N G Gangadevi vs Commissioner Of Income Tax
2025 Latest Caselaw 227 Ker

Kerala High Court

N G Gangadevi vs Commissioner Of Income Tax on 2 June, 2025

Author: A.K.Jayasankaran Nambiar

Bench: A.K.Jayasankaran Nambiar

ITA NO. 35 OF 2024                  1               2025:KER:38402


                 IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                   PRESENT

          THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                                        &

                     THE HONOURABLE MR. JUSTICE P.M.MANOJ

        MONDAY, THE 2ND DAY OF JUNE 2025 / 12TH JYAISHTA, 1947

                           ITA NO. 35 OF 2024
          AGAINST THE ORDER DATED 28.12.2023 IN SA NO.89 OF 2022 OF
               INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH
APPELLANT/APPELLANT/APPELLANT/ASSESSEE:

              N G GANGADEVI
              AGED 70 YEARS
              W/O SHRI. C N VENUGOPALAN, RESIDING AT 'NANDANAM',
              KESARI JUNCTION, N PARAVUR, ERNAKULAM DIST. KERALA,
              PIN - 683513


              BY ADVS.
              SRI.GEORGE A.CHERIAN
              SRI.GEORGE CHERIAN (SR.)
              SMT.LATHA SUSAN CHERIAN


RESPONDENT/RESPONDENT/RESPONDENT/REVENUE:

              COMMISSIONER OF INCOME TAX
              COMMISSIONER OF INCOME TAX (EXEMPTION) KOCHI CENTRAL
              REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, PIN - 682018

              BY ADV.SRI.JOSE JOSEPH, SC


      THIS INCOME TAX APPEAL HAVING COME UP FOR FINAL HEARING ON
02.06.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 ITA NO. 35 OF 2024                    2                     2025:KER:38402




                                    JUDGMENT

Dr. A.K.Jayasankaran Nambiar, J.

This Income Tax Appeal preferred by the assessee impugns the order

dated 28.12.2023 of the Income Tax Appellate Tribunal, Cochin Bench in ITA

No.996/Coch/2012 & S.A No.89/Coch/2022, pertaining to the assessment year

2007-2008.

2. The brief facts necessary for the disposal of this Income Tax

Appeal are as follows:

The assessee, who was an employee of the State Bank of Travancore

during the year 2006-2007 relevant to the assessment year 2007-2008 opted

for the Exit Option Scheme (E.O.S) formulated by the employer. By way of the

benefits under the E.O.S she received an amount of Rs.10,25,690/- in that year.

The assessee while filing a return of income for the assessment year 2007-

2008, returned an income of Rs.7,37,250/-. The said return of income included

income from salary as also income from house property. The return was

processed under Section 143(1) and a refund (including interest thereon) of

Rs.1,71,330/- was granted to the assessee.

3. It would appear that subsequently a revised return was filed by

the assessee on 14.08.2008 returning an income of Rs.6,88,420/-. The revised

return was processed under Section 143(1) and a demand of Rs.2,25,580/- was ITA NO. 35 OF 2024 3 2025:KER:38402

raised owing to non-allowance of credit for TDS. When the assessee then took

up the matter with the Assessing Authority, the latter on verification of the

returns filed by the assessee found that while processing the return initially

the assessee's claim for exemption under Section 10(10C) of the Income Tax

Act amounting to Rs.5,00,000/- had been allowed. Since the Assessing

Authority found that no Voluntary Retirement Scheme as stipulated under

Section 10 (10C) of the Income Tax Act had been framed by the State Bank of

Travancore where the assessee was employed, and the exemption under

Section 10(10C) had been wrongly allowed, he proceeded to re-open the case

under Section 147 of the Income Tax Act by issuing a notice under Section 148

thereof. The proceedings that ensued resulted in a differential demand being

made on the assessee consequent to dis-allowance of the claim for exemption

under Section 10(10C).

4. Aggrieved by the order of the Assessing Officer, the assessee

preferred an appeal before the First Appellate Authority, which confirmed the

order of the Assessing Officer. A further appeal preferred by the assessee

before the Income Tax Appellate Tribunal culminated in the order impugned in

this appeal, which dismissed the appeal preferred by the assessee. The

assessee is now before us, raising the following substantial questions of law:

i) whether in the Learned Tribunal went wrong in disallowing exemption under Section l0(10C) of the Act?

ii) Has not the I-earned Tribunal went wrong in disallowing the claim which was initially allowed in 2007 and later claimed in 2014?

ITA NO. 35 OF 2024 4 2025:KER:38402

iii) Is not the appellant entitled for exemption under Section l0(10C) of the Act?

5. We have heard the learned Senior counsel Sri.George A Cherian,

assisted by the learned counsel Smt.Latha Susan Cherian and Sri.Jose Joseph

the learned standing counsel for the Income Tax Department.

6. On a consideration of the rival submissions, we find that the

authorities below have clearly found, as a matter of fact, that the Clauses in

the E.O.S framed by the State Bank of Travancore, and on the strength of

which the assessee received the amount of Rs.10,25,690/- mentioned above,

did not strictly conform to the mandate of Rule 2BA of the Income Tax Rules.

