ASHOK BANSAL,JAIPUR vs. ITO WD 1(3), JAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 206/JPR/2026 (Assessment Year:2021-22) Ashok Bansal Vs. ITO D-4/140 Chitrakoot Yojna Ward 1(3) Vaishali Nagar Jaipur Jaipur �थायीलेखासं./जीआइआरसं./PAN/GIR No:ACPPB 7791 N Appellant .. Respondent Appellant by : Sh. Ashok Bansal, assessee Respondent by : Mrs. Aarti Rawat, JCIT Date of Hearing 15.07.2026 Date of Pronouncement 04.08.2026 O R D E R The present appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi(hereinafter referred to as “Ld. CIT(A)”), dated 03.01.2023under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). 2. The appeal has noted to be time-barred by 1038 days. The assessee has filed an application seeking condonation of delay. The contents of the application are substantiated in a duly sworn affidavit dated 01.02.2026 which was also filed before the Tribunal. Learned

P a g e | 2 ITA No. 206/JPR/2026 Ashok Bansal counsel for the assessee referred to the contents of the application while orally making out a case of there being sufficient cause for the delay and accordingly, requested condonation of the same. His contentions, primarily were to the effect, that the delay was not deliberate, there was sufficient cause for the delay and on merits since the assessee had a favourable case covered by various decisions of the co-ordinate Benches of ITAT, the delay needed to be condoned to sub-serve the interest of justice. That if the delay is not condoned the assessee’s meritorious matter would be thrown out and the cause of justice defeated. His contention was that as per the facts leading to delay the assessee fulfilled all the principles lay down by Judicial Authorities for condoning the delay. Reference was made to several decisions in this regard, which shall be referred to in the later part of the judgment. 3. Ld. DR, on the other hand, vehemently opposed the condonation of delay contending that the reason brought out by the assessee reflected laxity on his part in pursuing the remedy of filing appeal and therefore the delay ought not to be condoned. 4. I have heard both the parties, and have gone through the contents of the application filed before me, by the assessee along with the duly sworn affidavit explaining the reason for the delay in the filing of the present appeal before us by 1038 days. The ld. CIT(A) had passed the order on 03.01.2023. The assessee was to file the appeal within 60 days of the receipt of the order; however, the present appeal was filed before the Tribunal on 01.02.2026 by a delay of 1038 days.

P a g e | 3 ITA No. 206/JPR/2026 Ashok Bansal 5. Since the arguments made by both the sides before rest on the principles laid down by judicial authorities relating to condonation of delay, it is pertinent to first bring out the principles enunciated by various judicial authorities for condonation of delay. 6. Beginning with the landmark decision of the Hon'ble Apex Court in the case of Collector Land Acquisition, Anantnag & Another Vs. M/s Katiji and Others 1988 SC 897(7), the Hon'ble Apex Court held that the power of courts to condone delay conferred by Section 5 of the Indian Limitation Act, was primarily to enable courts to advance substantial justice to parties on merits. The Hon'ble Court noted that the expression “sufficient cause” employed by Legislature in Section 5 of the Limitation Act was technically elastic to enable the Courts to apply the law in a meaningful manner which would sub-serve the ends of justice, noting that giving justice was the life purpose for the existence of the institution of Courts. The principles noted by the Hon'ble Apex Court in the said decision for condonation of delay are reproduced hereunder:- “The expression "sufficient cause" employed by the legislature is adequately elastic to enable the courts to apply the law in a meaning- full manner which sub-serves the ends of justice--that being the life-purpose for the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that:- “Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908. may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period." 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

P a g e | 4 ITA No. 206/JPR/2026 Ashok Bansal 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.” 7. As is evident, the Hon'ble Apex Court has held that a liberal approach be adopted for condonation of delay based on the principle that the ultimate object / life-purpose of Courts is to advance justice, and that merely for technical considerations of delay in the filing of appeals, the opportunity for seeking justice should not be denied to an assessee particularly when the delay is not deliberate. The Hon'ble Apex Court has emphasized the importance of advancement of substantial justice stating that, it would override technical considerations noting that the judiciary is respected not on account of its powers to legalize injustice on technical grounds, but because it is capable of removing injustice and is expected to do so. 8. Reference is also being made to the authoritative pronouncement of the Hon'ble Supreme Court in the case of N. Balakrishnan Vs. M.

