Rebate u/s 89(1) of income tax

Sir, I am an officer in PSU Bank and recently we have received arrears due to wage revision as per my knowledge our employer may allow us rebate u/s89(1) of Income Tax but our employer is of the opinion that tax will be deducted at source and rebate may be claimed through filing the return only while I am of the opinion that PSU employer may allow rebate at source. Please guide me regarding the legal position.Thanks in advance