JAGDISH CHANDRA CHATURVEDI,KASGANJ vs. THE ASSESSING OFFICER WARD 4(3)(3), KASGANJ , KASGANJ

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ITA 385/AGR/2024Status: DisposedITAT Agra07 February 2025AY 2022-233 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance of the assessee's section 10(10AA) leave encashment exemption was not permissible in proceedings under section 143(1). The Tribunal reasoned that section 143(1)(a)(i) & (ii) are attracted for arithmetical errors, incorrect claims apparent from the return, or discrepancies with other information, not for issues requiring interpretation of the definition of 'State' Government. The assessee's return did not contain any information that could be treated as apparently incorrect to warrant disallowance under section 10(10AA) during the processing stage. Therefore, the Tribunal reversed the action of the lower authorities. The necessary computation would follow as per law. The appeal was allowed.

What were the facts?

The assessee, Sh. Jagdish Chandra Chaturvedi, filed an appeal for Assessment Year 2022-23 against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC). The dispute arose from proceedings under section 154 of the Income-tax Act, 1961. The lower authorities had restricted the assessee's claim for leave encashment exemption under section 10(10AA) from Rs.13,55,054/- to Rs.3 lakhs. This restriction was initially made in the section 143(1) intimation dated 01.02.2023 and was upheld in the subsequent appellate proceedings.

What were the issues?

1. Whether the disallowance of the assessee's section 10(10AA) leave encashment exemption is permissible in proceedings under section 143(1)(a)(i) & (ii) of the Income-tax Act, 1961, when the issue involves interpretation of the term 'State' Government and its inclusion of the assessee's employer? Assessee's Contention: The assessee argued that disallowing the section 10(10AA) exemption in a section 143(1) proceeding is impermissible. Section 143(1) is applicable for arithmetical errors, incorrect claims, or discrepancies with information like Form 26AS, not for issues requiring interpretation of statutory terms. Revenue's Contention: The Revenue contended that the assessee's case falls under section 143(1)(a)(ii) as it involves an apparently incorrect claim for leave encashment under section 10(10AA).

Which sections of the Income-tax Act were involved?

Section 10(10AA),Section 143(1),Section 143(1)(a)(i),Section 143(1)(a)(ii),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA BENCH, “SMC” AGRA

Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH

Hearing: 07.02.2025Pronounced: 07.02.2025
1.

This assessee’s appeal for assessment year 2022-23, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1067296783(1) dated 05.08.2024 involving proceedings under section 154 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Heard both the parties. Case file perused.

3.

It emerges during the course of hearing that both the learned lower authorities have restricted the assessee’s section 10(10AA) leave encashment claim of Rs.13,55,054/- to Rs.3 lakhs only, in the course of section 143(1) intimation dated 01.02.2023 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 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 before us involving the interpretation of the “State” Government as to whether it includes the assessee’s employer or not.

4.

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 2 | P a g e information, which could be treated as an apparently incorrect one attracting disallowance under Section 10(10AA) in processing itself. We 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.

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