DEVENDRA KUMAR GUPTA,AJMER vs. CIT(APPEALS), DELHI

1 ITA No. 17/JP/2023 Shri Devendra Kumar Gupta, Ajmer. आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ds le{k BEFORE: HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER vk;dj vihy la-@ITA No. 17/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2020-21. cuke Shri Devendra Kumar Gupta, The CIT (Appeals) Vs. E-6, Naka Madar, GC road, Delhi. Madhuban Colony, Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. ABMPG 5677 N

vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None. jktLo dh vksj ls@ Revenue by : Ms Monisha Choudhary (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 03/05/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 17/05/2023 vkns'k@ ORDER

PER: SANDEEP GOSAIN, J.M.

This appeal by the assessee is directed against the order of ld. CIT(A),

National Faceless Appeal Centre (NFAC), Delhi dated 27.12.2022 for the assessment year 2020-21. The assessee has raised the following grounds of appeal :-

2 ITA No. 17/JP/2023 Shri Devendra Kumar Gupta, Ajmer.

employee of M/s. Ajmer Vidhyut Vitran Nigam Ltd. and has claimed an amount of

Rs. 12,09,600/- being leave encashment received as exempt under section 10(10AA)

of the IT Act. However, the AO, CPC while processing the return of income has

allowed exemption of only Rs. 3,00,000/- as against 100% exemption claimed by the

appellant. Aggrieved by the order of AO, CPC, the assessee preferred appeal before

ld. CIT (A), who also dismissed the appeal of the assessee taking into consideration

the judgment of Hon’ble Delhi High Court in the case of Kamal Kumar Kalia vs. Union

of India (2020) 268 Taxman 398 (Delhi HC).

vide order sheet dated 03.05.2023 the application for seeking adjournment was

rejected and the matter was heard in the open court.

through the orders passed by the revenue authorities. From the record, I noticed

that the ld. CIT (A) has dealt with the issue on merits in para 5.1.1 to 5.1.4 of his

order and the same is reproduced herein below :-

“5.1.1. The brief facts of the case are that the appellant who has retired is an employee of M/s Ajmer Vidhyut Vitran Nigam Ltd and has claimed an amount of Rs 12,09,600/- being leave encashment received as exempt u/s 10(10AA) of the Act. However, the AO, CPC while processing the return of income has allowed exemption of only Rs 3,00,000/- as against 100% exemption claimed by the appellant. Hence, this appeal.

3 ITA No. 17/JP/2023 Shri Devendra Kumar Gupta, Ajmer.

5.1.2 I have considered the facts of the case as also the submissions of the appellant. The appellant is a retiree from M/s Ajmer Vidhyut Vitran Nigam Ltd., which has been established under the Companies Act, 1956 by Govt of Rajasthan. The Ajmer Discom has been created with the principal object of engaging in the business of distribution and supply of electricity in 11 districts of Rajasthan. It is seen that the appellant has merely claimed that he is working as a State Government Employee whereas the pension and other emoluments have been issued by AJMER VIDHYUT VITRAN NIGAM LTD. The same is also appearing as a Public Sector Undertaking on the official website of Comptroller & Auditor General in cag.gov.in and also under Rajasthan PSU's in the website indianpsu.com and other publicly available documents. Hence, there is no confusion that the company Ajmer Vidhyut Vitran Nigam Ltd is a State Government Public Sector Undertaking and appellant is an employee of this State PSU. No evidence to the contrary has been furnished despite opportunity granted. Here, reliance is placed on the decision of Hon'ble Delhi High Court in the case of Kamal Kumar Kalia Vis Union of India (2020) 268 Taxman 398/ 313 CTR 779 (Delhi) (HC) dated 08.11.2019, wherein the issue under consideration was whether the appellant being employee of Public Sector Undertaking (PSU) and Nationalised Banks can be treated as government employee for the purpose of exemption u/s 10(10AA)(1) of IT Act. In the said case, the Hon'ble High Court held as under: "The petitioners, who were the employees of the Public Sector Undertaking and Nationalised Banks, filed writ contending that they were discriminated against Central Government and State Government employees. The Central Government and State Government employees are granted complete exemption in respect of the cash equivalent of the leave salary for the period of earned leave standing to their credit at the time of their retirement. Dismissing the petition the Court held that merely because Public Sector Undertaking and Nationalised Banks are considered as 'State' under article 12 of the Constitution of India for the purpose of entertainment of proceedings under Article 226 of the Constitution and for enforcement of fundamental

