2026 (5) TMI 1199

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....cally in view of CBDT Notification in S.O. 2276(E) Notification No. 31/2023/F. No. 200/3/2023-ITA-I dated 24.05.2023 with RESTROSPECTIVE EFFECT. The restriction of leave encashment amount received at the time of retirement Rs. 1015928/- to Rs. 300000/- U/Sec. 10(10AA)(ii) of Act is not justified. 2. Any other matter with prior permission of the chair." 3. The brief facts of the case are that the assessee, Pankaj Bhupatrai Joshi is an individual. The assessee has filed his original return of income on 01.10.2020 declaring total income of Rs. 15,48,940/- by claiming Leave Encashment of Rs. 10,15,928/- as exempt u/s. 10(10AA). The Assessing Officer has passed intimation order under Section 143(1) on 19.10.2021 determining total inc....

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....vailable on record. Though the assessee is not a Central Government or State Government employee the CBDT Circular has whereas the leave encashment or the amount received as per leave salary after retirement or superannuation has to be looked into in the case of CBDT as well. The issue raised by the assessee in the present appeal stands covered by the order of the Tribunal in the case of Goverdhan D Bhambhani Vs. ITO for AY 2020-21 dated 28.07.2025. For the sake of ready reference, the operative portion of said order is reproduced as under: 3. The CBDT's Notification dated 24.05.2023 (No. 31/2023/F.No. 200/3/2023-ITA-1) (copy enclosed Page no. 1) clearly states that "S.O. 2276(E).-In exercise of the powers conferred by....

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....of decisions already granted by Jaipur Bench; details as below:- (1) Govind Chatwani, Appeal No. ITA No. 385/JP/2023 dated 31.10.2023 copy as enclosed (Page 2108) (2) Devendra kumar Gupta M.A. No. 49/JP/2023 dated 18.02.2025 copy as enclosed." 6. Ld. Sr. D.R. appearing for the Revenue supported the order passed by the lower authorities and requested to confirm the disallowance. 7. We have given our thoughtful consideration and perused the materials available on record. This issue of deduction u/s. 10(10AA)(ii) is no more res-integra based on the decisions passed by Co-ordinate Bench of this Tribunal in the case of Govind Chhatwani Vs. CIT(Appeals) in ITA No. 385/JP/2023 dated 31-10-2023 wherein it is held....

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...., 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. ....