matter stood thus, on 08-12-2005, a Division Bench of this court in the decision reported as State Bank of India v. Central Board of Direct Taxes; 2006 (1) KLT 258 held that amounts received by employees under a Voluntary Retirement Scheme are entitled to relief under Section 89 (1) in addition to the exemption granted under Section 10 (10C) (viii) and quashed letter/circular No.E.174/5/2001-ITA-I dated 23-04-2001 issued by the Central Boards of Direct Taxes, which held to the contrary. On coming to know of the judgment of the Division Bench the appellant filed an application before the 2nd respondent seeking to rectify Ext.P1 order. Facing recovery proceedings the appellant also paid certain amounts to the Department to satisfy the demand arising out of the denial of relief under Section 89 (1). This court through judgment dated 01-10-2009 in WP(C) No. 26055/2009 directed the 2nd respondent to hear and dispose of the petition filed seeking rectification of Ext.P1 order within a time frame.

3. The 2nd respondent thereafter issued an order rejecting the petition for rectification of Ext.P.1 order finding that though a similar issue arose for adjudication in State Bank of India (supra) the same was not a ground for rectification and also on the ground that the Voluntary Retirement Scheme of the State Bank of India which was considered by this court in State Bank of India (supra) may be different from the voluntary retirement scheme of the State Bank of Travancore from whose service the appellant took voluntary retirement. On being served with Ext.P6 raising a further demand (issued on 22-03-2013) the appellant preferred W.P (C) No.16955/2013. The learned Single Judge after considering the facts and circumstances of the case held that the remedy open to the appellant was to prefer an appeal before the Commissioner of Income Tax (Appeals) under Section 246A of the Income Tax Act and disposed of the writ petition permitting the appellant to file such an appeal and further ordered that if the appeal is filed within a period of 3 weeks from the date of the judgment, the same shall be treated as an appeal filed in time. The appeal, if filed, was directed to be heard and disposed of on merits. Aggrieved by the judgment of the learned Single Judge the appellant has filed the present appeal.

4. We have heard Sri. Leejoy Mathew, the learned counsel appearing for the appellant and Sri. Jose Joseph, learned Standing Counsel appearing for the Income Tax Department.

5. The learned counsel for the appellant would contend that this is a case where the issue stands decided in favour of the appellant by the judgment of a Division Bench of this Court in State Bank of India (supra). He would therefore contend that this