2026 (6) TMI 27

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....540/-. In the original return so filed, the assessee claimed exemption of Rs. 3,00,000/- u/s 10(10AA) out of leave encashment of Rs. 9,60,130/- and offered excess amount of Rs. 6,60,130/- as taxable income. (ii) Subsequently, the assessee filed a revised return of income declaring a total income of Rs. 7,74,410/- on 30.03.2021. In the revised return so filed, the assessee claimed full exemption of Rs. 9,60,130/- u/s 10(10AA) in respect of leave encashment. Thus, the assessee reduced the total income and claimed a refund in revised return. (iii) The Ld. AO processed assessee's revised return vide intimation dated 26.11.2021 u/s 143(1) but allowed exemption to the extent of Rs. 3,00,000/- only. This resulted in an addition of Rs. 6,60,130/- and computation of total income at Rs. 14,34,540/- by the Ld. AO. (iv) The assessee filed rectification-application u/s 154 to the Ld. AO whereupon the Ld. AO passed rectification-order dated 02.06.2022 keeping total income at Rs. 14,34,540/- as assessed in the intimation u/s 143(1). (v) Finding no success at Ld. AO level, the assessee carried matter in first-appeal before Ld. CIT(A) and made submissions. The Ld....

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....ssee and revenue is qua the amount of exemption in respect of leave encashment. 4. During hearing before us, the assessee appeared in person and made submissions. He made a straightforward submission that the lower authorities have treated him as a "non-govt. employee" and accordingly restricted exemption to the ceiling limit of Rs. 3,00,000/-. However, the ceiling limit had already been revised/increased to Rs. 25,00,000/- by CBDT through Notification No. 31/2023/F.No. 200/3/2023-ITA-I dated 24.05.2023. He submitted that revised/increased limit would apply to the previous year 2019-20/AY 2020-21 (under consideration). He submitted that this proposition is already accepted in several decisions of ITAT Benches including a very recent order dated 27.02.2026 of this very bench in Narendra Kumar Mishra Vs. ITO, ITA No. 233/Ind/2025; copy of order is filed from which the relevant portion is re-produced below: "12. We have considered rival submissions of both sides and considered the issue, facts and the judicial rulings cited before us. At first, we re-produce the relevant parts of certain decisions cited by Ld. AR: Govardhan Deepchand at S.No. 1: "7. We ha....

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....se (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 Suo motu 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. 6,97,100/- 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. 6,97,100/-. Based on these observations the ld. AO is directed to allow the claim of the assessee u/s. 10(10AA) of the act within the revised limit as prescribed. In terms of these observations the appeal of the assessee is allowed." On being consistent to the said finding, we held that the assessee is entitled to get the deduction as claim....

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....-21 Jaipur 13/03/2025 8) Mr. Suman Kumar Jha ITA No 1179/AHD/2024 Oil and Natural Gas Commission Ltd 2020-21 Ahmedabad 18/03/2025 9) Mr. Dinesh Kumar Mittal ITA No 1570/JPR/2024 Medical Department Rajasthan 2021-22 Jaipur 07/04/2025 10) Mr. Sham Sunder Sahani ITA No 129/DEL/2025 Canara Bank 2021-22 Delhi 21/04/2025 11) Mrs. Neelam Gupta ITANo081/DEL/2025 Bank of Baroda 2020-21 Delhi 21/04/2025 12) Mr. Sharad Shukla ITA No 108/AGR/2024   2020-21 Agra 22/04/2025 13) Mr. Vijay Kumar Jain ITA No 175/AGR/2022 State Bank of India 2019-20 Agra 18/06/2025 14) Mr. Anil Kumar Khatri ITA No 187/AGR/2022 State Bank of India 2020-21 Agra 18/06/2025 15) Mr. Goverdhan Bhambhani ITA No 289/AHD/2025 Punjab National Bank 2020-21 Ahmedabad 28/07/2025 16) Mrs. Sujata Gupta ITA No 915/JPR/2025 State Bank of Bikaner & Jaipur 2022-23 Jaipur 31/07/2025 17) Mr. Om Prakash Khandelwal ITA No 887/JPR/2025 Life Insurance Corporation of India 2022-23 Jaipur 06/08/2025   18) Mr. Ashok Arora ITA No 2942/DEL/2025....