MULCHANDBHAI SHANKARLAL PARMAR,GANDHINAGAR vs. ITO, WARD 1, GANDHINAGAR, GANDHINAGAR

आदेश/O R D E R

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), ADDL/JCIT(A), Thiruvanantpuram [hereinafter referred to as ‘Ld. CIT(A)’] dated 05/03/2026 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2022- 23.

ITA No.710/Ahd/2026 Mulchandbhai Shankarlal Parmar vs. ITO Asst.Year 2022-23 2 “1. The Ld. C1T(A) has erred in law and on facts in refusing to condone the delay in filing the appeal without appreciating that the delay occurred solely due to the Appellant's bona fide ignorance regarding the availability of exemption in respect of eave encashment and lack of legal knowledge. These circumstances constitute a reasonable cause within the meaning of Section 249(3) of the Income-tax Act, 1961. The Ld. CIT(A) failed to apply the settled legal principles laid down by the Hon'ble Supreme Court in the cases of Collector, Land Acquisition vs. Katiji and N. Balakrishnan vs. M. Krishnamurthy, wherein it has been held that substantial justice must prevail over technicalities and that the length of delay is immaterial when the explanation is bona fide. 2. The Ld. CIT(A) has erred in holding that the Appellant is making a new claim, ignoring that appellate authorities have plenary powers to grant all legitimate reliefs even if not claimed in the return of income, as mandated by CBDT Circular No. 14 (XL-35) of 1955 dated 11 .04.1955 and upheld by various judicial precedents. 3. The Ld. CIT(A) has passed the impugned order without granting reasonable opportunity of hearing and without issuing proper statutory notice during the appellate proceedings under Section 250 of the Act. The order is therefore vitiated for breach of the principles of natural justice and is bad in law. 4. The Ld. CIT(A) has erred in confirming the action of the Ld. AO in restricting the exemption claimed by the Appellant in respect of leave encashment to Rs. 3,00,000 and in upholding the addition of the remaining amount without properly appreciating the facts, submissions and evidences placed on record. The impugned order is contrary to the beneficial nature of the provisions governing exemption of leave encashment and is not sustainable in view of CBDT Notification No. 31/2023 dated 24.05.2023, the decision of the Hon'ble IT AT Jaipur Bench in the case of Chandra Prakash Vashistha vs ITO (ITA No. 1139/JPR/2025), and CBDT Circular No. 14 (XL-35) dated 11.04.1955. It is respectfully submitted that the entire amount of leave encashment received by the Appellant is eligible for exemption and ought to have been allowed.” 3. At the outset, the Ld. Counsel for the assessee has submitted that the issues raised through above grounds of appeal is relating to the claim of exemption in respect of leave encashment, which is duly covered by the various decisions of the Coordinate Benches of the Tribunal. He is in this respect has relied upon the following decisions:

ITA No.710/Ahd/2026 Mulchandbhai Shankarlal Parmar vs. ITO Asst.Year 2022-23 3 (i) Jaipur Benches SMC Bench, Jaipur in the case of Chandra Prakash Vashistha (ITA No. 1139/JPR/2025)

(ii) Jaipur Benches SMC Bench, Jaipur in the case of Devi Dutt Agarwal (ITA No. 1375/JPR/2024)

(iii) Ahmedabad “A” Bench, Ahmedabad in the case of Govardhan Deepchand Bhambhani (ITA No. 289/AHD/2025)

(iv) Agra Bench in the case of Vijay Kumar Jain (ITA No. 175/AGR/2022)