P a g e | 5 ITA No. 206/JPR/2026 Ashok Bansal Krishnamurthy (supra) AIR 1998 Supreme Court 3222, dated 03- 09-1998 wherein the Hon'ble Apex Court noted that: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finislitium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would resultforeclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575) and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Court should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss." 9. As is evident from a bare perusal of the order of the Hon'ble Apex Court the court noted that limitation for filing appeals and fixing a lifespan to the power to seek legal remedy was necessary, since unending period for seeking remedy would lead to unending uncertainty and consequential anarchy. The Hon’ble Apex Court noted

P a g e | 6 ITA No. 206/JPR/2026 Ashok Bansal that the Law of Limitation was founded on public policy. That it is for the general welfare that a period is put to litigation. 10. Having noted so, the Hon’ble Apex Court held that prescribing limitation does not mean or is not meant to destroy the rights of the parties. The purpose of limitation, it was heldwas only to see that parties did not resort to dilatory tactics but sought their remedy promptly. The Hon’ble apex Court held that, there is no presumption that delays in approaching the Court is always deliberate. It has been reemphasized that the words “sufficient cause” under Section 5 of the Limitation Act should receive liberal construction so as to advance substantial justice. It was noted that there can be same lapse on the part of the litigant concerned causing the delay, but that alone is not enough to turn down his plea and shut the doors against him. That as long as the explanation offered for delay does not smack of mala fides or is not put forth as a dilatory strategy, the Court must show utmost consideration to the suitor. 11. The principles laid down for condonation of delays, therefore, is that; • A liberal approach should be adopted to advance justice to parties and this is based on the principle that the purpose of Courts is to advance substantial justice and limitation is prescribed not to foreclose the rights of any appellant but merely to avoid anarchy and chaos in the judicial system. • The underlying objective of the Courts being advancement of justice and limitation being prescribed only with the end and purpose to avoid anarchy, the Rule of Limitation should not be strictly and technically applied. • That as long as, it is evident from the facts of the case, that the delay was not deliberate and adopted as a dilatory tactic and the assessee has a good case the delay ought to be condoned.

P a g e | 7 ITA No. 206/JPR/2026 Ashok Bansal 12. These principles have been relied upon in various other decisions of Courts repeatedly, where finding the explanation of the assessee to fit into the principles, the delays have been condoned and if not so found the delays were not condoned. 13. Since both the sides have placed their arguments on the principles so laid down by the Hon'ble Apex Court as above, it is imperative to test the facts of the assessee’s case on the principles noted above by me. 14. The application filed by the assessee seeking condonation of delay supported with a duly sworn affidavit bringing out the reasons for the delay reads as under:- Respected Sir, The assessee ASHOK BANSAL filed her appeal to commissioner of appeal of income for the year under consideration vide Ack. No. 412769850240322on 24.03.2022 Earlier Shri Rajesh was dealing in this matter but the have not filed any appeal as they got delayed and Now we have just taken authorization from the assessee regarding this case to deal with department and produce necessary documents and evidences. The Assessee is not well versed with IT Act,1961 rules and regulations and he always seek the advice from the Tax consultant who assure that he will file proper reply in the favour of the assessee. The assessee was full confident on capacity and knowledge of the tax consultant and acted under legal advice bona fide. Since the assessee got communication regarding high income tax demand pending as well as not getting any proper communication from tax consultant regarding development of the case decided to take advice from another Chartered Accountant who advised that proper course of remedy is to file appeal to the Commissioner of Income tax (Appeals) against the order u/s 250 of the Income-tax Act dated 03.01.2023. So the appeal with the request for condonation of delay of 1065 days in filing appeal. 1. Your honour it has been held that If there was sufficient cause shown for the condonation of delay, then, the Appellate authority should have applied the well-settled principles in consideration of the application. Your honour kind attention is invited to the well-settled principles are that if the cause shown or the explanation given is true, reasonable and bona fide, then, whether the delay should be condoned and which would

P a g e | 8 ITA No. 206/JPR/2026 Ashok Bansal enable the assessee to have an adjudication of the issue on merits. Your honour, one of the principles which have been carved out in numerous decisions of the Hon'ble Supreme Court on the point is that if the litigant has acted under legal advice bona fide, and that is mistaken, ordinarily the assessee should not be penalised.

