Section 89

Relief in respect of income-tax

Arrears paid under court order - Where arrears of salary are paid under orders of court, the employee would be entitled to relief under  section 89 read with rule 21A - Sant Raj v. O.P. Singla [1987] 163 ITR 588 (SC)/K.C. Joshi v. Union of India [1987] 163 ITR 597 (SC).

Compensation received on resignation is entitled to relief - Termination of service can make place either by resignation or by dismissal or by compulsory retirement or on attaining superannua­tion. That being so, there is no justification to confine the meaning of the word ‘termination’ only to the case of either voluntary retirement or superannuation. Section 89(1) read with section 17(3) are beneficial clauses intended to grant certain benefits to employees or persons in service. Therefore, while placing interpretation on such clauses, the object with which such clauses are provided in the Act must be borne in mind, the object being to grant certain benefit to the person whose service is terminated. Hence, ex gratia compensation  received by an assessee consequent on his resignation is entitled to relief under section 89(1) - CIT v. J. Visalakhsi [1994] 206 ITR 531 (Mad.).

Relief must be claimed before assessing authority and not by way of writ - Where the assessee obtained back wages after his super­annuation, and the employer deducted tax at source at the rate in force, but the assessee would be eligible for refund of tax if spread-over under section 89 was made, and the petitioner filed a writ petition for refund, the assessee is directed to approach the assessing authority and to claim refund in accordance with law, since the employer is not statutorily required to make refund when the amount deducted had already been deposited with the income-tax department. Considering the fact that the assessee has been pursuing a remedy before the wrong forum without being properly advised, it is considered to be just and proper in the interest of justice to order that the delay in filing the refund claim be condoned by the assessing authority if the claim is made within a period of two months from the date of judgment, and it is directed that the assessing authority must not treat the claim as time-barred in view of the peculiar facts and circumstances of the case - Albert Francis Lobo v. Oil India Ltd. [2000] 244 ITR 25 (Gauhati).

Relief is admissible on receipts from VRS - Amount received by an employee at the time of voluntary retirement from service will qualify for relief under section 89 - CIT v. M. Raman [2000] 245 ITR 856 (Mad.).