TEJ PRATAP ADVANI,ALWAR vs. INCOME TAX OFFICER, WARD-1(1), ALWAR, ALWAR

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ITA 62/JPR/2026Status: DisposedITAT Jaipur25 August 2026AY 2020-214 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the significant delay in filing the appeal due to the assessee seeking professional advice on the retrospective notification. A cost of Rs. 10,000 was imposed on the assessee.

What were the facts?

The assessee, a retired bank employee, received leave encashment of Rs. 10,32,754. The CPC restricted the deduction to Rs. 3 lakhs. Subsequently, CBDT notification increased the limit to Rs. 25 lakhs retrospectively.

What were the issues?

Whether the retrospective increase in the leave encashment limit by CBDT notification should be applied to the assessee's case, and whether the delay in filing the appeal should be condoned.

Which sections of the Income-tax Act were involved?

Section 10(10AA)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T.R. Senthil Kumar

For Appellant: Shri Sunil Porwal, CA (Through V. C.)

IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta, Accountant Member & Shri T.R. Senthil Kumar, Judicial Member

ITA No. 62/JPR/2026 Assessment Year : 2020-21

Tej Pratap Advani ITO Ward 1(1), Flat 611, Wonder Alwar, Rajasthan Residency, 200 Feet Road, Vs Near Ayaan Hospital, Alwar, Rajasthan-301001

(Appellant) (Respondent) PAN No.: ABGPA7188J

Assessee Represented by : Shri Sunil Porwal, CA (Through V. C.) Revenue Represented by : Mrs. Aarti Rawat, JCIT

Date of hearing : 09-07-2026 Date of pronouncement : 25-08-2026 आदेश/ORDER

PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 15.11.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising out of intimation passed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2020-21.

2.

The Registry has noted that there is a delay of 1078 days in filing the appeal. The assessee by way of a notarized affidavit stated that he is a senior citizen aged 64 years and retired from Banking service in the FY 2019-20 and received leave encashment amount u/s 10(10AA)

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of Rs. 10,32,754/-. The CPC restricted the leave encashment benefit to Rs. 3 lakhs only and balance amount charged to tax. It is thereafter CBDT vide Notification No. 31/2023 dated 24.04.2023 has raised the leave encashment limit from Rs. 3 lakhs to Rs. 25 lakhs even for the private sector employees with retrospective effect. The assessee being a salaried person, discussed with various professionals about the retrospective effect notification given by CBDT, thus resulted in the delay of 1078 days. Therefore, the assessee requested to condone the delay.

3.

Ld. Sr. DR appearing on behalf of the Revenue strongly opposed the delay and requested to impose the huge cost, if at all the delay is to be condoned. However, Ld. Sr. DR could not dispute the notification issued by the CBDT with retrospective effect.

4.

We have carefully considered the rival submissions and perused the materials available on record. The assessee is retired from Punjab National Bank during the FY 2019-20 and received Rs. 10,32,754/- as leave encashment benefit in terms of section 10(10AA) (ii) of the Act. The assessee filed the original return of income on 10.01.2021 and then filed revised return on 22.03.2021 claiming the whole amount of leave encashment as eligible for deduction. However CPC vide intimation u/s. 143(1) dated 29.09.2021 restricted the deduction to Rs. 3 lakhs and demanded tax for the balance amount. It is thereafter the CBDT vide Notification No. 31/2023 dated 24.04.2023 issued as follows:-

MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION

3 I.T.A No. 62/JPR/2026 Page No Tej Pratap Advani

New Delhi, the 24th May, 2023 (INCOME-TAX) S.O. 2276(E).—In exercise of the powers conferred by sub-clause (ii) of clause (10AA) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government, having regard to the maximum amount receivable by its employees as cash equivalent of leave salary in respect of the period of earned leave at their credit at the time of their retirement, whether superannuation or otherwise, hereby specifies the amount of Rs. 25,00,000 (twenty-five lakhs rupees only) as the limit in relation to employees mentioned in that sub-clause who retire, whether on superannuation or otherwise.

2.

This notification shall be deemed to have come into force with effect from the 1st day of April, 2023.

[Notification No. 31/2023/F. No. 200/3/2023-ITA-I] SOURABH JAIN, Under Secy.

Explanatory Memorandum : It is hereby certified that no person is being adversely affected by giving retrospective effect to this notification.

5.

Reading of the above notification and Explanatory Memorandum, it is applicable retrospectively.

6.

The Coordinate Bench of this Tribunal in the case of Sujata Gupta –Vs- ITO in ITA No. 915/JPR/2025 dated 31.07.2015 interpreting this above CBDT Circular, held in favour of the assessee. However, there is substantial delay of 1078 days in filing the appeal and to meet the ends of justice, we deem it fit to impose a cost of Rs. 10,000/- payable by the assessee to the Income Tax Department within two weeks of receipt of copy of this order and production of the receipt before the JAO. Thus the orders passed by the lower authorities are set aside with a direction to the JAO to pass a fresh order giving full benefit of section 10(10AA) (ii) of the Act.

4 I.T.A No. 62/JPR/2026 Page No Tej Pratap Advani

7.

In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.

Order pronounced in the open court on 25-08-2026

Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 25/08/2026 Dhananjay K., Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण,

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