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

ITA 524/CHANDI/2026Status: DisposedITAT Lucknow28 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 added back Rs.10,00,000/- under section 10(10) for gratuity and Rs.3,00,000/- under section 10(10AA) for leave encashment, totaling Rs.13,00,000/-, as these exemptions were not claimed in the prescribed column of the return. The assessee received an intimation dated 20.03.2019. The assessee later learned of the demand through an email dated 17.09.2024 and the intimation was made available to him on the portal on 21.11.2024. The assessee appealed to the CIT(A)-1, Nashik, challenging the adjustment.

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 noted 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. The Tribunal observed that the merits of the assessee's entitlement to exemption had not been examined in detail by the lower authorities. 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 is to consider the relevant statutory provisions and documentary evidence, including Form No.16. The Tribunal explicitly stated that it had not expressed any opinion on the ultimate allowability of the exemptions and that the Assessing Officer shall adjudicate independently. The order of the CIT(A) was set aside to this extent.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, 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) when such claim was not reflected in the prescribed column of the original return filed under section 139(1). Assessee's contentions: The assessee argued that the gratuity and leave encashment received on retirement were eligible for exemption under sections 10(10) and 10(10AA). 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, and therefore, the CPC was justified in not allowing the exemption while processing under section 143(1). The CIT(A) relied on the decision in Goetze (India) Ltd. vs. CIT, holding that an omitted claim could not be entertained otherwise than through a revised return. However, the learned DR fairly submitted that the claim of the assessee is otherwise maintainable on merits.

Which sections of the Income-tax Act were involved?

Section 10(10),Section 10(10AA),Section 143(1),Section 139(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.

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