Parna Vasudevaiah Vs ITO (ITAT Pune)
The Pune Bench of the Income Tax Appellate Tribunal heard the assessee’s appeal against the order dated 12.01.2024 passed by the Commissioner of Income Tax (Appeals)/NFAC for Assessment Year 2019-20. The appeal was a recalled matter and primarily concerned the taxability of the amount received by the assessee under the voluntary retirement scheme introduced by Pfizer Healthcare India Pvt. Ltd. and the denial of relief under Section 89 of the Income-tax Act, 1961.
The assessee, a salaried employee of Pfizer Healthcare India Pvt. Ltd., filed the return of income declaring total income of ₹39,28,780. The case was selected for scrutiny on the issues of large relief claimed under Section 89 and refund claimed. During assessment proceedings, the Assessing Officer noted that the assessee had opted for voluntary retirement under the company’s financial scheme and had received ₹10,20,208 as full and final settlement. The assessee claimed relief under Section 89 treating the amount as advance salary. The Assessing Officer rejected the claim, holding that the amount represented compensation received on voluntary retirement and was taxable as profits in lieu of salary under Section 17(3)(i). The assessment was completed under Section 143(3) by disallowing the relief claimed under Section 89.
