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Facts
The assessee's appeal for AY 2020-21 challenged the CIT(A)/NFAC's refusal to condone a 1333-day delay in filing an appeal. Additionally, it contested the restriction of the assessee's Section 10(10AA) leave encashment claim from Rs. 8,20,020/- to Rs. 3 lakhs during processing under Section 143(1).
Held
The Tribunal condoned the delay in filing the appeal, citing the principle of substantial justice. It further held that disallowing the Section 10(10AA) leave encashment exemption was not permissible under Section 143(1)(a)(i) & (ii) unless there was an apparent arithmetical error or incorrect claim in the return itself, which was not found in this case. The impugned action of the lower authorities was reversed.
Key Issues
1. Whether to condone a significant delay in filing an appeal. 2. Whether disallowance of Section 10(10AA) leave encashment exemption is permissible under Section 143(1)(a)(i) & (ii) without an apparent error in the return.
Sections Cited
Section 143(1), Section 10(10AA), Section 143(1)(a)(i), Section 143(1)(a)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.81/Del/2026 Assessment Year: 2020-21 Sh. Pramod Kumar Tayal, Vs. DCIT, GP-60, Ganganagar, Circle-1(1)(1), Meerut. Meerut PAN: AAKPT2163P (Appellant) (Respondent) Assessee by Sh. Sunil Porwal, CA Department by Sh. Manoj Kumar, Sr. DR
Date of hearing 09.02.2026 Date of pronouncement 09.02.2026 ORDER This assessee’s appeal for assessment year 2020-21, arises against the Commissioner of Income Tax (Appeals)/ Addl./JCIT(A)- 2, Ahmedabad’s DIN and order no. ITBA/APL/S/250/2025- 26/1083032617(1), dated 26.11.2025 involving proceedings under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused. 2. It emerges during the course of hearing with the able assistance coming from both the parties that the learned CIT(A)/NFAC has refused to condone delay of 1333 days in filing of
ITA No.81/Del/2026
the assessee’s lower appeal instituted on 23.08.2025 against the Assessing Officer’s assessment framed on 29.11.2021, thereby holding that the same had not been explained in light of the justifiable reasons. 3. That being the case, I hereby quote Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC), settling the issue long back that all such technical aspects must make way for the cause of substantial justice. Accordingly, the delay caused in filing the appeal before the CIT(A)/NFAC is condoned. 4. Next comes the issue of claim of leave encashment by the assessee wherein the learned lower authorities have restricted his section 10(10AA) leave encashment claim of Rs.8,20,020/- to Rs.3 lakhs only, in the course of section 143(1) intimation dated 29.11.2021 and upheld in the lower appellate discussion. It is in this factual backdrop that the assessee’s first and foremost argument before us is such a course of action disallowing section 10(10AA) leave encashment exemption is nowhere permissible in an instance involving section 143(1)(a)(i) & (ii) of the Act. A perusal of the above statutory provision indicates that the same gets
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ITA No.81/Del/2026
attracted in a case of an arithmetical error apparent from incorrect claim and information in the return disallowance of loss, disallowance of expenditure, disallowance of deduction and addition of income as per Form 26AS etc. than the issue involving the interpretation of the “State” Government as to whether it includes the assessee’s employer or not. 5. The Revenue vehemently argues that the assessee’s case would be covered under section 143(1)(a)(ii) since it is apparently incorrect claim for leave encashment under section 10(10AA) of the Act. The assessee’s return has nowhere declared any such information, which could be treated as an apparently incorrect one attracting disallowance under Section 10(10AA) in processing itself. I thus reverse the learned lower authorities’ impugned action rejecting the assessee’s section 10(10AA) leave encashment exemption claimed in above terms. Necessary computation shall follow as per law. 6. This assessee’s appeal is allowed. Order pronounced in the open court on 9th February, 2026 Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 23rd February, 2026. 3 | P a g e
ITA No.81/Del/2026
RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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