SANJEEV CHOPRA,MOHALI vs. INCOME TAX OFFICER, WARD (1), MOHALI

ITA 524/CHANDI/2026Status: DisposedITAT Chandigarh28 September 2026AY 2017-187 pages
AI SummaryRemanded

What were the facts?

The assessee, Shri Sanjeev Chopra, filed his return of income for Assessment Year 2017-18 declaring a total income of Rs.95,57,040/-. The return was processed under section 143(1) by the CPC, Bengaluru. The CPC did not allow exemptions of Rs.10,00,000/- under section 10(10) for gratuity and Rs.3,00,000/- under section 10(10AA) for leave encashment, both received at retirement. This resulted in an addition of Rs.13,00,000/- and a consequential demand. The assessee appealed to the CIT(A)-1, Nashik, challenging this adjustment. The CIT(A) upheld the adjustment, relying on the fact that the exemption was not claimed in the prescribed column of the return. The assessee then filed an appeal before the ITAT, Chandigarh.

What did the Tribunal hold?

The Tribunal held that once the assessee has raised a specific claim before the appellate authorities and has placed supporting material on record, the claim requires examination on its factual and legal merits. The Tribunal found that the mere fact that the claim was not reflected in the relevant column of the original return does not, in the facts and circumstances, obviate the requirement of examining the underlying claim and supporting evidence in accordance with law. The Tribunal noted that the claim was available for examination before the appellate authorities along with supporting material, including Form No.16. Therefore, in the interest of substantial justice, the Tribunal restored the matter to the file of the Assessing Officer for fresh examination of the assessee's claim for exemption of Rs.10,00,000/- towards gratuity under section 10(10) and Rs.3,00,000/- towards leave encashment under section 10(10AA). The Assessing Officer was directed to examine the claims on merits, considering the statutory provisions and documentary evidence, and to provide the assessee with a reasonable opportunity of being heard. The Tribunal explicitly stated that it had not expressed any opinion on the ultimate allowability of the exemptions.

What were the issues?

1. Whether the assessee is entitled to claim exemption for gratuity of Rs.10,00,000/- under section 10(10) and leave encashment of Rs.3,00,000/- under section 10(10AA) of the Income-tax Act, 1961, when the claim was not made in the prescribed column of the original return filed under section 143(1)? (Mixed question of law and fact, turning on Sections 10(10) and 10(10AA)). Assessee's contentions: The assessee argued that both gratuity and leave encashment received on retirement were eligible for exemption. The employer had also treated these receipts as exempt in Form No.16. The assessee contended that the substantive claim should be examined on merits and that the benefit should not be denied due to the manner in which the claim was reflected or omitted in the return. The assessee prayed for the matter to be restored to the Assessing Officer for examination. Revenue's contentions: The Revenue, as per the CIT(A)'s order, argued that the assessee had not claimed the exemption in the prescribed column of the return. Therefore, the CPC was justified in not allowing the exemption during processing under section 143(1). The CIT(A) relied on the decision in Goetze (India) Ltd. vs. CIT, holding that an omitted claim could only be entertained through a revised return. However, the Revenue fairly submitted that the claim was otherwise maintainable on merits.

Which sections of the Income-tax Act were involved?

Section 10(10),Section 10(10AA),Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI VIJAY VARMA

For Appellant: Shri Om Dutt Sharma, Advocate
For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr.DR
Hearing: 10.09.2026Pronounced: 28.09.2026

PER LALIET KUMAR, JM

This appeal by the assessee is directed against the order dated 04.02.2026 passed by the learned Commissioner of Income Tax (Appeals)-1, Nashik [“ld. CIT(A)”], arising from the intimation dated 20.03.2019 issued under section 143(1) of the Income-tax Act, 1961 (“the Act”) for Assessment Year 2017-18. The appeal was filed on 03.12.2024. The ld. CIT(A) recorded that the appeal was filed within the prescribed period reckoned from the date on which the intimation was made available to the assessee. A.Y.2017-18 2

2.

The assessee, in substance, has challe

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 10(10)

All 47 judgments and leading authorities on Section 10(10) →

Recent GST High Court judgments

Search GST case law →