N G Gangadevi Vs CIT (Kerala High Court)
The Kerala High Court has dismissed an income tax appeal, ruling that an Exit Option Scheme (EOS) for a bank employee did not meet the stringent criteria for a Voluntary Retirement Scheme (VRS) under Section 10(10C) of the Income Tax Act, 1961. The court’s decision affirms the concurrent findings of the lower tax authorities, which had denied an exemption on the grounds that the scheme failed to comply with the specific conditions laid out in Rule 2BA of the Income Tax Rules.
The case involves N G Gangadevi, a former employee of the State Bank of Travancore. For the assessment year 2007-2008, she received an amount of Rs. 10,25,690 under the EOS. In her initial income tax return, she claimed an exemption of Rs. 5,00,000 under Section 10(10C). This exemption was initially processed and granted. However, after the assessee filed a revised return, the Assessing Authority re-examined the matter and discovered that the exemption had been erroneously allowed.
The authority subsequently reopened the assessment under Section 147, leading to a fresh demand for the tax due on the amount. The assessee’s appeals to the First Appellate Authority and the Income Tax Appellate Tribunal were both unsuccessful, leading her to file this appeal with the High Court.
