8/7/2019 Chandra Ranganathan

http://slidepdf.com/reader/full/chandra-ranganathan 1/2

Chandra Ranganathan and Others v. CIT Month-Year :  Nov - 2010 Author/s :  (2010) 326 ITR 49 (SC) [BCAJ] Title :  Chandra Ranganathan and Others v. CIT Details : The appeals before the Supreme Court were directed against the order passed by the High Court inseveral tax appeal cases where the question involved was with regards to the deduction available to theappellants u/s.10(10C) of the Income-tax Act, 1961. The order of the Commissioner of Income-tax(Appeals)-IV, Chennai, relating to the A.Y. 2004-05, was questioned before the Income-tax AppellateTribunal, Chennai Bench, which were disposed of by the Tribunal upholding the claim for deduction madeby the appellants. The same was the subjectmatter of the tax appeal cases before the High Court, whichreferred to the order of the Appellate Tribunal on the basis of letter F. No. 225/74/2005-ITA-II, datedOctober 20, 2005, of the Central Board of Direct Taxes so far as the Reserve Bank of India wasconcerned. The High Court held that having regard to the above letter of the Central Board of Direct Taxes, the amount received by the employees of the RBI opting for Optional Early Retirement Scheme

did not qualify for deduction u/s.10(10C) of the aforesaid Act.During the course of hearing of the appeals, it was brought to the notice of the Supreme Court that bythe subsequent letter dated May 8, 2009, issued by the Central Board of Direct Taxes, it was indicatedthat the matter had been reviewed on the basis of the judgment of the Bombay High Court dated July 4,2008, in the case of CIT v. Koodathil Kallyatan Ambujakshan, (2009) 309 ITR 113 (Bom.); and it washeld that amount received by the retiring employees of the RBI would be eligible for exemption under theaforesaid provisions of the Income-tax Act. On behalf of the Union of India and the Commissioner of Income-tax, the respondent herein, it was submitted that in view of the said Circular, the respondent would allow the benefit of deduction to the appellants u/s.10(10C) of the Income-tax Act, 1961, as far asthe retired employees of the Reserve Bank of India were concerned.

Having regard to the above, the Supreme Court held that the appeals had succeeded and were allowed.The impugned order passed by the High Court was set aside and that of the Tribunal was restored.

8/7/2019 Chandra Ranganathan

http://slidepdf.com/reader/full/chandra-ranganathan 2/2

2010 -TMI - 77682 - SUPREME COURTOther Citation: [2010] 326 ITR 49 (SC)

Chandra Ranganathan Versus Commissioner of Income-tax

Head Note

Exemption- the question involved was with regard to the deduction available to the appellants under section 10(10C) of the Income-tax Act, 1961. Held that- the amount received by retiring employees of theReserve Bank of India opting for the Optional Early Retirement Scheme are eligible for exemption fromincome tax under section 10(10C) of the Income Tax.

 Appeal No. - 6997 to 7002 of 2009

Order / Judgment No. - -

Dated - October 21, 2009

 ALTAMAS KABIR, CYRIAC JOSEPH JJ.

Ms. V. Mohana, Advocate, for the appellants.

Parag Tripathi, Additional Solicitor-General of India (H.R. Rao, C.V. Subba Rao, Ms. Arti Gupta and B.V.Balaram Das, Advocates, with him) for the respondent.

JUDGMENT

1. Leave granted.

2. These appeals are directed against the order passed by the Madras High Court in several tax appealcases where the question involved was with regard to the deduction available to the appellants under section 10(10C) of the Income-tax Act, 1961. The order of the Commissioner (Appeals)-IV, Chennai,relating to the assessment year 2004-05, was questioned before the Income-tax Appellate Tribunal,

Chennai Bench, in I. T. A. No. 986 (Mds)/2007, and other connected appeals, which were disposed of bythe Tribunal upholding the claim for deduction made by the appellants. The same was the subject matter of the tax appeal cases before the Bombay High Court, which refers to the order of the Appellate Tribunalon the basis of letter F. No. 225/74/2005-ITA-II dated October 20, 2005, of the Central Board of DirectTaxes so far as the Reserve Bank of India is concerned. The High Court held that having regard to theabove letter of the Central Board of Direct Taxes, the amount received by the employees of the RBIopting for Optional Early Retirement Scheme do not qualify for deduction under section 10(10C) of theaforesaid Act.

3. During the course of hearing of these appeals, it was brought to our notice that by the subsequentletter dated May 8, 2009, issued by the Central Board of Direct Taxes, it was indicated that the matter hadbeen reviewed on the basis of the judgment of the Bombay High Court dated July 4, 2008, in the case of CIT v. Koodathil Kallyatan Ambujakshan [2009] 309 ITR 113 (Bom) ; [2008] 219 CTR (Bom) 80 ; [2008]

12 DTR 138 and it was held that amounts received by retiring employees of the RBI would be eligible for exemption under the aforesaid provisions of the Income-tax Act. On behalf of the Union of India and theCommissioner of Income-tax, the respondent herein, it was submitted that in view of the said circular, therespondent would allow the benefit of deduction to the appellants under section 10(10C) of the Income-tax Act, 1961, as far as the retired employees of the Reserve Bank of India are concerned.

4. Having regard to the above, the appeals succeed and are allowed. The impugned order passed by theHigh Court is set aside and that of the Tribunal is restored. There will be no order as to costs.