The latter statutory provision clearly enumerates the conditions necessary for

a Voluntary Retirement Scheme to qualify for the benefits envisaged under

Section 10(10C) of the Income Tax Act. The distinguishing features in the

E.O.S formulated by the State Bank of Travancore, which did not render it in

conformity with the requirements of Rule 2BA of the Income Tax Rules, have

been clearly brought out in the order of the Assessing Authority and read as

follows:

"i) The objective of the "EOS" (Clause 1) was to provide an exit route to eligible officers in the from Top Executive Grade Special Scale II to Junior Management Grade Scale I to whom the State bank of Travancore (Officers') service Rules are applicable who feel frustrated and demotivated due to lack of career prospects. It is to be noted that the scheme was applicable to only those officers who feel frustrated and demotivated due to lack of promotion and not to all officers in the categories stated above (not to mention 'all employees). As per the requirement (i) ITA NO. 35 OF 2024 5 2025:KER:38402

prescribed in Rule 2BA the V R scheme should apply to all employees, by whatever name called including workers and executives.

(ii) The eligibility criteria specified in the "EOS" (clause

2) were officers who are over 45 years and below 58 years of age as on the date of application and (only) who have not been promoted to the next higher Grade/ Scale after availing one chance and were also superseded by their juniors. As per requirement (ii) prescribed in Rule 2BA all employees who have completed 40 years of age or has completed 10 years of service are eligible for V R S. Thus the eligibility criteria fixed in the "EOS" is markedly different and is not in consonance with the guidelines prescribed under Rule 2BА.

(iii) The ex gratia payable under- "EOS" (Clause 4) was salary last drawn for 50% of service remaining up to the age of 60 years as on the date of exit from bank. This is also not in consonance with the guideline / requirement (vi) regarding the amount receivable on account of voluntary retirement stipulated as 'not exceeding the amount equivalent to three months salary for each completed year of service or salary at the time of retirement multiplied by the balance months of service left before the date of retirement on superannuation'.

(v) As per Clause 12(ii) of the "EOS", an officer who exercises the Exit Option shall not be precluded from taking up assignments in State Bank of India / Other Associates / Subsidiaries / Joint Ventures of the Bank (including office outside India) This clause is in gross violation of the guideline / requirement (v) prescribed in Rule 2BA stipulating that the retiring employee of a company shall not be employed in another company or concern belonging to the same management.

(vi) As per requirement (iii) prescribed under Rule 2BA, the scheme of voluntary retirement or voluntary separation has to be drawn to result in overall reduction in the existing strength of the employees and requirement / guideline (iv) stipulates that the vacancy caused by the voluntary retirement or voluntary separation is not to be filled up.

Clauses to these effect are not seen incorporated in the "EOS' formulated by M/s State Bank of Travancore. "

It was on account of the features of the E.O.S described above, that ITA NO. 35 OF 2024 6 2025:KER:38402

did not render it in conformity with the requirement of Rule 2BA, that the

Assessing Officer, the First Appellate Authority, and thereafter, the Appellate

Tribunal held against the assessee in relation to her claim for an exemption

under Section 10 (10C) of the Income Tax Act. Even before us in this appeal,

there is nothing produced that would suggest that the concurrent findings of

fact by the authorities below were perverse or based on no evidence

whatsoever. Under such circumstances, we find that there is no substantial

question of law that arises for consideration in this appeal since the findings of

all the authorities have been essentially on the facts that obtained in the

instant case. We therefore see no reason to interfere with the impugned order

of the Appellate Tribunal. This Income Tax Appeal fails and is dismissed by

finding that no substantial question of law arises for consideration in the

instant appeal.

Sd/-

DR. A.K.JAYASANKARAN NAMBIAR JUDGE

Sd/-

                                                          P.M.MANOJ
                                                            JUDGE


mns
 ITA NO. 35 OF 2024              7                2025:KER:38402




PETITIONER ANNEXURES

Annexure 1             THE     TRUE     COPY     OF     THE     ORDER

NO.PAN/ABTPG3989LDATED 16.07.2008 FOR THE ASSESSMENT YEAR 2007-2008 ACIT Annexure 2 THE TRUE COPY OF THE NOTICE DATED 14.03.12 NO./COLLN./W-1/ALUVA/ABTPG 3989L FOR THE ASSESSMENT YEAR 2007-2008 Annexure 3 A TRUE COPY OF ORDER ON ITA NO 507/ CHD/2012 DATED 26.7.2012 OF ITAT Annexure 4 THE TRUE COPY OF THE ORDER DATED 17.09.2014 FOR THE ASSESSMENT YEAR 2007-2008NO PAN/GIR ABTPG3989L Annexure 5 THE TRUE COPY OF THE ORDER DATED 10.11.2022 ON PAN ABTPG 3989L FOR THE ASSESSMENT YEAR 2007-2008 Annexure 6 THE TRUE COPY OF THE ORDER DATED 28.12.2023 ON ITA NO. 996/COCH/2022 & SA NO 89/COCH/2022 FOR THE ASSESSMENT YEAR 2007-2008 Annexure 7 THE TRUE COPY OF THE CHALLAN DATED 09.01.2023 ON PAN AB TPG3989L FOR THE ASSESSMENT YEAR 2007-2008.RS.3,42,809.00 Annexure 8 THE SCREEN SHOT OF THE INCOME TAX PORTAL SHOWING THE OUTSTANDING DUES OF RS.2,48,345.00FOR THE ASSESSMENT YEAR 2007-

Annexure 9 A TRUE COPY OF SAID LETTER DATED ON 08.02.2024 PAN.ABTPG3989L FOR THE ASSESSMENT YEAR 2007-2008