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Facts
The assessee, a non-government employee, claimed full exemption of Rs. 57,57,439 for leave encashment under Section 10(10AA) in their ITR for AY 2022-23. The Assessing Officer, during processing under Section 143(1), restricted this exemption to Rs. 3,00,000, which was subsequently confirmed by the CIT(A).
Held
The Tribunal upheld the orders of the lower authorities, ruling that since the assessee is neither a Central nor a State Government employee, the exemption for leave encashment under Section 10(10AA) is restricted to Rs. 3,00,000 as per the CBDT notification.
Key Issues
Whether a non-government employee is entitled to full exemption for leave encashment under Section 10(10AA) or if the exemption is restricted to Rs. 3,00,000 as per CBDT notification.
Sections Cited
10(10AA), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, COCHIN
Before: Shri Inturi Rama Rao
Asst.Year 2022-2023 Sri.Puzhakkal Rappai Jojo The Income Tax Officer Thusharam, Oneway Market v. Ward 1(1) Road, Irinjalakuda Thrissur. Thrissur – 680 121. PAN : ACFPJ5416J. (Appellant) (Respondent) Appellant by : --- None--- Respondent by : Smt.Leena Lal, Senior AR Date of Date of Hearing : 04.02.2025 Pronouncement : 11.02.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 20.09.2024 having DIN & Order No.ITBA/APL/S/250/2024-25/1068887775(1) for the assessment year 2022-2023.
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.57,57,439. The said return of income was processed u/s.143(1) of the Act vide intimation dated 16th 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.
Order pronounced on this 11th day of February, 2025.