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Facts
The assessee appealed against the CIT(A)'s order for AY 2019-20, which confirmed additions related to a reassessment order (u/s 147 r.w.s. 144B), disallowance of a bogus donation (u/s 80GGC) and an addition of Rs. 1,51,216/- for Death-cum-Retirement Gratuity claimed as exempt u/s 10(10). While the CIT(A) allowed the exemption for leave encashment, the gratuity addition was upheld.
Held
The Tribunal, after examining Section 10(10) of the Income Tax Act, held that Death-cum-Retirement Gratuity received by the assessee is exempt from tax. Consequently, the addition of Rs. 1,51,216/- made on this account was deleted, and the appeal was allowed.
Key Issues
Whether the order passed u/s 147 r.w.s. 144B was erroneous and invalid; whether the disallowance of bogus donation u/s 80GGC was justified; and whether the addition for gratuity claimed as exempt u/s 10(10) was correctly confirmed.
Sections Cited
250, 147, 144B, 80GGC, 148, 10(10), 10(10AA)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
(Assessment Year: 2019-20) Sonia Pravin Rajani, NFAC, Delhi Vs. A-102, Raj Avenue, Present jurisdiction Nr. Sahjanand Bungalow, New CG Income Tax Officer, Road, Ahmedabad-382 424 Ward 5(3)(2), [PAN : AHUPV 0872 C] Ahmedabad (Appellant) .. (Respondent) Appellant represented by : Shri Biren Shah, AR Respondent represented by: Shri Veerbadram Vislavath, Sr DR Date of Hearing 13.01.2026 Date of Pronouncement 13.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal has been filed by the Assessee against the order dated 31.07.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short) for Assessment Year 2019-20.
The assessee has raised following grounds of appeal :-
1. In the law and circumstances of the case, Ld. CIT(A) erred in holding the ground raised with regard to order passed u/s 147 r.w.s. 144B of the Act being erroneous and invalid.
2. In the law and facts and circumstances of the case, the LD. CIT(A) has erred in law and on facts in confirming disallowance of bogus donation when the claim u/s 80GGC was explicitly withdrawn while filing return in response to notice u/s 148 of the Act.
3. In the law and circumstances of the case, the Ld. CIT(A) has erred in confirming addition in respect of gratuity of Rs. 1,51,216/- claimed as exempt u/s 10(10) of the Act, on the ground that the assessee has failed to prove eligibility when the assessee had submitted from Form 16 issued by the employer.”
We have heard the rival submissions of both parties and perused the material available on record. The Assessing Officer made an addition of Rs. 68,924/- received by the assessee on account of leave encashment and Rs.1,51,216/- on account of Death-cum- Sonia Pravin Vs. ITO Asst.Year :2019-20 - 2– Retirement Gratuity. The Ld. CIT(A) has allowed the claim of exemption in respect of leave encashment of Rs.68,924/-, but confirmed the addition relating to gratuity amounting to Rs.1,51,216/-.
The provisions of Section 10(10) of the Act read as under:-
“10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included— …….
…….
(10) (i) any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence services ; (ii) any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does not exceed an amount calculated in accordance with the provisions of sub-sections (2) and (3) of section 4 of that Act ; (iii) any other gratuity received by an employee on his retirement or on his becoming incapacitated prior to such retirement or on termination of his employment, or any gratuity received by his widow, children or dependants on his death, to the extent it does not, in either case, exceed one-half month's salary for each year of completed service, calculated on the basis of the average salary for the ten months immediately preceding the month in which any such event occurs, subject to such limit as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government :
Provided that where any gratuities referred to in this clause are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this clause shall not exceed the limit so specified :
Provided further that where any such gratuity or gratuities was or were received in any one or more earlier previous years also and the whole or any part of the amount of such gratuity or gratuities was not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this clause Sonia Pravin Vs. ITO Asst.Year :2019-20 - 3– shall not exceed the limit so specified as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.
Explanation.—In this clause, and in clause (10AA), "salary" shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule ;”
In view of the above provisions of Section 10(10) of the Act, the Death-cum- Retirement Gratuity received by the assessee is exempt from tax. Accordingly, the addition of Rs.1,51,216/- made on this account is deleted. The appeal of the assessee is, therefore, allowed.
In the result, the appeal of the assessee is allowed.
Heard, dictated, pronounced in open court today on 13.01.2026 Sd/- Sd/-