4 ITA No. 17/JP/2023 Shri Devendra Kumar Gupta, Ajmer.

right under the Constitution, it does not follow that the employees of such Public Sector Undertaking, Nationalised Banks or other institutions which are classified as ‘State' assume the status of Central Government and State Government employees, Accordingly the petition is rejected," 5.1.3 Further, in the case of KPTCL Davangere V/S ITO (2018), the Hon'ble ITAT, Bangalore vide its order in ITA No 170 ITD 587 (Bang.) (Trib) has held that assessee being a statutory corporation its employees could not be regarded as State or Central Government employees and, therefore, exemption under S.10(10AA)(i) was not available and assessee was liable to deduct tax at source. 5.1.4 In view of the above, the action of the AO of restricting the exemption u/s 10(10AA) to Rs 3,00,000/- is found to be in order. These grounds of appeal are, therefore, dismissed.”

After having meticulously gone through the findings of the ld. CIT (A), I noticed that

it is an undisputed fact that assessee had retired as an employee of M/s. Ajmer

Vidhyut Vitran Nigam Ltd. and had claimed an amount of Rs. 12,09,600/- being

Leave Encashment received as exempt under section 10(10AA) of the IT Act.

However, while processing the return of income, the AO had allowed exemption of

Rs. 3,00,000/- as against 100% exemption claimed by the assessee. The ld. CIT (A)

also upheld the order of the AO. Now the only question raised before me is as to

whether the assessee is entitled for 100% exemption under section 10(10AA) being

a retiree/employee of M/s. Ajmer Vidhyut Vitran Nigam Ltd. In this regard, from

the record, I also noticed that the assessee had merely claimed that he was working

as State Government Employee whereas the pension and other emoluments have

been issued by M/s. Ajmer Vidhyut Vitran Nigam Ltd. The said M/s. Ajmer Vidhyut

Vitran Nigam Ltd. is appearing as a Public Sector Undertaking on the official website

5 ITA No. 17/JP/2023 Shri Devendra Kumar Gupta, Ajmer.

of Comptroller & Auditor General in cag.gov.in and also under Rajasthan PSU’s in the

website indianpsu.com and other publicly available documents. Therefore, by

considering these facts, there remains no confusion that the company M/s. Ajmer

Vidhyut Vitran Nigam Ltd. is a State Government Public Sector Undertaking.

Therefore, while relying upon the decision of Hon’ble Delhi High Court in the case of

Kamal Kumar Kalia vs. Union of India (2020) 268 Taxman 398 (Delhi) dated

08.11.2019 wherein the Hon’ble High Court while dealing with the identical issue had

held that employees of Public Sector Undertaking (PSU) and Nationalized Banis or

other Institutions which are classified as ‘State’ cannot be assumed the status of

Central Government and State Government employees and the said decision was

also followed by the Coordinate Bench of ITAT Bangalore in the case of KPTCL

Davangere vs. ITO, 170 ITD 587 (Bang.)(Trib.) and the ld. CIT (A) while rightly

following the aforementioned order, had dismissed the appeal of the assessee. No

contrary decision has been placed on record before me in order to contradict the

well reasoned findings recorded by the ld. CIT (A). Therefore, I see no reason to

interfere with or to deviate from the well reasoned findings recorded by the ld. CIT

(A). The appeal filed by the assessee stands dismissed.

Order pronounced in the open court on 17/05/2023.

Sd/- ¼lanhi xkslkbZ½ (SANDEEP GOSAIN) U;kf;d lnL;@Judicial Member Jaipur fnukad@Dated:- 17/05/2023.

6 ITA No. 17/JP/2023 Shri Devendra Kumar Gupta, Ajmer. Das/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant-Shri Devendra Kumar Gupta, Ajmer. 2. izR;FkhZ@ The Respondent- The CIT (A) Delhi. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 17/JP/2023} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत