31. K.
Vijaya Kumar vs. Principal CIT [2020]
422 ITR 304 (Mad.) Date
of order: 26th February, 2020 A.Y.:
2010-11
Exemption
u/s 10(17A) of ITA, 1961 – Award for meritorious service in public interest –
Scope of section 10(17A) – Approval of State Government or Central Government –
Formal approval not mandatory – Approval may be implied; A.Y. 2010-11
The
petitioner has had a distinguished career in the Indian Police Service and is
at present engaged as a senior security adviser to the Union Home Ministry. In
the course of his service, he had been appointed as the Chief of the Special
Task Force (STF) leading ‘Operation Cocoon’ against forest brigand Veerappan,
leading to Veerappan’s fatal encounter on 18th October, 2004. In
recognition of the special and commendable services of the STF, the Government
of Tamil Nadu had issued G.O. Ms. No. 364, Housing and Urban Development
Department, dated 28th October, 2004 instituting an award in
national interest to STF personnel for the valuable services rendered by them
as part of the team. Pursuant thereto, the petitioner had received a cash award
of Rs. 1,08,43,000 in the F.Y. 2009-10, relevant to A.Y. 2010-11. This amount
was sought to be assessed as income by the Commissioner u/s 263 of the
Income-tax Act, 1961 for which the assessee claimed exemption u/s 10(17A). The
Commissioner directed the A.O. to allow the claim of exemption u/s 10(17A) only
if the assessee was able to produce an order granting approval of exemption by
the Government of India u/s 10(17A)(ii).
The assessee
filed a writ petition and challenged the order of the Commissioner. The Madras
High Court allowed the writ petition and held as under:
‘i) The object of section 10(17A) of the
Income-tax Act, 1961 is to reward an individual who has been recognised by the
Centre or the State for rendition of services in public interest. While clause
(i) of section 10(17A) is concerned with an award whether in cash or in kind,
instituted in public interest by the Central or any State Government or
instituted by any other body and approved by the Central Government in this
behalf, clause (ii) refers to a reward by the Central or a State Government for
such purposes as may be approved by the Central Government in this behalf in
public interest.
ii) No specification or prescription has been set
out in terms of how the approval is to be styled or even whether a formal
written approval is required. Nowhere in the rules or forms is there reference
to a format of approval to be issued in this regard. That apart, one should
interpret the provision and its application in a purposive manner bearing in
mind the spirit and object for which it has been enacted. It is clear that the
object of such a reward is by way of recognition by the State of an
individual’s efforts in protecting public interest and serving society in a
significant manner. Thus, the reference to “approval” in section 10(17A) does
not only connote a paper conveying approval and bearing the stamp and seal of the
Central Government, but any material available in the public domain indicating
recognition for such services rendered in public interest.
iii) The assessee had been recognised by the
Central Government on several occasions for meritorious and distinguished
services and from the information available in the public domain, it could be
seen that he was awarded the Jammu and Kashmir Medal, Counter Insurgency Medal,
Police Medal for Meritorious Service (1993) and the President’s Police Medal
for Distinguished Service (1999). Specifically for his role in nabbing
Veerapan, he was awarded the President’s Police Medal for Gallantry on the eve
of Independence Day, 2005. The assessee was entitled to exemption on the awards
received from the State Government. The writ petition is allowed.’