"The law is settled that mistake of counsel may in certain circumstances be taken into account in condoning delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground. It is always a question whether the mistake was bona fide or was merely a device to cover an ulterior purpose such as laches on the part of the litigant or an attempt to save limitationin anunderhand way. The High Court unfortunately never considered the matter from this angle. If it had, it would have seen quite clearly that there was no attempt to avoid the Limitation Act but rather to follow it albeit on a wrong reading of the situation."

So the appeal against order u/s 250 of the Income-tax Act dated 03.01.2023 filed with a delay of 1065 days along with an application to condone the delay. 1. I am suffering from various health causes during above period 2. Not aware fot appeal 3. No anyitat decision and no notification issued by CBDT So your honour requested kindly to condone the delay and allow to not to be deprived of an adjudication on merits.

P a g e | 9 ITA No. 206/JPR/2026 Ashok Bansal he contended that ITAT in several decisions (62 in number , list submitted to me) consistently held the limit of exemption to be Rs. 25lacs.Ld.Counsel for the assessee contended that being a small salaried employee , not well versed with the latest developments in law, he sought guidance from a tax consultant who did not advice him to file appeal against the order of the Ld.CIT(A). That subsequently when he consulted another professional , he was informed that the exemption had been wrongly denied to him and the ITAT in this regard had rendered various decisions holding the applicable limit for exemption of leave encashment u/s 10(10AA) of the Act to have been retrospectively enhanced to Rs.25 lacs. He further contended that he was in possession of a message dated 09-04-2026 circulated by M.C Gupta , PSU Retirees Welfare Association , listing 62 cases in which ITAT had ruled the exemption limit to be Rs.25 lacs, and also a list of 14 cases in which the First Appellate authorities had deleted the addition made in the hands of assesses, applying the limit of Rs.25 lacs for exemption u/s 10(10AA ) of the Act. The same were filed before me.That accordingly therefore he filed appeal before the ITAT albeit with a delay of 1038 days. 16. Looking into the reasons stated by the learned counsel for the assessee before me, it can be safely said that the delay in filing of the present appeal before me, was not a deliberate and conscious delay. 17. Even otherwise, it has been brought to my notice that the issue involved in the present case is squarely covered in favour of the assessee by various decisions of the Co-ordinate Benches of the ITAT.

P a g e | 10 ITA No. 206/JPR/2026 Ashok Bansal Ld. counsel for the assessee has pointed out that in as much 62 decisions of the ITAT (list given to me), the ITAT has held the limitation of exemption of leave encashment applicable for the impugned year as per Section 10(10AA) of the Act to be Rs.25lacs and applying this limit to the facts of the present case the assessee, it was pointed out, was entitled to complete relief, the entire addition being made in its case liable to be deleted. The ld. DR fairly conceded to the said fact. 18. Noting the same, it is evident, that besides the delay not being deliberate it is also a case where, if the delay is not condoned it would result in gross injustice to the assessee. The assessee would be held liable to pay tax on income, which as per law as interpreted by Courts, he is not required to pay. 19. The principles lay down by the Hon'ble Apex Court for condonation of delay, repeatedly emphasizing a liberal approach to be adopted for advancement of substantial justice as long as the delay is not deliberate and a meritorious case not being thrown out at the threshold merely for a technical consideration, would squarely apply in the facts of the present case, following which therefore, I hold that there being sufficient cause adduced before us for condoning the delay in the filing of the present appeal before me by 1038 days,it is a fit case for condoning the delay. The delay in filing of the present appeal of 1038 days is therefore condoned. 20. Taking up now the appeal of the assessee, the grounds raised by the assessee read as under

