2025 (8) TMI 302

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....nder section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], for the assessment year 2021-22, whereby the Ld. CIT(A) confirmed the adjustment made by the Centralized Processing Centre (CPC), Bengaluru under section 143(1) of the Act, restricting the claim of exemption under section 10(10AA)(ii) to Rs. 3,00,000/- and thereby disallowing the excess claim of Rs. 6,00,501/- made by the assessee in respect of leave encashment on retirement. 2. Facts of the Case 2.1 The brief facts of the case, as emanating from the record, are that the assessee, an individual and a resident, filed his original return of income under section 139(1) of the Act for the A.Y. 2021-22 on 30.12.2021, declaring a total income of Rs. 38,32,2....

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....or undertaking-the entire amount of leave encashment on retirement ought to be exempt under section 10(10AA)(i), or in the alternative, at least the relief under section 89(1) ought to have been allowed. 2.4 The Ld. CIT(A), after considering the submissions and legal provisions, dismissed the appeal. In doing so, he held that ONGC being a public sector undertaking (PSU), the assessee could not be treated as a Government employee within the meaning of section 10(10AA)(i). He relied upon the judgment of the Hon'ble Delhi High Court in Kamal Kumar Kalia v. Union of India (2019), wherein it was held that employees of PSUs and nationalised banks, though considered as "State" under Article 12 of the Constitution for the purposes of public law ....

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....d not allowing the exemption exceeding Rs. 3 lakhs u/s 10(10AA)(ii) of the Act considering the invalid Gazette Notification No. SO 588(E) dated 31.05.2002 issued by CBDT effective 01.04.1998. 4. Section 10(10AA)(ii): On merits also, the exemption claimed by the appellant exceeding Rs. 3 lakhs is allowable. 5. General ground: The appellant craves leave to add, amend, alter, or withdraw any ground of appeal. 2.6 During the course of hearing, the learned Authorised Representative (AR) appearing on behalf of the assessee placed on record detailed written submissions, reiterating the grievances raised in the grounds of appeal and inviting attention of the Bench to the alleged violation of section 143(1)(a) ....

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...., and examined the legal provisions and judicial precedents brought to our notice. The appeal raises two principal issues for adjudication: (i) whether the adjustment of Rs. 6,00,501/- under section 143(1)(a) was vitiated in law due to non-issuance of statutory intimation; and (ii) whether the assessee, being a retired employee of a Public Sector Undertaking (ONGC), is entitled to claim full exemption of leave encashment under section 10(10AA) beyond the notified limit of Rs. 3,00,000/-. 4.1 The assessee has emphatically contended that the CPC made the adjustment of Rs. 6,00,501/- to the revised return of income without issuance of any prior notice under section 143(1)(a). This contention is supported by material on rec....