TaxTMI 
TaxTMI 
2026 (5) TMI 946
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....ied by the CPC and on appeal dismissed by the ld.CIT(A). Based on the statutory provisions and judicial position prevailing at the relevant time, that no effective relief was available on the issue involved, impugned order was not questioned in the statutory time limit fixed. Now, based on the Notification NO.31/2023 dated 24.05.2023 of the CBDT and subsequent decisions of the Tribunal, the assessee filed the present appeal with a delay in filing the appeal and prayed for condoning the same. 3. Per contra the ld.DR submitted that there is no sufficient cause to condone the huge delay in filing the appeal before the Tribunal and hence opposed to admit the appeal of the assessee. 4. We have heard the rival submission on the issue of condonation of delay. Firstly, it is a settled principle of law that the expression "sufficient cause" occurring in section 249(3) of the Act should receive a liberal and justice-oriented interpretation. The Hon'ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (167 ITR 471) has emphatically held that a liberal approach must be adopted while considering applications for condonation of delay and that substantial justice should prevail o....
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....rounding circumstances, cannot be said to be either mala fide or lacking in bona fides. On the contrary, it constitutes sufficient cause warranting condonation. 11. Respectfully following the ratio laid down by the Hon'ble Supreme Court and the Hon'ble Jurisdictional High Court, as referred to above, we hold that the delay of 1165 in filing the present deserves to be condoned as the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law and the appeal is admitted for adjudication on merits. 12. The only issue raised by the assessee on his grounds of appeal is whether the assessee is eligible for exemption u/s. 10(10AA)(ii) of the Act, upto Rs. 25.00 lakhs in par with the government employees, instead of Rs. 3.00 lakhs for the impugned A.Y.2020-21. 13. Brief facts of the case emanating from the records are that the assessee is an individual, retired from M/s.ONGC, during the financial year 2019-20. Upon superannuation, the assessee received leave encashment of Rs. 19,05,997/- in the A.Y. 2020-21. The assessee filed his return of income declaring a total income of Rs. 31,62,309/- after claiming....
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....emption to the extent of Rs. 16,05,997/-. Thus, the addition/adjustment made by the AO to the extent of Rs. 16,05,997/- is confirmed and the grounds of appeal raised by the assessee on this issue are dismissed." 16. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us. 17. The ld.AR for the assessee assailing the action of the ld.CIT(A) submitted that the denial exemption u/s. 10(10AA)(ii) of the Act in respect of leave encashment received on retirement is unsustainable in law in view of subsequent statutory and judicial pronouncements having a direct and decisive bearing on the issue. The ld.AR submitted that the notification issued by the CBDT vide No.31/2023 dated 24.05.2023, enhancing the leave encashment on retirement for non-government employees also from Rs. 3.00 Lakhs to Rs. 25.00 Lakhs, is squarely applicable to the assessee's case and hence the action of the ld.CIT(A) needs to be reversed in the interest of justice. Further, the ld.AR submitted that though the notification is effective from 01.04.2023, it is beneficial and curative in nature and the explanatory memorandum thereto expressly clarifies that no person is adversely affected....
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....he Act. However, the CPC, while processing the return u/s. 143(1) of the Act, restricted the exemption to Rs. 3,00,000/- in accordance with the then prevailing notification, and brought the balance amount to tax. The said action has been confirmed by the ld.CIT(A). 23. The contention of the ld.AR is that the subsequent enhancement of the exemption limit to Rs. 25,00,000/- vide CBDT Notification No.31/2023 dated 24.05.2023, being beneficial in nature, ought to be applied retrospectively, particularly in view of the legislative intent to remove disparity between government and non-government employees. It has further been argued that such amendment is curative and intended to mitigate hardship, and therefore deserves to be applied to pending matters. Reliance has also been placed on certain decisions of coordinate benches of the Tribunal wherein a liberal interpretation has been adopted in favour of the assessee. 24. Upon careful consideration of the statutory framework, we find that Section 10(10AA)(ii) provides exemption to non-government employees in respect of leave encashment, subject to a monetary ceiling as notified by the Central Government. The enhancement of such ceil....
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....ve Encashment Fully Exempted 1. Any payment received by an employee of the Central Govt. OR a State Govt. as the cash equivalent of the leave salary in respect of the period of Earned Leave at his credit at the time of his retirement (whether) on superannuation OR otherwise. 12 ITA No. 1280/JPR/2025 Ram Dev Daiya 2. Any such payment (as given in para (i) above) received by an employee ot her than employee Central OR State Govt in respect of so much of period of EL as does not exceed 10 months calculated on the basis of the average salary drawn by the employee during the period of 10 months immediately preceding his retirement. (Section 10(10AA) of the I-T Act, 1961." 22. As noted above, the issue related to denial of exemption under Section 10(10AA) amounting to Rs. 13,12,806/-. The assessee is a salaried individual who had returned leave encashment salary received on retirement amounting to Rs. 13,12,806/- and claimed exemption of the same u/s 10(10AA) of the Act. The same was however restricted to Rs. 3 lacs while processing the return of income of the assessee by the CPC in terms of the provisions of Section 10(10AA) of the Act. 23. I have noted above the conte....
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.... 06.08.2025 18. Mr.Ashok Arora ITA No.2942/DEL/25 Punjab & Sind Bank 2021-22 Delhi 28.08.2025 19. Mr.Chandra Prakash Vashishtha ITANo.1139/JPR/25 State Bank of India 2021-22 Jaipur 07.10.2025 20. Mr.Rajiv Kumar Wadhwa ITA No.5897/DEL/25 Canara Bank 2020-21 Delhi 29.10.2025 21 Mr.Vijay Pal Gupta ITA No.5915/DEL/25 Canara Bank 2021-22 Delhi 29.10.2025 22. Mr.Sudhakar G.Paldewar ITA No.1781/PUN/25 State Bank of India 2020-21 Pune 31.10.2025 24. Ld. DR fairly agreed that the issue was covered in favour of the assessee as pointed out by the Ld. Counsel before me. He was unable to bring to my notice any contrary decision of the ITAT in this regard, nor was he able to bring to my notice any decision of a higher judicial authority holding to the contrary. In 14 ITA No. 1280/JPR/2025 Ram Dev Daiya view of the above I hold that the disallowance of exemption claimed by the assessee of leave encashment received under Section 10(10AA) of the Act amounting to Rs. 13,12,806/- be deleted. 29. Similarly in the case of Govardhan Deepchand Bhambhani v.ITO (Ahmedabad Tribunal) - ITA 289/Ahd/2025 da....
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....-cıause (ii) of clause (1044) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government, having regard to the maximum amount receivable by its employees as cash equivalent of leave salary in respect of the period of earned leave at their credit at the time of their retirement, whether superannuation or otherwise, hereby specifies the amount of Rs. 25,00,000 (twenty-five lakhs rupees only) as the limit in relation to employees mentioned in that sub-clause who retire, whether on superannuation or otherwise. 2. This notification shall be deemed to have come into force with effect from the 1st day of April, 2023. [Notification No. 31/2023/F. No. 200/3/2023-ITA-I] SOURABH JAIN, Under Secy. Explanatory Memorandum: It is hereby certified that no person is being adversely affected by giving retrospective effect to this notification." 4. Thus in view of such notification section 10(10AA) sub section (i) & (ii) both are at par & since it is clear that as per explanatory memorandum that no person is being adversely affected by giving retrospective effect to this notification. Thus sec 10(10AA) (i) & (ii) both are ....
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....ia & Ors. Vs. Union of India & Ors in WP(C) 11846/2019 dated 08.11.2019 wherein the court has given following directions :- "8. We are however of the, prima facie, view that the grievances of the petitioner with regard to exemption limit under Clause (ii) of Section 10 (10AA) not being raised since 1998, appears to 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 Nationalised 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 (ii) 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 filed before the next date. "8.1 Recently the Central Board of Direct Taxes Suomotu revised the limit for deduction u....