P a g e | 11 ITA No. 206/JPR/2026 Ashok Bansal It is clear from the above that I claim full exemption as per CBDT rule but you have allowed exemption for 3 lacs only which is not correct. Please allow me full exemption. Recently the Central Board of Direct Taxes Suomotu revised the limit for deduction u/s 10(10AA) of the Act and the revised limit now stood at Rs. 25,00,000 as specified vide notification no. 31/2023 issued by the ministry of finance. Since the leave encashment amount as claimed by the assessee is amount to Rs. 995670/-which is below the revised limit of leave encashment exempt prescribed by the Board, the assessee is eligible to claim of deduction of said Rs 995670/- Based on these observations the Id. AO is directed to allow the claim of the assessee u/s.10(10AA) of the Act within the revised limit as prescribed. In terms of these observations the appeal of the assessee is allowed Order bad in law CASE LAWS 1. Vijay Kumar Jain VS Income-tax Officer, Ward 2(3)(1), Jhansi. 2. Govind Chhatwani VS CIT (Appeal) 21. The solitary issue in the present appeal pertains to the restriction of claim of exemption of leave encashment received by the assessee to the extent of Rs.3 lakhs. The assessee having received leave encashment to the tune of Rs.9,95,670/-, and his claim is that, he was entitle to the entire leave encashment being treated as exempt in terms of provisions of Section 10(10AA) of the Act. Ld. Counsel for the assessee pointed out that, there were consistent decisions of the ITAT holding that the limit for exemption u/s 10(10AA) of the Act was applicable for the impugned year was Rs.25 lakhs and filed a list of all the decisions was rendered present of 62 such cases. 22. Ld. DR fairly was unable to controvert the contention of the Ld. Counsel for the assessee. She was unable to point out any distinguishing facts in the present case from the decisions referred to before me by the assessee, she was also unable to draw my attention to any decision of either the jurisdictional high court or the Hon’ble apex court holding to the contrary.

P a g e | 12 ITA No. 206/JPR/2026 Ashok Bansal 23. I have gone through the decisions referred to by the assessee before me and I find that the ITAT has categorically held the revised limit of exemption u/s 10(10AA) of the Act of Rs.25 lakhs to be applicable retrospectively and hence applicable for the impugned year also. The ITAT Jaipur Benches in the case of Mr. Ram Charan Gupta Vs. ITO in ITA No.408/JPR/2022 dated 27.06.2023 has held so at para Nos. 3 to 8.1 read as under:- ……………… 3. Succinctly, the fact as culled out from the records is that the assessee who has retired is a bank employee and has claimed an amount of Rs. 6,97,100/- being leave encashment received as exempt u/s 10(10AA) of the Act. However, the AO, CPC while processing the return of income has allowed exemption of only Rs. 3,00,000/- as against 100% exemption claimed by the assessee. Hence, this appeal. 4. Aggrieved from the order of the AO, CPC assessee preferred appeal before the ld. CIT(A). A propose to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: “ 5.2.2 I have considered the facts of the case as also the submissions of the appellant. The appellant is a retiree from Bank and not any government organization. Here, reliance is placed on the decision of Hon’ble Delhi High Court in the case of Kamal Kumar Kalia v/s Union of India (2020) 268 Taxman 398/313 CTR 779 (Delhi) (HC) dated 08.11.2019, where the issue under consideration was whether the appellant being employee of Public sector undertaking (PSU) and Nationalised banks can be treated as government employee from the purposes of exemption u/s 10(10AA) of the I.T. Act. In the said case, the Hon’ble High Court held as under:- “The petitioner, who were the employees of the Public Sector undertaking and Nationalised banks, filed writ contending that they were discriminated against Central Government and State Government. The Central Government and State Government employees are granted complete exemption in respect of the cash equivalent of the leave salary for the period of earned leave standing to their credit at the time of their retirement. Dismissing the petition the Court held that merely because Public Sector Undertaking and Nationalised Banks are considered as State under article 12 of the Constitution of india for the purpose of entertainment of proceedings under Article 226 of the Constitution and for enforcement of fundamental right under the Constitution, it does not follow that the employees of such Public Sector Undertaking, Nationalised Banks or

