TaxTMI 
TaxTMI 
2017 (2) TMI 320
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.... of gratuity received from the State Government after retirement by restricting the exemption claimed u/s 10(10)(i) of the Act to Rs. 3,50,000/-. (v) making an addition of Rs. 2,01,170/- on account of arrear of leave encashment received from the State Government after retirement by restricting the exemption claimed u/s 10(10AA) of the Act." 2. Inviting attention to the assessment order and the impugned order, it was submitted by the Ld. AR that the issues are covered in favour of the assessee by virtue of the consistent orders of the ITAT wherein they have been discussed in the cases of various employees of Chaudhary Charan Singh HAU who came before the ITAT on identical issues. Inviting attention to the order dated 15.06.2016 in the ca....
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....ions and perused the material available on record. A perusal of the record shows that a return declaring income of Rs. 3,20,860/- was filed by the assessee. The said return was processed under section 143(1). The assessee admittedly was an employee of Chaudhary Charan Singh, Haryana Agricultural University, Hisar and retired from service before 24.05.2010 and received salary i.e. pension and other pensionary benefits during the year under consideration. The assessee in the computation of total income annexed with the return of income furnished details of receipt of arrears of Gratuity amounting to Rs. 10,00,000/- and arrears of leave encashment amounted to Rs. 2,01,170/- and claimed the same as exempt u/s 10(10) of the Income Tax Act, 1961.....
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.... is allowed. The relevant extract from ITA No.1307/Del/2016 order dated 16.06.2016 is reproduced hereunder:- 4. "I have heard the rival submissions and perused the relevant material on record. The controversy in this appeal can be viewed separately in respect of receipt of gratuity amount and leave encashment. In so far as the addition on account of gratuity received by the assessee amounting to Rs. 6,50,000/- is concerned, it is found that the case of the assessee is that this amount falls u/s 10(10)(i) of the Act. On the contrary, the Revenue has treated it as a case falling u/s 10(10)(iii). In order to appreciate the rival contentions in right perspective, it will be apposite to set out the relevant parts of section 10, as under :- `....
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....atuities was or were received in any one or more earlier previous years also and the whole or any part of the amount of such gratuity or gratuities was not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this clause shall not exceed the limit so specified as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.' 5. A careful perusal of the above provision indicates that if a case falls under clause (i) of section 10(10), the entire amount of death-cum-retirement gratuity becomes exempt. Au contraire, if a case falls under sub-clause (iii) of section 10(10), then, the exemption is limited to....
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.... the assessee's Pension Payment Order, which depicts the assessee's designation as Sr. Scientist, Department of Plant Breeding. On the 'Pensioner's Portion' of this document, there is a reference to Rule 10, 11 and note thereunder of Civil Services Rules (CSR) V.II. As the assessee's pension has been computed under Civil Services Rule, it goes to show that the assessee was holding a 'civil post' at the time of his retirement. No other contrary material has been placed on record by the ld. DR to show that the assessee was holding a post other than civil post. 7. The second requirement is that such civil post must be under a State. Page 20 of the paper book is a copy of Haryana and Punjab Agricultural University Act, 1970, which was passed ....
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....e Chief Justice of a High Court, having the power to issue rules, bylaws or regulations having the force of law.' The above discussion manifests that CCSU is covered within the meaning of 'State'. 8. As the assessee is found to be an employee holding a civil post under a State, in my considered opinion, the provisions of section 10(10)(i) are fully attracted in this case entitling him to exemption for the amount under consideration. Once a case falls under clause (i) of section 10(10), the same cannot be brought within the purview of clause (iii) of section 10(10). I, therefore, hold that the assessee is entitled to exemption u/s 10(10)(i) in respect of gratuity amount received in total upto Rs. 10 lac, which covers a sum of Rs. 6,50,000/....