2025 (10) TMI 994

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....d the condonation application for condoning the delay. 3. Ld. DR strongly opposed the condonation of delay. 4. After considering the condonation application filed by the assessee in the present appeal, we condone the delay for which sufficient cause is shown, and admit the appeal for adjudication. 5. The assessee, a retired employee of Union Bank of India, received a sum of Rs. 9,56,280/- on account of leave encashment upon his superannuation. He filed his return of income on 30.11.2021 claiming the entire amount as exempt under section 10(10AA). The Centralised Processing Centre (CPC), Bengaluru while processing the return under section 143(1) restricted the exemption to Rs. 3,00,000 and computed a demand. 6. Aggrieved, the ass....

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....ated at par with Government employees for the purposes of section 10(10AA). Similarly, in Babulal Patel v. ITO (ITAT Mumbai), the Tribunal has held that for PSU employees, clause (ii) alone applies. In view of the above, the exemption is restricted to Rs. 3,00,000 and the appeal is dismissed." 7. Before us, the assessee argued that the entire leave encashment should be exempt, placing reliance on the decision of the Chandigarh Bench of the Tribunal in Shyam Singh v. ITO and on other decisions including Babulal Patel and Kamal Kumar Kalia. He submitted that the failure of CBDT to timely issue notifications should not prejudice the assessee, and that the subsequent enhancement of the limit to Rs. 25,00,000 shows legislative intent to exten....

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....ether on superannuation or otherwise; (ii) any payment of the nature referred to in sub-clause (i) received by an employee, other than an employee of the Central Government or a State Government, in respect of so much of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise as does not exceed ten months, calculated on the basis of the average salary drawn by the employee during the period of ten months immediately preceding his retirement, subject to such limit as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government." 9.2 The language of the provis....

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....wever, it is material to note that the said notification was issued on 1 April 2023 and, by its plain terms, was prospective in nature. The Jaipur Bench had not examined the specific issue as to whether the notification could be given retrospective effect; the Bench merely proceeded to extend the benefit. A bare perusal of the notification, as has also been extracted by the learned CIT(A) in the impugned order, makes it manifest that the benefit was intended to be operative prospectively and not with retrospective force. Therefore, in our considered opinion, the reliance placed by the assessee on Ram Charan Gupta is of no avail. 9.6 The assessee further placed reliance on the decisions of Vijay Kumar Jain (Agra Bench), Devendra Singh Bha....