P a g e | 13 ITA No. 206/JPR/2026 Ashok Bansal other institutions which are classified as ‘State’ Assume the status of Central government and State Government employees. Accordingly the petition is rejected.” 5.2.3 Further, in the case of KPTCL Davangere V/s ITO (2018), the Hon’ble ITAT, Bangalore vide its order in ITA No. 170 ITD 587 (Bang.) (Trib.) has held that assessee being a statutory corporation its employees could not be regarded as State or Central Government employees and therefore exemption under S. 10(10AA)(i) was not available and assesse was liable to deduct tax at source. 5.2.4 In view of the above, the action of the AO of restricting the exemption u/s 10(10AA) to Rs. 3,00,000/- is found to be in order. This grounds of appeal are therefore, dismissed.” 5. Feeling dissatisfied with the order of the ld. CIT(A) the assessee has preferred this appeal before this tribunal on the grounds as raised by the assessee as reiterated here in above para 2. To support the various grounds so raised by the assessee, the ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below; “1. Under the facts and circumstances of the case learned CIT (Appeal) was not justified while confirming the order passed by AO u/s 143(1) Assessing total income Rs 1188620.00 Confirming Demand of Rs. 118280 Our submission Initially return was processed u/s 143(1) (vide document identification no. cpc/2021/A3/186338352 dt.02/12/2021) allowing the claim of Rs.300000.00 u/s 10(10AA)-Earned Leave Encashment on Retirement. meaning thereby that there was enhancement in the income amounting by Rs.397100.00 and assessing total income at Rs 1188620.00 This was made without providing any opportunity of being heard as it appears that this addition was made by treating the employee as non-government employee although no specific reasons has been informed to appellant In fact, this organization is regulated by Bylaws made by central Government, thus by no means of stretch of imagination this organization can be treated as non- central government. Therefore, AO was not justified to disallow the claim upto the extent Rs 397100.00 without assigning any specific reasons and raising the demand of RS 118820.00 U/S 143(1) 2. Under the facts and circumstances CIT (Appeal) was not justified while restricting the claim Amounting To Rs 300000 u/s 10(10AA) and rejecting the amounting to Rs. 397100.00 out of Rs 697100.00 which is earned leave encashment on retirement made by AO. Our submission:-it is to explain that he is govt employee therefore he claimed full amount of leave encashment u/s 10(10AA) Rs 697100.00 in his return copy of computation is enclosed and marked as annexure B however while processing u/s 143(1) it appears that claim amounting to Rs 397100.00 out of Rs 697100.00 has been disallowed which is leave encashment u/s 10(10AA) from the order of cpc Banglore without assigning any cogent reasons in fact the

P a g e | 14 ITA No. 206/JPR/2026 Ashok Bansal appellant is bank employee and nowhere in the section it has been mentioned that it is allowable only up to Rs 3.00 lacs in the case bank employee definition of other employee and govt has not been in described in section 10(10AA) therefore it can be safely conclude that appellant is govt employee and he is entitle for full exemption of for the sake of argument bank employee cannot be put on different footing for purpose of treatment of govt employee. This is also clear from the fact that bank are nationalized and their management and administration is controlled by central govt even CMD is appointed by govt therefore there is no reasons to not to treat as govt employee and resultantly appellant is the govt employee and he cannot be denied the benefit of exemption u/s 10(10AA) it is also to clarify that in the definition of non govt employee bank employee are not specified therefore he is govt employee and is eligible for remaining balance of leave encashment amounting to RS 397100.00 meaning thereby that he is entitled for deduction of RS 10(10AA). 3. Under the facts and circumstances of the case CIT (Appeal) was not justified while confirming the order of AO treating the employer as non-government instead of government organization Our submission: it is to submit that although no reason has been mentioned in intimation send u/s 143(1) for disallowance of Rs 397100.00 out of Rs 697100.00 u/s 10(10AA) however it appears that bank has not been treated as govt employee and disallowance has been effected which is not a correct proposition as per principal of natural justice it becomes mandatory on the part of assessing officer to provide the opportunity of being heard however factually employer of the appellant is govt therefore he is entitle for deduction of Rs 697000.00. 4. Kindly stay the demand. As disallowance has been made on incorrect presumption therefore demand is liable to be quashed 5. Assessee craves to add alter any of the grounds of appeal before or at the time of hearing. This ground of appeal is general in nature therefore no submission are being submit.” 6. In addition to the above detailed written submission the ld. AR of the assessee also submitted that in the recent budget speech Hon’ble Finance Minister indicated that for increase in the limit and the related notification is issued. The ld. AR thus based on the said notification submitted that the relief be granted to the assessee. 7. The ld. DR is heard who has relied on the findings of the lower authorities and left the decision on bench to grant the relief to the assessee as per notification dated 24.05.2023. 8. We have heard the rival contentions and perused the material placed on record. The bench noted that the assessee relying the decision of Hon’ble Delhi High Court has issued a notice to the Union of India in the case of Kamal Kumar Kalia & Ors. Vs. Union

