“workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, dischasrge or retrenchment has led to that dispute, but does not include any such person– (i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or (ii) who is employed in the police service or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature ,

ITAT , Hyderabad in case First Income-tax Officer V. S. K. Khandekar.17 ITD 271 (1985) decided a case pertaining to this issue only.Brief facts of this case was that :

the assessee was working as Chief Executive (Administration) with the New Demco Engg. Products (P.) Ltd. His services were terminated on 14-8-1976. He raised a dispute and the matter was settled by the arbitration. The award dated 17-4-1977 by the arbitrator granted him Rs. 28,000 as compensation for termination of his services inclusive of retrenchment compensation and Rs. 10,000 on account of leave salary and Rs. 6,640 on account of commission. The assessee claimed that the sum of Rs. 28,000 received by him in the previous year ended 31-3-1978 corresponding to the assessment year 1978-79 was exempt under section 10(10B) as compensation received by a workman under an award. While the ITO rejected this claim, the AAC accepted it. Hence, the revenue is in appeal.

section 10(10B) provides that any compensation of received by a workman at the time of his retrenchment, to the extent of such compensation does not exceed, an amount calculated in accordance with the provisions of section 25F of the Industrial Dispute Act, 1947, or twenty thousand rupees whichever is less shall be exempted. Obviously, this applies only to compensation received under the provisions of the Industrial Disputes Act. But, since the section refers to compensation received under an award, the assessee claims that the compensation which he received under the award should also be exempted. But, this argument can be accepted only if the assessee is a workman. The Explanation to the section states that the expression ‘workman’ shall have the same meaning as in the Industrial Disputes Act. The scope of the section has to be understood in reference to the Industrial Disputes Act, because if every person who carries out some work in the course of his employment is to be considered as a workman, then the definition in section 17 would become meaningless. It is seen from the cases cited on behalf of the assessee and relied upon by the AAC that the persons concerned in those cases were actually governed by the Industrial Dispute Act. On the other hand, in the present case, the assessee could, by no stretch of imagination, be governed by the Industrial Disputes Act, because he was a company secretary and in charge of the company itself. The fact that he was carrying out certain clerical work does to make him a clerk so as to be regarded as a workman. In the circumstances, the assessee was not entitled to exemption under section 10(10B).

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