DINESH KUMAR,RAIGAD, MAHARASHTRA vs. DEPUTY DIRECTOR OF INCOME TAX, CENTRALIZED PROCESSING CENTRE (CPC), BENGALURU, BENGALURU

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ITA 134/PUN/2024Status: DisposedITAT Pune19 June 2024AY 2022-23Bench: SHRI R.K. PANDA (Vice President), SHRI SATBEER SINGH GODARA (Judicial Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal followed a precedent case (Narender Singh Yadav Vs. ACIT) which held that employees of government organizations are entitled to leave encashment exemption. The Tribunal adopted this reasoning to allow the assessee's appeal.

What were the facts?

The assessee, a retired employee of ONGC (a PSU), claimed exemption for leave encashment under Section 10(10AA). The lower authorities disallowed this exemption, stating that PSU employees are not government employees for the purpose of this exemption.

What were the issues?

Whether leave encashment exemption under Section 10(10AA) is available to employees of Public Sector Undertakings (PSUs) who are not directly government employees.

Which sections of the Income-tax Act were involved?

Section 10(10AA)

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.K. PANDA & SHRI SATBEER SINGH GODARA

For Appellant: Shri None
For Respondent: Shri Ramnath P. Murkunde

आदेश / ORDER

PER S.S. GODARA, JM :

1.

This assessee’s appeal for assessment year 2022-23 arises against the CIT(A)/Addl/JCIT(A)-4, Delhi’s order dated 22.12.2023 passed in DIN & Order No. ITBA/APL/S/250/2023-24/1059021449(1), in proceedings u/s. 250 of the Income Tax Act, 1961; in short “the Act”.

Case called twice. None appears at the assessee’s behest. We accordingly proceeded ex-parte against him.

2.

It emerges at the outset that with the able assistance coming from the Revenue side that the assessee’s sole substantive grievance raised herein challenges correctness of both the lower authority’s action disallowing section 10 (10AA) exemption for the sole reason that he is not a government employee since retired from a public sector undertaking “PSU” namely Oil and Natural Gas Corporation Limited (ONGC). Mr. Murkunde vehemently supported the impugned leave encashment disallowance in very terms and in the light of Kamal Kumar Kalia Vs. Union of India (2019) 111 taxmann.com 409 (Del.) that such an exemption claim is not admissible in case of PSU employee.

3.

We notice in this factual backdrop that case law (2023) 152 taxmann.com 187 (Jaipur) Narender Singh Yadav Vs. ACIT has already rejected the Revenue’s stand in an instance of government organization’s employee as under :

“2.4 After hearing both the parties at length and also perusing the material placed on record as well as the orders of the Revenue Authorities, we find from the records that the assessee had been working in Malviya National Institute of Technology, Jaipur (Raj) and as per Govt. Order/Gazette Notification of Govt. of India issued on 6th June 2007 (PB 10-12) and Office order dated 11-10-2022 (PB 2IA), it is demonstrated that Malviya National Institute of Technology, Jaipur (Raj) is a Govt. Organisation. However, nothing rebuttal has been filed by the Revenue Authority and even no fault has been pointed out by the Revenue Authority in the said Gazette Notification and Office Order relied UpO:J. by the ld. AR of the assessee. Therefore, we have no option except to rely upon un-rebutted public documents in the shape of Gazette Notification and Office Order for reaching the conclusion that Malviya National Institute of Technology, Jaipur (Raj) is a Govt. Organisation. Apart from above, we have also noticed that the Id. CIT(A) while rejecting the claim of the assessee has solely relied upon the decision of Hon'ble Delhi High Court in the case of Kamal Kumar Kalia (supra). However, the para materia contained in the said judgement of the facts are altogether different from the facts of the present case as in the case of Kamal Kumar Kalia (supra). It was an undisputed fact that the petitioner in that case was employee of public sector undertaking and Natonalised Bank. Thus, it was held by the Hon'ble Court that public sector undertaking and nationalized banks cannot be treated as Govt. Employee. However, the facts in the present case of the assessee are altogether di fferent. The Id. AR of the assessee has placed on record the Govt. Gazette Notification and Office Order to demonstrate that Malviya National Institute of Teehnology, Jaipur (Raj) is a Govt. Organisation. Thus in our view, the findings of the Id. CIT(A) are based on incorrect assumption of facts. Since as per the documents, Malviya National Institute of Technology, Jaipur (Raj) is a Govt. Institution, therefore, the assessee being an employee of Malviya National Institute of Technology, Jaipur (Raj) is entitled for full exemption of earned leave encashment on retirement. In view of the above deliberation, the appeal of the assessee is allowed.”

4.

We adopt the foregoing discussion mutatis mutandis to accept the assessee’s sole and substantive ground in very terms. Ordered accordingly.

5.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open court on 19th June, 2024.

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