P a g e | 15 ITA No. 206/JPR/2026 Ashok Bansal of India & Ors in WP(C) 11846/2019 dated 08.11.2019 wherein the court has given following directions :- “8. We are however of the, prima facie, view that the grievances of the petitioner with regard to exemption limit under Clause (ii) of Section 10 (10AA) not being raised since 1998, appears to be justified. This is so because over the decades, the pay-scales admissible to government servants, and even employees of the Public Sector Undertaking and Nationalised Banks and all others have been upwardly revised, keeping in view, the financial growth in the country as well as on account of rising inflation. The last drawn salaries have increased manifold since time and notification issued under Clause (ii) of Section 10(10AA) was lastly issued, as taken note of hereinabove, on 31.05.2002. We therefore, issue notice to the respondents limited to this aspect. 9. Issue notice, learned counsel for the respondents accepts notice. Respondents should file counter affidavits be filed within six weeks. Rejoinder thereto, if any, be filed before the next date.” 8.1 Recently the Central Board of Direct Taxes Suomotu revised the limit for deduction u/s 10(10AA) of the Act and the revised limit now stood at Rs. 25,00,000 as specified vide notification no. 31/2023 issued by the ministry of finance. Since the leave encashment amount as claimed by the assessee is amount to Rs. 6,97,100/- which is below the revised limit of leave encashment exempt prescribed by the Board, the assessee is eligible to claim of deduction of said Rs. 6,97,100/-. Based on these observations the ld. AO is directed to allow the claim of the assessee u/s. 10(10AA) of the act within the revised limit as prescribed. In terms of these observations the appeal of the assessee is allowed. ………………. 24. The said decision has been consistently reiterated in several other decisions of the ITAT some of which are listed hereunder: i) ITAT Jaipur Benches in the case of Mr. Chandra Prakash Vashishtha Vs. ITO in ITA No.1139/JPR/2025 dated 07.10.2025 ii) ITAT Jaipur Benches in the case of Mr. Mangala Ram Nimbark Vs CIT(A) in ITA No.542/JPR/2023 dated 04.10.2023 iii) ITAT Chandigarh Benches in the case of Mr. Satish Kumar Thakur Vs. ITO in ITA No.211/CHD/2023 dated 12.09.2023

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iv) ITAT Delhi Benches in the case of Mr. Shyam Sunder Sahni Vs. Asstt. Director of Income Tax CPC Bengaluru in ITA No.129/DEL/2025 dated 21.04.2025 25. In the light of the above, since the issues stands squarely covered in the favour of the assessee by various decisions of the ITAT, I hold the assessee liable to claim exemption of the entire leave encashment received by it of Rs.9,95,670/-. The AO is directed accordingly, to exempt the entire leave encashment received by the assessee. 26. In effect, the appeal of the assessee is allowed. Order pronounced in the Open Court on 04.08.2026.

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 04.08.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur