HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Sant Raj and Another v. O. P. Singla and Another
Civil Appeal No. 650 of 1982
[1985] 3 SCR 623 ·
Income-tax Act, 1961: sections 17(3), 89 and 192 · Income-tax Rules, 1962: rule 21A · Industrial Disputes Act, 1947: sections 2(oo) and 25F
Sources & disclosures includedDownload original judgment / order
Two-judge bench; judgment delivered by D. A. Desai, J. · D. A. Desai, J. · Ranganath Misra, J.
01 · Facts of the case
Two airline loaders had been kept out of employment for about twelve years after an illegal retrenchment. The Labour Court declined reinstatement and awarded only one year's wages. The Supreme Court considered adequate compensation in lieu of reinstatement and the tax consequence of paying the accumulated amount at once (SCR pp.623-628; PDF pp.1-6).
02 · Discussion by the Hon’ble Court
The Court fixed Rs.2,00,000 for each worker, including twelve years of back wages and compensation instead of reinstatement. Because section 192 could otherwise tax the entire lump sum in one year, section 89 and rule 21A required the arrears and compensation to be spread for relief; the employer was directed to assist with any necessary application (SCR pp.627-629; PDF pp.5-7).
03 · Judicial decision
The appeal was partly allowed. Each appellant received Rs.2,00,000, and the Court directed that section 89 relief be available for the lump-sum salary arrears and compensation.
04 · Outcome / in whose favour
In favour of the workmen. They obtained enhanced compensation and an express direction preserving tax-spreading relief; reinstatement was not granted.
05 · AKHB REVIEW POINT
AKHB analysis: when salary arrears or profit-in-lieu-of-salary are paid under a court order, obtain the year-wise break-up, test section 89 and rule 21A, and coordinate payroll withholding with the employee's relief application. Do not treat the historic computation as current without checking the applicable rule and portal procedure.
Source & verification
Download original judgment / order · Open cited source rendition
Complete seven-page SCR report read in page-preserving text and every page image inspected.
- Exact catalogue hash and seven-page count verified; every page was read and inspected.
- The report verifies the compensation, twelve-year period and express section 89/rule 21A direction.
Statutory scope
The tax direction reflects section 89 and rule 21A as considered in 1985. Present eligibility and computation must be checked independently.
Later treatment
Source checked 2026-10-12. No comprehensive later-treatment or current-computation review is represented.
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