Short Overview of the Case:

Exemption on Receipts under Voluntary Retirement Scheme.

Assessing officer initiated proceedings on premise that Assessee was not entitled to claim deduction under Section 10 (10 C) (viii) and also under Section 89 (1) in respect of amounts received as part of VRS.

Assessee approached PCIT under Section 264 seeking revision of orders/intimations through which relief under Section 89(1) was denied to him.

Division Bench of High court held that amounts received by employees under a Voluntary Retirement Scheme are entitled to relief under Section 89 (1) in addition to exemption granted under Section 10 (10C) (viii).

Assessee filed an application before CIT seeking to rectify order.

PCIT issued an order rejecting petition for rectification of order.

On being served with notice raising a further demand Assessee preferred Writ petition.

Single Judge held that remedy open to Assessee was to prefer an appeal before Commissioner of Income Tax (Appeals) and disposed of writ petition.

Court Held as under:

Assessee admittedly took voluntary retirement in year 2001. He had also claimed deduction under Section 10 (10C) (viii) and relief under Section 89 (1) while filing his return of income for relevant assessment year.

Claim came to be rejected on basis of instructions/letter issued by Central Board of Direct Taxes on 23-04-2001.

It is not disputed that said instructions/letter of Central Board of Direct Taxes has been quashed by this Court.

Still further this Court has, in said decision, categorically declared that amounts received by an employee under a VRS Scheme were entitled to deduction under Section 10 (10C) (viii) and relief under Section 89 (1) simultaneously—That being position entire proceedings initiated against petitioner becomes one without jurisdiction.

When proceedings are found to be without jurisdiction existence of an alternative remedy is not a bar for granting relief under Article 226 of Constitution of India.

It becomes duty to grant relief when convinced that proceedings are without jurisdiction.

Judgment of Single Judge is set aside.

Assessee was entitled to claim deduction under Section 10 (10C) (viii) and relief under Section 89 (1 in respect of amounts received by him under voluntary retirement scheme.

Assesse’ appeal allowed.