ORDER
Manmohan Sarin, J.
1. Appellant has preferred this Letters Patent Appeal against the judgment and order dated 15.9.1996, by which the learned Single Judge dismissed Civil Writ Petition No.820/95, filed by the appellant, seeking a mandamus to the respondents for release of Rs.84,000/- deducted as income tax from the amount paid to the appellant under the Voluntary Retirement Scheme.
2. Facts relevant for the purposes of this appeal may be briefly noted:
(i) Appellant was employed with the Tata Iron & Steel Co. (hereinafter referred to as ‘TISCO’) at Jamshedpur. He took voluntary retirement on 25.7.1992 under a Voluntary Retirement Scheme. Appellant’s request for voluntary retirement was accepted by TISCO on 23.7.1992, to be effective from the afternoon of 25.7.1992. Appellant received Rs. 3,14,336.70 as retiral benefits under the Scheme, but after deduction of Rs. 84,000/- as
income tax.
(ii) Appellant claimed that the amounts payable to him under the Voluntary Retirement Scheme were exempt from income tax and, hence, the amount of Rs. 84,000/- was not liable to be deducted. He relies on Section 10(10-C) of the Income Tax, 1961 Act which was added by the Finance Act of 1992, whereby income tax exemption was given upto Rs. 5,00,000/- for amounts payable under
approved Voluntary Retirement Schemes.
(iii) Appellant had sought refund of Rs. 84,000/- from the respondents. Respondents declined the request of the appellant and contended that income tax was liable to be deducted as the appellant was not entitled to exemption from income tax under the Voluntary Retirement Scheme under which the appellant retired.
3. The learned Single Judge dismissed the writ petition filed by the appellant, holding that the essential requirement under Section 10(10-C), of the Scheme being an approved one, was not satisfied and, hence, the benefit of exemption from payment of income tax could not be availed.
It would be worthwhile at this stage to reproduce Section 10(10-C) of the Income Tax Act, 1961:
Section 10(10C):
any amount received by an employee of _
(i) a public sector company; or
(ii) any other company; or
(iii) an authority established under a Central, State or Provincial Act;
or
(iv) a local authority; or
(v) a cooperative society; or
(vi) a university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under Section 3 of the University Grants Commission Act, 1956 (3 of 1956); or
(vii) an Indian Institute of Technology within the meaning of clause (g) of Section 3 of the Institutes of Technology Act, 1961 (59 of 1961); or
(viii) such institute of management as the Central Government may, by notification in the Official Gazette, specify in this behalf,
at the time of his voluntary retirement, in accordance with any scheme or schemes of voluntary retirement, to the extent such amount does not exceed five lakh rupees;
Provided that the schemes of the said companies or authorities or societies or universities or the Institutes referred to in subclauses (vii) and (viii), as the case may be, governing the payment of such amount are framed in accordance with such guidelines (including inter alia criteria of economic viability) as may be prescribed and such schemes in relation to companies referred to in sub-clause (ii) (or cooperative societies referred to in sub-clause 9 (v) are approved by the Chief Commissioner or, as the case may be, Director-General in this behalf:
Provided further that where exemption has been allowed to an employee under this clause for any assessment year, no exemption thereunder shall be allowed to him in relation to any other assessment year;
It would be seen that in terms of the above Section the amount received by an employee on voluntary retirement from a public sector company, upto a sum of Rs.5.0 lacs, would be exempt from income tax, subject to the said amount being paid under an approved voluntary retirement scheme.
4. Learned counsel for the appellant urged before us that Section 10(10-C) of the Act was made effective from 18.8.1992. Guidelines had been issued in the form of Rule 2-B(A) stipulating the requirements which the Voluntary Retirement Scheme must meet for exemption from income tax. It is urged that the benefit was also extended to employees who had taken voluntary retirement between 1.4.1992 to 18.8.1992. Learned counsel, therefore, urged that appellant could not be made to suffer on account of any delay on the part of the employers in formulating a scheme to meet the requirements of Section 10(10-C) and the rules framed thereunder.
5. Learned counsel for the appellant also relies on a Board circular answering a query with regard to the guidelines, which reads as under:
“4. The Board have received a number of queries with reference to these guidelines. These are clarified as under:
Question 1. As rule 2B(A) regarding guidelines for the purposes of Section 10(10-C) has come into force with effect from
18.8.1992 whether the payments made under the schemes of voluntary retirement between Ist April to 18th August, 1992 will get the benefit of income tax exemption?
Answer: The provisions of Section 10(10-C) of the Income tax Act have been amended through Finance Act, 1992, with effect from 1.4.1993. Accordingly, the amended provisions will apply in relation to assessment year 1993-94 and subsequent years. Though the rule containing the guidelines for the purposes of Section 10(10-C) came into force with effect from 18.8.1992, the payments received between 1.4.1992 and 18.8.1992 by the retiring employees of a company under the voluntary retirement scheme will also be entitled for income tax exemption under Section 10(10-C) of the Income tax Act, provided the voluntary retirement scheme is in accordance with the guidelines contained in the said rule and satisfies the conditions laid down in the section.”
The above clarification would also not advance the appellant’s case as it itself recognises that the voluntary retirement scheme must satisfy the conditions laid down under Section 10(10-C) of the Act, viz. the Scheme being an approved one.
6. We find from the record that appellant’s request for voluntary retirement had been accepted on 23.7.1992, and he was relieved with effect from 25.7.1992. It is also the admitted position that in the instant case the employers of the appellant sought approval of the Voluntary Retirement Scheme only on 3.11.1993. The said Scheme was approved on 18.11.1993. Copy of the approval of the Scheme has been produced before us. It is seen from the approval order that the Scheme was approved operative from 16.11.1993 till 31.3.1994. Thus, it is clear that the appellant’s retirement and
payments received by him were not under an approved Scheme, which is a sine qua non for availing the exemption under Section 10(10-C) of the Income Tax Act.
7. The appeal has no merit and is dismissed.