“Appellant-assessee, who claims to have got superannuated from State Bank of India, has challenged order dated 18.10.2022, passed by Learned CIT(A), whereby his appeal filed there, while challenging order dated 03.11.2021, passed u/s 143(1) of the Income Tax Act (hereinafter referred to as “the Act”), has been dismissed. 2. The impugned order is dated 18.10.2022. Present appeal came to be presented on 16.08.2025 i.e. much beyond prescribed period of limitation for 959 days. Along with the appeal, the assessee-appellant filed an application seeking condonation of delay in filing of the appeal. Accordingly, Ld. AR for the appellant-applicant has firstly advanced arguments on the point of condonation of delay. The only contention raised by ld. AR for the applicant is that the assessee is an retired employee of a bank having age more than 65 years, who could not present the appeal within the prescribed period of limitation, as he contacted many tax consultants before making up his mind to go for appeal challenging the impugned

ITA No.710/Ahd/2026 Mulchandbhai Shankarlal Parmar vs. ITO Asst.Year 2022-23 4 order. Accordingly, Ld. AR for the applicant-appellant has urged that the delay in filing of the appeal may be condoned. 3. Alongwith the application, the applicant-appellant submitted to his affidavit duly attested before notary public. 4. As noticed above, the applicant-appellant was in the services of the Bank and the matter pertains to retrial benefit i.e. leave encashment, received by him, on his superannuation. When the applicant-appellant states on oath that he contacted many legal experts, which led to delay in filing of the appeal, we deem it a fit case to believe his deposition on affidavit, particularly, when said deposition goes unchallenged. Consequently, delay in filing of the appeal is hereby condoned. On merit 5. The only submission put forth by Ld. AR for the appellant is that an amount of Rs. 13,05,810/- was received by the appellant by way of leave encashment benefit in terms of section 10(10)AA of the Act, and that notification dated 24.05.2023 was issued by CBDT whereby the benefit was extended to non government employees by raising the limit to Rs. 25 lakhs and that too with retrospective effect. Therefore, Ld. AR has contended that by not applying the said notification dated 24.05.2023 with retrospective effect, Learned CIT(A) has erred in confirming the assessment order, and argued that the appeal deserves to be allowed. 6. In the course of arguments, Ld. DR for the department has not disputed issuance of notification no. 31/2023/F.No.200/2023- ITA-I dated 24.05.2023 and that the above said limit as regards leave encashment was raised to Rs. 25 lakhs. 7. In view of the notification dated 24.05.2023, which is a piece of evidence in the form of beneficial instructions meant for non government employees, the assessment order and the impugned order, passed by Learned CIT(A) deserve to be set aside. Result 8. As a result, this appeal is allowed. Assessing Officer to give effect to revised limit of leave encashment. Based on these observations the appeal of the assessee is allowed.” 5. The Ld. DR has not brought any distinguishing fact or proposition of law which may justify our departure from the above decision of the Co-ordinate Bench. Therefore, respectfully, following the order of the Co-ordinate Bench of the Tribunal, this issue is decided in favour of the

ITA No.710/Ahd/2026 Mulchandbhai Shankarlal Parmar vs. ITO Asst.Year 2022-23 5 assesse. The impugned order of the CIT(A) is accordingly, set-aside. The appeal of the assessee stands allowed. The AO is directed to give relief to the assessee as per the revised limit of leave encashment.

Order pronounced in the Open Court on 08/07/2026.

Sd/- Sd/- (Narendra Prasad Sinha) (Sanjay Garg) Accountant Member Judicial Member

अहमदाबाद/Ahmedabad, िदनांक/Dated 08/07/2025 Tanmay, Sr. P.S. TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु� अपील ( ) / The CIT(A)-(NFAC) 5. िवभागीय �ितिनिध आयकर अपीलीय अिधकरण अहमदाबाद /DR,ITAT, Ahmedabad. , , 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (dictation pad is attached with the file)) : 06.07 2026 2. Date on which the typed draft is placed before the : 07.07.2026 Dictating Member. 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating : Member for pronouncement. 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the : 08.07.2026 Sr.P.S./P.S. 7. Date on which the file goes to the Bench Clerk. : 08.07.2026 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar : for signature on the order. 10. Date of Despatch of the Order :