TaxTMI 
TaxTMI 
2026 (3) TMI 1280
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.... dated 29.10.2021 passed under section 154 of the Income Tax Act, 1961, for the Assessment Year 2019-20. The word 'Act' herein this order would mean Income Tax Act, 1961. 2. The assessee has raised following grounds of appeal:- Recently the Central Board of Direct Taxes Suomotu revised the limit for deduction u/s 10(10AA) of the Act and the revised limit now stood at Rs. 25,00,000 as specified vide notification no. 31/2023 issued by the ministry of finance. Since the leave encashment amount as claimed by the assessee is amount to Rs. 837542/- which is below the revised limit of leave encashment exempt prescribed by the Board, the assessee is eligible to claim of deduction of said Rs 837542/- Based on these observations the ld. A....
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....- "....3. It transpires during the course of hearing that assessee's sole substantive ground raised in the instant appeal challenges both the learned lower authorities action denying section 10(10AA) leave encashment exemption thereby holding that she is not entitled for the same since employed with Bank of Baroda and not a Central or State Government Department. 4. It is next noticed that recently the tribunal in Ram Charan Gupta, Jaipur vs. ITO, Ward 4(2), Jaipur, in ITA No.408/JPR/2022 dated 27.6.2023 has already rejected the Revenue's very stand as under:- 3. Succinctly, the fact as culled out from the records is that the assessee who has retired is a bank employee and has claimed an amount of Rs. 6,97....
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....rned 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 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." 5.2.3 Further, in the case of KPTCL Davangere V/s ITO (2018), the Hon'ble ITAT,....
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.... heard as it appears that this addition was made by treating the employee as non- government employee although no specific reasons has been informed to appellant. In fact, this organization is regulated by Bylaws made by central Government, thus by no means of stretch of imagination this organization can be treated as non- central government. Therefore, AO was not justified to disallow the claim upto the extent Rs. 397100.00 without assigning any specific reasons and raising the demand of RS 118820.00 U/S 143(1). 2. Under the facts and circumstances CIT (Appeal) was not justified while restricting the claim Amounting To Rs 300000 ws 10(10AA) and rejecting the amounting to Rs. 397100.00 out of Rs 697100.00 which is earned leave enca....
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....g to Rs. 397100.00 meaning thereby that he is entitled for deduction of RS 10(10AA). 3. Under the facts and circumstances of the case CIT (Appeal) was not justified while confirming the order of AO treating the employer as non- government instead of government organization Our submission: it is to submit that although no reason has been mentioned 143(1) for in intimation send u/s disallowance of Rs 397100.00 out of Rs 697100.00 u/s 10(10AA) however it appears that bank has not been treated as govt employee and disallowance has been effected which is not a correct proposition as per principal of natural justice it becomes mandatory on the part of assessing officer to provide the opportunity of being heard however factually employer ....
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....o be justified. This is so because over the decades. the pay-scales admissible to government servants, and even employees of the Public Sector Undertaking and Nationalized Banks and all others have been upwardly revised, keeping In view, the financial growth in the country as well as on account of rising inflation. The last drawn salaries have increased manifold since time and notification issued under Clause (11) of Section 10(10AA) was lastly issued, as taken note of hereinabove, on 31.05.2002. We therefore, issue notice to the respondents limited to this aspect. 9. Issue notice, learned counsel for the respondents accepts notice. Respondents should file counter affidavits be filed within six weeks. Rejoinder thereto, if any, be ....