NARENDRA KUMAR MISHRA,BHOPAL vs. ITO-3(1), BHOPAL, BHOPAL

ITA 233/IND/2025Status: DisposedITAT Indore27 February 2026AY 2020-2143 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the delay in filing the appeal is condoned. The Tribunal found that the assessee has demonstrated a "sufficient cause" for the delay, citing the medical exigencies faced by him and his family, and the fact that he is a differently-abled person. The Tribunal relied on the Supreme Court's decision in Collector, Land Acquisition Vs Mst. Katiji and others to adopt a justice-oriented approach. Regarding the substantive issue of leave encashment exemption, the Tribunal admitted an additional ground raised by the assessee concerning exemption under Section 10(10B) for ex-gratia payment, which was not initially part of the grounds of appeal. The Tribunal noted that the assessee is a differently-abled person, lacks technical knowledge, and became aware of the relief under Section 10(10B) after certain judicial pronouncements and representations. The Tribunal found that the issue required fresh examination at the AO level and therefore remanded the issue of ex-gratia to the file of the AO for fresh adjudication. The additional grounds were allowed for statistical purposes. Consequently, the appeal was partly allowed for statistical purposes.

What were the facts?

The assessee, Narendra Kumar Mishra, an individual and a differently-abled person, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order dated 12.06.2023 passed by the Commissioner of Income-Tax (Appeals)-NFAC, Delhi, which upheld the assessment order dated 22.08.2022 passed by the Assessing Officer (AO) under section 143(3) r.w.s. 144B of the Income-tax Act, 1961, for Assessment Year 2020-21. The appeal was filed with a delay of 566 days, attributed by the assessee to his father's cancer treatment, his own disability, and other family medical emergencies. The ITAT condoned the delay. The core dispute pertains to the exemption claimed by the assessee on leave encashment received upon retirement from BSNL. The AO allowed only Rs. 3,00,000/- as exemption under section 10(10AA)(ii), making an addition of Rs. 9,85,132/-, on the grounds that the assessee ceased to be a Central Government employee upon absorption in BSNL.

What were the issues?

1. Whether the ITAT has the power to condone the delay in filing the appeal, and if so, whether the assessee has shown sufficient cause for the delay under Section 253(5) of the Income-tax Act, 1961. The assessee argued that the delay was due to unavoidable medical circumstances affecting him and his family, not negligence. The Revenue did not object to the condonation. 2. Whether the assessee, having been absorbed from Central Government service into BSNL, is eligible for the full exemption of Rs. 12,85,132/- on leave encashment under Section 10(10AA) of the Act, or if the exemption is limited to Rs. 3,00,000/- as held by the AO. The assessee contended that the AO was not justified in confirming the addition. The Revenue, through the AO's order, argued that upon absorption into BSNL, the assessee ceased to be a Government servant, and Rule 37A/37B clause (4) deems such employees to have retired from Government service, thus limiting the exemption to Rs. 3,00,000/- for non-Central Government employees.

Which sections of the Income-tax Act were involved?

Section 10(10AA),Section 10(10B),Section 143(3),Section 144B,Section 139(1),Section 139(4),Section 253(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Shri Ashish Goyal & Shri N.D. Patwa, ARs
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 02.02.2026Pronounced: 27/02/2026

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 12.06.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 22.08.2022 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 143(3) r.w.s. 144B of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2020-21, the assessee has filed this appeal.

2.

The registry has informed that the present appeal is delayed by 547

days and therefore time-barred. The assessee has filed an application/

Narendra Kumar Mishra ITA No. 233/Ind/2025 - AY 2020-21

affidavit for condonation of delay;

The order continues below.

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