RAM AVTAR VIJAY,JAIPUR vs. ITO WD 4(2), JPR, JAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR “SMC” BENCH, JAIPUR (PHYSICAL HEARING) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER & SHRI PRAKASH, ACCOUNTANCT MEMBER ITA No: 1364/JPR/2026 Assessment Year: 2019-20

Ram Avtar Vijay The ITO, 7, Kalyan Marg IIIrd Sita Ward-4(2), Vs Bari Tonk Road, Jaipur. Jaipur. PAN: AAUPV4506A (Respondent) (Appellant)

Assessee Represented: Sh. Ram Avtar Vijay, Assessee Revenue Represented: Mrs. Aarti Rawat, JCIT Date of hearing : 07-10-2026 Date of pronouncement : 27-10-2026 ORDER PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, Ram Avtar Vijay (hereinafter referred to as the ‘assessee’) by filing the present appeal, sought to set aside the impugned order dated 22.03.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] qua assessment year 2019-20 on the ground that:- “1. “Impugned order passed by Ld. CIT(A) is bad in law and fact as well as against the CBDT notification number 31/2023, revising the limit u/s 10(10AA) to Rs. 25,00,000/-, as such liable to be set aside.”

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laws in filing the appeal; that he was entirely dependent upon his tax consultant, who has not guided the assessee correctly in condoning the delay in filing the present appeal; that Shri Rajash Gupta tax consultant has filed an affidavit stating therein that he could not intimate the assessee to file the appeal within limitation against the order dated 22.03.2023 passed u/s 250 of the Act. 5. However on the other hand, Ld. DR for the Revenue opposed the application on the ground that inordinate delay in filing the appeal cannot be entirely attributed to the tax consultant and prayed for dismissal of the appeal. 6. Keeping in view that facts and circumstances of the case inter-alia that the assessee is a senior citizen having retired from Rajasthan Cooperative Dairy Federation; that the assessee was not conversant with the Income Tax Act, its rules and regulations to challenge the assessment order before the Ld. CIT(A) and then before the Tribunal, but was entirely dependent upon Shri Rajesh Gupta tax consultant, who has not guided him properly; that the assessee was kept in dark by not filing the appeal against the impugned order passed by Ld. CIT(A); that assessee has also filed an affidavit of sh. Rajesh Gupta stating therein that he has not been

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informed by his tax consultant and could not file the appeal within limitation, we are of the considered view that the assessee being a retired employee was not well versed with the rules to file the appeal and was suffering from various old age ailment, who cannot be made to further suffer, particularly when he has hired the services of a tax consultant, who has not filed the appeal within time nor he has intimated the assessee. Mistake or negligence on the part of tax consultant in not filing the appeal in time, delay cannot be attributed to the assessee, who has the right to be heard before passing of any order against him. Following the law laid down by Hon’ble Supreme Court in case of Collector, Land Acquisition vs MST Katiji, (1987) 2 SCC 107, liberal interpretation is being given to the provisions for condonation of delay and as such we find it a “sufficient cause” to condone the delay, hence the delay is hereby condoned. The appeal is being heard on merits. 7. We have heard Ld. ARs for the assessee and Ld. DR for the Revenue and perused the record available on file. 8. Undisputedly, the assessee being a retired employee has received leave encashment to the tune of Rs. 7,60,770/- and claimed exemption thereof u/s 10(10AA) of the Act. The Assessing

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Officer as well as Ld. CIT(A) by applying section 10(10AA(ii) proceeded to hold that maximum exemption under this section is Rs. 3,00,000/-, thus disallowed the remaining amount of Rs. 4,60,770/- 9. In the backdrop of the aforesaid facts and circumstances of the case the sole question arises for determination is “as to whether the assessee, who has retired after putting in long service is entitled for exemption of the entire amount of Rs. 7,60,770/- received by him on account of leave encashment?” 10. The assessee relied upon the decision rendered by the Hon’ble Delhi High Court in case of Kamal Kumar Kalia & Ors. Vs. Union of India & Ors. in WP(C) 11846/2019 dated 08.11.2019, wherein claim of the assessee for exemption/deduction of Rs. 6,97,100/- was allowed. The assessee also relied upon CBDT notification No. 31/2023 dated 24.05.2023. 11. Now this issue is no more res-Integra as the Coordinate Bench has also decided an identical issue in case of Vijay Kumr Jain vs. ITO in ITA No. 175/Agr/2022 dated 18.06.2025, for ready perusal, operative part thereof is extracted as under:- “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

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High Court has issued a notice to the Union of India in the case of Kamal Kumar Kalia & Ors. Vs. Union 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.” 11. Another coordinate Bench of Jaipur Tribunal vide order dated 31.10.2023 passed in ITA No. 385/JP/2023 for A.Y. 2020-21 in the case of Govind Chhatwani vs. CIT(Appeals), has followed Ram Charan Gupta (supra) and held that the assessee was eligible for the claim of deduction in respect of the exemption of his leave encashment exceeding Rs.3,00,000/-, as the CBDT Notification No. 31/2023 dated 24.05.2023 has raised the limits to Rs.25,00,000/-. 12. It is established principle of law that a circular of CBDT, no doubt, has the force of law, can even supplant the law in case where it is beneficial to the assessee and can mitigate or relax the rigors of law. The powers of CBDT in issuing circular for general guidance are subject to two important conditions. One is that it does not entitle the Income-tax authority including the Board to issue instructions or circulars contrary to the substantive provisions of law or curtailing the relief, to which the assessee is otherwise entitled under law. The circular cannot, therefore, curtail the benefit conferred on the assessee or be contradictory to the Act. Hon’ble Apex Court in Union of India vs. Wood Paper

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Limited AIR 1991 SC 2049 has held that the condition regulating the computation of benefit should be interpreted liberally. 13. In view of this legal position, we are in respectful agreement of what has been held by the afore cited coordinate Jaipur Benches of this Tribunal as noted hereinabove. We accordingly answer the aforesaid question in favour of the assessee and against the Revenue and hold that the appellant/assessee is eligible to claim deduction of Rs.7,51,755/- in view of limits raised to Rs.25,00,000/- vide Notification No. 31/2023 dated 24.05.2023. The appeals is thus liable to be allowed.” 12. So in view of what has been discussed above, we are of the considered view that the assessee, who has received an amount of Rs. 7,60,770/- on account of leave encashment as retrial benefit after putting in long service in Rajasthan Dairy Cooperative Federation is exempted u/s 10(10AA) of the Act. Ld. CIT(A) has erred in confirming the disallowance made by the AO/CPC, hence the AO is directed to allow the claim of the assessee. 13. Resultantly, the appeal filed by the assessee is hereby allowed. Order pronounced in the open court on 27-10-2026 .

Sd/- Sd/- (PRAKASH) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Jaipur Dated:- 27/10/2026. *Santosh. Copy of the order forwarded to: 1. The Appellant- 2. The Respondent- 3. CIT 4. CIT(A)

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