Thursday, February 12, 2015

[aaykarbhavan] Re: Judgments and Infomration





On Wednesday, 11 February 2015 8:12 AM, Dipak Shah <djshah1944@yahoo.com> wrote:




On Monday, 9 February 2015 5:30 PM, Dipak Shah <djshah1944@yahoo.com> wrote:





Sec. 234E Fine For Late Filing Of TDS Returns is constitutionally valid: Bombay HC

Rashmikant Kundalia vs. UOI (Bombay High Court), WRIT PETITION NO.771 OF 2014, Pronounced On : 09th February, 2015
FACTS OF THE CASE
Petitioners have challenged the constitutional validity of section 234E of the Income Tax Act, 1961. Section 234E seeks to levy a fee of Rs.200/- per day (subject to certain other conditions as set out therein) inter alia on a person who deducts Tax at Source (TDS) and then fails to deliver or cause to be delivered the TDS return/statements to the authorities within the prescribed period.
Petitioner No.1 is a practising Chartered Accountant who has received several notices under section 200A of the Act that were served by the Revenue on his various clients. According to the Petitioners, section 234E is ultra vires and violative of Article 14 of the Constitution of India and therefore deserves to be struck down by this Court. Consequently, even the notices issued by the Revenue ought to be set aside.
CONTENTION OF THE ASSESSEE
To challenge the constitutional validity of section 234E, the main thrust of the argument of the Petitioners was that what was sought to be levied under the said section was a "fee" which necessarily could be levied only for a service that was rendered, failing which the levy of such a fee was unconstitutional. It was argued that a "fee" is known in the commercial and legal world to be a recompense of some service or some special service performed, and it cannot be collected for any dis-service or default. The learned counsel for the Petitioners submitted that by using the word "fee", the Legislature has not stated what is the nature of service being provided for filing the return belatedly. The learned counsel submitted that compensation for dis-service was essentially in the  nature of a penalty, and since the Legislature had categorically termed the levy under section 234E of the Act as a "fee", it necessarily could be levied only in the event the Government was providing any service or any special service. In the absence thereof, the said section seeks to collect tax in the guise of  a fee, was the submission. This, according to the learned counsel, was impermissible either in common law or under the taxing statute, and encroached on the rights of life and liberty of the citizens. In the instant case, it was submitted that the Petitioners were providing a honorary service to the Union of India by deducting the tax of other assessees and therafter depositing the same with the Revenue. In such a situation, they could not be made liable for any delay in filing the TDS return/statements, was the submission.
Apart from the aforesaid argument, it was further submitted that the provisions of section 234E were extremely onerous inasmuch as the Assessing Officer was not vested with any power to condone the delay in filing the TDS return/statements belatedly and there was also no provision of Appeal against any arbitrary order passed by the Assessing Officer under section 234E of the Act.
CONTENTION OF THE REVENUE
On the other hand, the learned Additional Solicitor General appearing on behalf of the Respondents, submitted that TDS is one of the modes of collection of taxes. At the time of making / crediting payment to a payee (the deductee), the payer (the deductor) was required to deduct a certain percentage as and by way of TDS and deposit the same with the tax authorities within the prescribed time period. Thereafter, the deductee got credit of the amount so deducted against his tax liability on the basis of the information furnished by the deductor in the TDS return/statements. He submitted that TDS, as the very name implies, aims at collection of revenue at the very source of income. It is essentially a method of collecting tax which combines the concepts of "pay as you earn" and "collect as it is being earned". Its significance to the Government lies in the fact that it prepones the collection of tax, ensures a regular source of revenue and provides for a greater reach and a wider base for tax. At the same time, to the tax payer, it distributes the incidence of tax and provides for a simple and convenient mode of payment.
Keeping this object in mind, the learned Additional Solicitor General submitted that timely submission of TDS statements containing the details of persons on whose behalf tax is deducted, becomes very crucial because unless and until the Revenue receives the details of the tax deducted (through the TDS statements), timely processing of income tax returns of assessees seeking credit of TDS is not possible. In case the Department goes ahead and processes the income tax return of the assessee without giving credit for TDS due to non-filing of TDS return/statements by the deductor, then the grievance of the deductee would be multiplied in as mush as instead of issuing a refund to the assessee (in a given case), infructuous demands would to be raised. Hence non-filing of the TDS return/statements by the deductor in a timely manner has multitude effects eroding the credibility of an efficient tax administration system, was the submission of the learned Additional Solicitor General.
The learned Additional Solicitor General further submitted that the title of section 234E per se indicates that the section is regarding collection of a fee. This was not a penal provision but a fee for not furnishing the TDS return/statements within the prescribed time frame as the late submission of TDS statements creates additional work for the Income Tax Department. In many cases, due to late submission of the TDS return/statements, the Department has to revise the assessment order already passed in the case of the deductee for determining his correct tax liability. Moreover, in case of an income tax return having a refund claim, the Department has to pay extra interest due to delay in determining the correct amount of refund for want of information of tax deducted, which in turn results in delay of issue of refund. The fee under section 234E is levied to address this additional work burden forced upon the Department by the deductor by not furnishing the information in time which he is statutorily bound to furnish within the prescribed time. The learned Additional Solicitor General submitted that looking at it from this perspective, it cannot be said that section 234E of the Act is either ultra vires the Constitution or in any way violates Article 14 thereof. He therefore submitted that there is no merit in the Petition and the same ought to be dismissed with costs.
HELD BY HIGH COURT
On a perusal of sub-section (1) of section 234E, it is clear that a fee is sought to be levied inter alia on a person who fails to deliver or cause to be delivered the TDS return/statements within the prescribed time in sub-section (3) of section 200. The fee prescribed is Rs.200/- for every day during which the failure continues. Sub-section (2) further stipulates that the amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible as the case may be.
It is not in dispute that as per the existing provisions, a person responsible for deduction of tax (the deductor) is required to furnish periodical quarterly statements containing the details of deduction of tax made during the quarter, by the prescribed due date. Undoubtedly, delay in furnishing of TDS return/statements has a cascading effect. Under the Income Tax Act, there is an obligation on the Income Tax Department to process the income tax returns within the specified period from the date of
filing. The Department cannot accurately process the return on whose behalf tax has been deducted (the deductee) until information of such deductions is furnished by the deductor within the prescribed time. The timely processing of returns is the bedrock of an efficient tax administration system. If the income tax returns, especially having refund claims, are not processed in a timely manner, then (i) a delay occurs in the granting of credit of TDS to the person on whose behalf tax is deducted (the deductee) and consequently leads to delay in issuing refunds to the deductee, or raising of infructuous demands against the deductee; (ii) the confidence of a general taxpayer on the tax administration is eroded; (iii) the late payment of refund affects the Government financially as the Government has to pay interest for delay in granting the refunds; and (iv) the delay in receipt of refunds results into a cash flow crunch, especially for business entities.
We find that the Legislature took note of the fact that a substantial number of deductors were not furnishing their TDS retun/statements within the prescribed time frame which was absolutely essential. This led to an additional work burden upon the Department due to the fault of the deductor by not furnishing the information in time and which he was statutorily bound to furnish. It is in this light, and to compensate for the additional work burden forced upon the Department, that a fee was sought to be levied under section 234E of the Act. Looking at this from this perspective, we are clearly of the view that section 234E of the Act is not punitive in nature but a fee which is a fixed charge for  the extra service which the Department has to provide due to the late filing of the TDS statements.
As stated earlier, due to late submission of TDS statements means the Department is burdened with extra work which is otherwise not required if the TDS statements were furnished within the prescribed time. This fee is for the payment of the additional burden forced upon the Department. A person deducting the tax (the deductor), is allowed to file his TDS statement beyond the prescribed time provided he pays the fee as prescribed unde section 234E of the Act. In other words, the late filing of the TDS return/statements is regularised upon payment of the fee as set out in section 234E. This is nothing but a privilege and a special service to the deductor allowing him to file the TDS return/statements beyond the time  prescribed by the Act and/or the Rules. We therefore cannot agree with the argument of the Petitioners that the fee that is sought to be collected under section 234E of the Act is really nothing but a collection in the guise of a tax.
We are therefore clearly of the view that the fee sought to be levied under section 234E of the Income Tax Act, 1961 is not in the guise of a tax that is sought to be levied on the deductor. We also do not find the provisions of section 234E as being onerous on the ground that the section does not empower the Assessing Officer to condone the delay in late filing of the TDS return/statements, or that no appeal is provided for from an arbitrary order passed under section 234E. It must be noted that a right of appeal is not a matter of right but is a creature of the statute, and if the Legislature deems it fit not to provide a remedy of appeal, so be it. Even in such a scenario it is not as if the aggrieved party is left remediless. Such aggrieved person can always approach this Court in its extra ordinary equitable jurisdiction under Article 226 / 227 of the Constitution of India, as the case may be. We therefore cannot agree with the argument of the Petitioners that simply because no remedy of appeal is provided for, the provisions of section 234E are onerous. Similarly, on the same parity of reasoning, we find the argument regarding condonation of delay also to be wholly without any merit.
Therefore even looking at it from the perspective as set out in the aforesaid judgment, we are of the clear view that Section 234E of the Income Tax Act, 1961 does not violate any provision of the Constitution and is therefore intra vires, Constitution of India.
- See more at: http://taxguru.in/income-tax-case-laws/sec-234e-fine-late-filing-tds-returns-constitutionally-valid-bombay-hc.html#sthash.EkETwLNl.dpuf

