SAHADEVAN NALUPURAKKAL,KOZHIKODE vs. ITO,WARD 2(2), KOZHIKODE

Briefly, the facts of the case are that the assessee is an individual deriving income from salary. The return of income for the assessment year 2022-2023 was filed on 27th July, 2022 claiming exemption u/s.10(10AA) of the Income-tax Act, 1961 (“the Act” hereinafter) of Rs.58,17,677. The said return of income was processed u/s.143(1) of the Act vide intimation dated 18th March, 2023 after making adjustment of disallowance of claim of exemption of leave encashment of

Being aggrieved with the order of the Assessing Officer (“the AO” hereinafter) against the said adjustment, an appeal was filed before the CIT(A), who vide the impugned order, confirmed the action of the AO.

Being aggrieved with the order of the CIT(A), the assessee is appeal before me in the present appeal. The learned Senior DR placed reliance on the judgment of the Hon’ble Patna High Court in the case of Purnendu Shekhar Sinha v. Union of India (2024) 159 taxmann.com 746 (Patna). When the appeal was called, none appeared on behalf of the assessee, despite due service of notice. Therefore, I proceed to dispose of this appeal on merits after hearing the learned Senior DR.

I have heard the learned Senior DR and perused the material available on record. The issue in the present appeal is with regard to the quantum of deduction of leave encashment u/s.10(10AA) of the Act. Undisputedly, the assessee is neither a Central Government nor a State Government employee. Therefore, the amount received towards encashment of leave is exempt to the extent of Rs.3,00,000 as notified by the CBDT. In my opinion, the AO rightly restricted the amount of deduction to the extent of Rs.3 lakh and the CIT(A) justified in upholding the view taken by the AO. Therefore, I do not find any reason to interfere with the orders of the lower authorities.