Dear Experts,
The assessee earns income under the head salary. The assessee employee left the company in the month of March 2016 and received compensation in the name of "Severance Allowance" (as mentioned in Form 16 issued for A.Y 2016-17). Relief under section 89 for the said amount was not shown by the employer in Form 16. However the employee has claimed relief under section 89 under the Act at the time of filing his return of income for the said assessment year.
CPC (Bangalore) disallowed the claim of relief [as shown in the intimation under section 143(1)] stating that Form 10E needs to be filed.
Kindly answer me following questions:
1. Whether the amount received in the name of "Severance Allowance" can be considered for the purpose of claiming relief under Section 89?
2. Whether relief under Section 89 be claimed inspite of the reason that the employer has not shown it in Form 16?
Kindly note that the amount is 3 to 4 times the amount of basic salary of the employee.
I would be grateful to you for your prompt response. Thanking You in advance.
Best Regards,
Dhrunil Bhatt
CAclubindia