The assessee's second ground is in respect of disallowance of repair and maintenance expenses of a rented premises at Rs. 42.66 lacs. The assessee, it was explained, had taken an office premises on rent in October, 2007 for a period of five As the said premises was old and not in use for a long time, it incurred the impugned expenditure towards repair and renovation of the said premises.

PFA

Expenditure on repair and renovation of leased premises is capital expenditure

Vardhman Developers Ltd vs. ITO (ITAT Mumbai), I.T.A. No. 6820/Mum/2012, Date of Pronouncement- 04.02.2015
The assessee's second ground is in respect of disallowance of repair and maintenance expenses of a rented premises at Rs. 42.66 lacs. The assessee, it was explained, had taken an office premises on rent in October, 2007 for a period of five As the said premises was old and not in use for a long time, it incurred the impugned expenditure towards repair and renovation of the said premises. The same was only toward achieving its' functional utility. No capital asset had come into existence thereby. Further, it needed to be borne in mind that the same is in respect of rented premises and, accordingly, allowable u/s.30(a)(i), which employs the word 'repairs', in contradistinction to the words 'current repairs', i.e., in respect of non-tenanted house property, which falls u/s. 30(a)(ii). The Revenue's objection, on the other hand, is based on the premise that the nature and the volume of the expenditure would not qualify it to be a repair, which only could be allowed u/s.30 of the Act. The expenditure was admittedly on renovation, capital in nature, and would therefore stand to be capitalized, albeit eligible for depreciation, Reference for the purpose is made to sec.32 read with New Appendix 1 of Income Tax Rules, Part A-I(2).
The expenditure incurred being toward false ceiling; fixing tiles/flooring; replacing glasses; wooden partitions; replacement of electrical wiring; earthing; replacement of G.I. pipes, plumbing and sanitation lines; plaster and painting of walls. A premises, it may be appreciated, is constituted not merely by, or only of, civil structure, in-as-much as the same by itself does not render it functional for the stated purpose of its user. In fact, the impugned expenditure includes labour for civil work also, paid to one, Akshar Construction, at Rs.9.78 lacs, so that the work could possibly include some structural changes as well. The issue involved, thus, reduces to as to whether the expenditure on extensive repairs and renovation could be allowed in respect of a tenanted premises. The same can by no means be regarded as 'current repairs', the ambit of which is fairly restricted, denoting a repair that is required to be attended to as soon as the need for it arises. 'Repairs', though a term of wider scope, yet cannot extend beyond that of the term itself. A repair, by definition, is toward the maintenance and preservation of an 'existing' asset. Surely, the advantage or asset, in terms of its functional utility and capacity for the business, needs to be maintained, so that expenditure for retaining the same is essentially revenue expenditure, which, again, by definition, does not lead to or result in an enhancement or improvement. The premises in the instant case was admittedly not in use for a long time and, thus, in a dysfunctional, if not dilapidated, state prior to it being acquired by the assessee. The expenditure stands thus incurred on refurbishment and renovation of an old premises, in an inoperable state, so as to make it fit for use. It is therefore wrong to classify or describe it as 'repairs'. The expenditure was incurred to render it in a functional state and, therefore, is clearly in the capital field. Could, one may ask by way of a test, the answer be any different if the same was acquired on own account? The ingredients and prerequisites of a capital expenditure would remain the same, and not undergo any change depending on the object matter of the expenditure, i.e., whether an owned or leased premises, and which itself is the premise of Explanation 1 to section 32(1)(ii), invoked by the Revenue.
Total renovation, leading to substantial improvements, is only capital expenditure, as clarified by the apex court in Ballimal Naval Kishore v. CIT [1997] 224 ITR 414 (SC). It is nobody's case, nor could be, that the improvement is not enduring or shall not inure in future, particularly upon incurring regular, maintenance expenditure. Reference may also be made to the decision in the case of CIT v. Madras Cements Ltd. [2002] 255 ITR 243 (Mad), rendered relying on Ballimal Naval Kishore (supra) and applying New Shorrock Spinning & Mfg. Co. Ltd. v. CIT [1956] 30 ITR 338 (Bom). The asset being also not owned by the assessee, it is, strictly speaking, not a case of replacement, but of acquisition of an advantage of enduring nature – for the first time, an asset by definition. The impugned expenditure is in fact only toward effectuating the decision of acquiring the premises (by way of lease) in the first place, by making it fit for use, both in terms of capacity and capability, in-as-much as it has both quantitative and qualitative attributes, so as to constitute an improvement. It is not a case of a lumpsum payment in lieu of annual business expenditure. The benefit arising out of a capital expenditure, again, does not imply permanence, in which case no expenditure even on regular maintenance, or for keeping it in a state of good repairs, a stipulation that marks most tenancy agreements, would be required. The said benefit, though, cannot also be said to be limited to the period of lease, which may well be extended. Further, that the same, i.e., capital expenditure, is excluded, stands amply clarified per Explanations to sections 30 and 31 of the Act, brought on the statute by Finance Act, 2003 w.e.f. 0 1.04.2004. The expenditure, in our view, thus stands rightly considered by the ld. CIT(A) to form a part of an admissible asset in view of Explanation 1 below section 32(1)(ii), carving an exception for depreciation, which is generally allowed only on assets owned by an assessee, on a building not owned by it, but in respect of which it holds a lease or other right of occupancy. A question may arise as to the fate of the written down value (WDV) of the relevant block of assets on the termination or expiry of the lease or rent arrangement, leading to the vacation of the premises. The assessee in such a case would continue to be entitled to its claim for deduction on the relevant block of assets, subject of course to the adjustment in respect of 'moneys payable', if any, as explained by the tribunal in Metro Exporters Pvt. Ltd. (in ITA No. 73 15/Mum/2012 dated 30.09.2014, as modified by its' further order dated 30.01.2015), on such an issue arising before it for adjudication.
Reliance by the assessee on the decision in the case of CIT vs. Hi Line Pens (P.) Ltd. [2008] 306 ITR 182 (Del) is in our view misplaced. The issue in the present case in our view reduces to or rests in the narrow compass of whether the impugned expenditure is capital or revenue in nature. We have already issued a definite finding of the same as being toward making the premises functional; rather, transforming it from an inoperable state – and, further, only as per the assessee's requirements, for the first time and, therefore, capital in nature. This finding of fact is in relation to the nature of expenditure, so that no presumption with regard thereto, as with reference to the premises being not owned, shall obtain. Rather, where for an extended period, the lease-hold or other right of occupancy could itself be regarded as a capital asset, even as clarified by the hon'ble jurisdictional high court in CIT vs. Khimline Pumps Ltd. [2002] 258 ITR 459 (Bom). The hon'ble court in the cited case, as a reading of its decision would show, allowed the assessee's claim for similar expenditure on the basis that the same was admissible u/s. 30(a)(i), which uses the word 'repairs', the scope of which is wider that 'current repairs', covered u/s. 30(a)(ii). The apex court in CIT vs. Saravana