2018 (9) TMI 2152 - HC - Income Tax

Court Rejects Bid to Remove Tax Cap on Leave Benefits for Nationalized Bank Workers, Cites Lack of Discrimination Evidence.

Srikantha Gopal Mandyam Versus Union of India through Secretary Revenue, Ministry of Finance, New Delhi and anr.

The High Court of Bombay dismissed the petition contesting the income tax exemption cap on leave encashment benefits for nationalized bank employees. The ... Ceiling limit for exemption from payment of income tax on leave encashment benefit enjoyed by Central or State Government employees - contention is when Section 10(10AA)(i) of Income Act, 1961 does not prescribe any ceiling limit under clause (ii), such a limit of “ten months” is prescribed for the employees like the petitioner who happen to retire from employment of a nationalized bank - HELD THAT:- The petitioner has not pointed out that Central or State Government employees get cash equivalent to leave salary for period in excess of ten months. As per their service conditions, leave encashment at the time of retirement is limited only to 300 days. Vide clause (ii) identical period is stipulated for petitioner but word employed is “ten months”. Hence, the plea of discrimination is unsustainable. Even otherwise, when employees are under different employers and in different sectors with different service conditions, material on record is insufficient to claim parity. Service conditions of Government servants cannot be compared with employees in banking sector. Petition is rejected as no case made out. The High Court of Bombay rejected the petition challenging the limit on income tax exemption for leave encashment benefit for nationalized bank employees, citing lack of discrimination and insufficient evidence for parity with government employees. No costs were awarded.