Spg. Mills (P.) Ltd. [2007] 293 ITR 201 (SC) was concerned with a claim u/s. 3 1(i), distinguishing the said decision on that basis. The hon'ble court, with respect, however, did not examine or dilate on the scope of the term 'repairs', either with reference to judicial precedents or even otherwise. True, the hon'ble apex court in Saravana Spg. Mills (P.) Ltd. (supra) was concerned with a claim u/s. 3 1(i), which deals with 'current repairs' of plant, machinery and furniture. So, however, as a reading of its decision, binding on all courts in India, would show, it clarifies the scope and ambit of the word 'repairs' to exclude capital expenditure. This in fact represents its consistent view in the matter, applying its earlier decision in Ballimal Naval Kishore (supra), affirming the decision by the hon'ble jurisdictional high court reported at [1979] 119 ITR 292 (Bom). The apex court applied the test of capital or revenue expenditure, which it noted the high court had failed to, reproducing the test laid down in the matter by C.J. Chagla, speaking on behalf of the hon'ble jurisdictional high court in New Shorrock Spinning & Mfg. Co. Ltd. (supra), wherein it, and in the context of s. 10(2)(v) (of the Income Tax Act, 1922), which corresponds to s. 3 1(i) of the 1961 Act only, clarified that repairs has to be understood in contradistinction to renewals and restoration, as under:
'The simple test that must be constantly borne in mind is that as a result of the expenditure which is claimed as an expenditure for repairs what is really being done is to preserve and maintain an already existing asset. The object of the expenditure is not to bring a new asset in to existence, nor is its object the obtaining of a new or fresh advantage. This can be the only definition of "repairs" because it is only by reason of this definition or repairs that expenditure is a revenue expenditure.
If the amount spent was for the purpose of bringing into existence a new asset or obtaining a new advantage, then obviously such an expenditure would not be an expenditure of revenue nature but it would be a capital expenditure and it is clear that the deduction which the legislature has permitted under s. 10(2)(v) is a deduction where the expenditure is a revenue expenditure and not a capital expenditure.' (para 14, at page 210)
[emphasis, ours]
As thus evident, the concept of 'repairs' and 'revenue expenditure' were considered as pari materia and co-extensive in-as-much as in the view of the hon'ble court, since approved by the apex court, repair could not, by definition, include capital expenditure. The hon'ble court in the said case, like-wise, did not examine the expenditure from the stand point of it being revenue or capital. This could perhaps be for the reason that the year under reference before it was A.Y. 1997-98. The amendments to ss. 30 and 31 w.e.f. 01.04.2004, by way of Explanations thereto, to the effect that the cost of repairs and, as the case may be, current repairs, shall not include any expenditure in the nature of capital expenditure, become now incumbent to consider, even as pointed out by the hon'ble apex court. The same have a direct impact on the decision in the case of Hi Line Pens Pvt. Ltd. (supra). Rather, in view of the foregoing settled position of law, as clarified by the decisions which stand approved by the apex court in Saravana Spg. Mills (P.) Ltd. (supra), it may not be incorrect to say that the said Explanations are clarificatory and, thus, retrospective. The said decision, thus, apart from the fact that it does not review the binding judicial precedents explaining the scope of the term 'repairs', is also inapplicable in view of the extant law, i.e., as in force A.Y. 2004-05 onwards, and, accordingly, reliance thereon by the assessee would be of no moment.
In view of the foregoing, we uphold the impugned order on this ground, dismissing the assessee's ground  before us.
- See more at: http://taxguru.in/income-tax-case-laws/expenditure-repair-renovation-leased-premises-capital-expenditure.html#sthash.3GSQXLAT.dpuf

Concealment Penalty Proceedings U/S 271(1)(C) of Income Tax Act 1961 Initiated in 128 Cases in which Assessments were Completed While in the Remaining Cases, Assessment Proceedings are at Advance Stage; Information About Hsbc Foreign Bank Accounts was Received from the French Authorities in Respect Of 628 Indian Persons/Entities; Necessary Investigation as Per The Provisions of […]

Foreign Bank Accounts Held By 1195 Indians – Govt. will take action

Concealment Penalty Proceedings U/S 271(1)(C) of Income Tax Act 1961 Initiated in 128 Cases in which Assessments were Completed While in the Remaining Cases, Assessment Proceedings are at Advance Stage;
Information About Hsbc Foreign Bank Accounts was Received from the French Authorities in Respect Of 628 Indian Persons/Entities; Necessary Investigation as Per The Provisions of Law Will be Taken up in all the New Cases Of  Foreign Bank Accounts Held By 1195 Indians as Reported in Today's Media Reports .
Information about HSBC foreign bank accounts was received from the French authorities in respect of 628 Indian persons/entities. Out of the said 628 persons, 200 were either non-residents or non- traceable, leaving 428 cases of residents which were found actionable. For these 428 actionable cases the net amount of peak balance was about Rs.4500 crore.
The Government of India has taken expeditious action in these cases as per law. Up-to 31st December 2014, assessments were completed in 128 cases, involving more than 350 assessments. In the remaining cases, assessment proceedings are at advance stage.  Undisclosed income of about Rs.3150 crore was brought to tax on account of deposits made in unreported foreign bank accounts.
Out of the above-mentioned 128 cases in which assessments were completed, concealment penalty proceedings u/s 271(1)(c) of the Income Tax Act 1961 have been initiated in almost all the cases.
About 60 prosecutions have so far been launched for wilful attempt to evade taxes [S/276C(1)] and failure to furnish accounts and documents etc [S/276D]. Show Cause Notices before launching prosecutions have been issued in a large number of other cases wherein further action is underway.
Today's media reports carry news item about foreign bank accounts held by 1195 Indians. Top hundred names have been published in a newspaper. Some of these names already figure in the earlier list available with the Government. Necessary investigation as per the provisions of law will be taken up in all the new cases, expeditiously.
Income Tax Department is already in touch with the whistle blower who apparently brought out the names of persons holding undisclosed bank accounts in HSBC, Switzerland.  He has been requested to share information available with him in regard to undisclosed bank accounts of Indians in HSBC, Switzerland and other destinations.  His response is awaited.
During last 6 months, the Government has taken vigorous and pro-active measures to expedite investigations in the cases of Indians holding undisclosed foreign accounts/assets abroad. Useful contacts have been established with foreign governments who might have some further information in this regard.  Based upon credible information of undisclosed foreign bank accounts, fresh references for obtaining further information in more than 600 cases have been made to foreign jurisdictions, under available treaties/agreements. The same are being pursued. (Source- PIB)
- See more at: Foreign Bank Accounts Held By 1195 Indians - Govt. will take action
It has been noticed that on many occasions persons suffering from physical/ mental disability seek voluntary retirement owing to their inability to attend duty, not being aware of the protection afforded by the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (PWD Act):

Employees suffering with disability -Need not take Voluntary Retirement

F.No.25012/01/2015-Estt (A.IV)
GOVERNMENT OF INDIA
MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS
DEPARTMENT OF PERSONNEL AND TRAINING
ESTABLISHMENT A-IV DESK
NEW DELHI
Dated: February 6, 2015
OFFICE MEMORANDUM
Subject: Request for Voluntary Retirement from Persons suffering with disability – regarding.
The undersigned is directed to say that many Government servants seek voluntary retirement on medical grounds. Sec 47 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (PWD Act) lays down that no establishment shall dispense with the services of an employee who acquires a disability during the course of service. It is proposed that any Government servant seeking voluntary retirement on medical grounds may be apprised of the above provisions of PWD ACT, in order that he can take a considered decision.
2. A draft of the office memorandum to be issued in this regard is enclosed. Comments/ suggestions are invited on the proposal. Comments may kindly be sent to the undersigned by E-mail at dse@nic.in or by FAX at 011-23093179 by 20-02-2015
(J A Vaidyanathan)
Director (E)
F.No.25012/1/2015-Estt (A-IV)
GOVERNMENT OF INDIA
MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS
DEPARTMENT OF PERSONNEL AND TRAINING
NEW DELHI
Dated: 2015
OFFICE MEMORANDUM
To
All Ministries/Departments of the Government of India
Subject: Request for voluntary retirement from persons suffering from disability – Supreme Court Order in Bhagwan Dass & Anr Vs Punjab State Electricity Board (2008) 1 SCC 579.
The undersigned is directed to refer to Rule 48A and Rule 48 of CCS (Pension) Rules, 1972 and Rule 56 of the Fundamental Rules and say that a Government servant can seek voluntary retirement after complation of prescribed period of qualifying service under the said Rules.
2. It has been noticed that on many occasions persons suffering from physical/ mental disability seek voluntary retirement owing to their inability to attend duty, not being aware of the protection afforded by the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (PWD Act):
3. Section 47 of PWD Act, 1995 is reproduced below for reference:
"Non-discrimination in Government Employment – (1) No establishment shall dispense with, or reduce in rank, and employee who acquires a disability during his service.
Provided that, if an employee, after acquiring disability is not suitable for the post he was holding, could be shifted to some other post with the same pay scale and service benefits.
Provided further if it is not possible to adjust the employee against any post, he may be kept on a supernumerary post until a suitable post is available or he attains the age of superannutation, whichever is earlier.
No promotion shall be denied to a person merely on the ground of his disability;
Provided that the appropriate Government may, having regard to the type of work carried on in any establishment, by notification and subject to such conditions, if any, as may be specified in such notification, exempt any establishment from the provisions of this section".
4. The issue had come up in Bhagwan Dass & Anr Vs Punjab State Electricity Board (2008) 1 SCC 579, decided by the Hon'ble Supreme Court where the employee who had during his service suffered from blindness had applied for voluntary retirement. The Hon'ble Supreme Court had observed that he was not aware of any protection that the law afforded him and apparently believed that the blindness would cause his to lose his job, the source of livelihood of his family. In those circumstances it was the duty of the superior officers to explain to him the correct legal position and to tell him about his legal rights.
5. Keeping in view the provisions of PWD Act and the judicial pronouncement, it has been decided that whenever a Government servant seeks voluntary retirement, on Medical grounds, the Appointing Authority shall examine whether his/her case is covered by the provisions of Section 47 of PWD Act. In case, the provisions are applicable, then the Government servant shall be advised that he/she has the option of continuing in service by virtue of the protection afforded by PWD Act.
6. If the Government servant, after being advised as in para 5 above, still wishes to take voluntary retirement the request may be processed as per normal rules.
7. All the Ministries and Departments are requested to keep the above in view while processing cases of requests for Voluntary retirement in case of disability.
8. Hindi version follows.
Under Secretary to the Government of India
- See more at: Employees suffering with disability -Need not take Voluntary Retirement







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