TaxTMI 
TaxTMI 
2026 (8) TMI 1636
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....s are that the assessee is an individual, retired from Indian Bank, during the financial year 2019-20. Upon superannuation, the assessee received leave encashment of Rs. 12,27,232/- in the A.Y. 2020-21. The assessee filed his return of income ON 10.09.2020 by declaring a total income of Rs. 24,36,260/- after claiming exemption of Rs. 3,00,000/- out of the amount of leave encashment of Rs. 12,27,232/- u/s. 10(10AA)(ii) of the Act. The return of income was processed by the CPC, Bengaluru, u/s. 143(1) of the Act dated 13.12.2020. Subsequently, based on the exemption limit for leave encashment was enhanced from Rs. 3.00 Lakhs to Rs. 25.00 Lakhs with retrospective effect vide Finance Act, 2023 vide notification No.31/2023 dated 24.05.2023 thereby the assessee wanted to claim for higher exemption as against the original claim of Rs. 3.00 lakhs. 4. Aggrieved by the order of the CPC, Bengaluru, the assessee preferred an appeal before the ld.CIT(A) on 07.01.2026. 5. Before the ld.CIT(A), the assessee submitted that in the absence of subsequent notification issued by the Central Government having regard to the wordings of Notification No.123/2022 (F.No.200/23/98-ITA-I) the PSU employee....
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....ficial and curative in nature and the explanatory memorandum thereto expressly clarifies that no person is adversely affected, thereby warranting its application to the assessee case also. 8. In support of the above claim the ld.AR relied on the following Tribunal decisions: - Balasubramanian Venkatachalaperumal v. DCIT (Chennai Tribunal) - ITA 96/Chny/2026 dated 04.05.2026 for the A.Y. 2020-21 - Thummalapalli Dasarathy v. ITO (Chennai Tribunal) - ITA 2175/Chny/2026 dated 06.07.2026 for A.Y. 2021-22 - Vattikundala Prsabhakara Rao v.ITO (Chennai Tribunal) - ITA 3852/Chny/2025 dated 12.06.2026 for the A.Y.2020-21 9. In view of the above arguments the ld.AR prayed for setting aside the order of the ld.CIT(A) by allowing the claim of the exemption claimed by the assessee u/s. 10(10AA)(ii) of the Act to the tune of Rs. 12,27,232/- 10. Per contra, the ld.DR submitted that the assessee's claim for the A.Y.2020-21 cannot be considered as the notification for enhancement of deduction u/s. 10(10AA)(ii) of the Act from Rs. 3.00 lakhs to Rs. 25.00 Lakhs for non-governmental employees has been increased only from 01.04.2023 and hence there is no error in the ....
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....sion after nearly two decades and is clearly aimed at aligning the benefit available to non-government employees with that available to government employees, thereby removing an evident disparity. 15. In our considered view, the said enhancement is not in the nature of introducing a new exemption but is a measure to rationalize and update an existing provision to reflect present economic realities. The object of the amendment, as discernible from the notification and surrounding circumstances, is to mitigate hardship and ensure parity. It is a settled principle that provisions which are beneficial in nature and intended to remove hardship are to be construed liberally and, in appropriate cases, applied retrospectively, particularly where no vested right of the Revenue is adversely affected. 16. We further note that the explanatory intent behind such enhancement makes it clear that the amendment is remedial in nature. The absence of an express retrospective clause, in such circumstances, cannot be determinative, especially when the amendment merely enlarges the scope of an existing benefit. The Hon'ble Courts have consistently held that beneficial and curative amendments deser....
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....decisions of the ITAT, in as much as 22 cases, holding that the limit of exemption of leave encashment as per Section 10(10AA) of the Act applicable for the impugned year would be Rs. 25 lacs. The Ld. Counsel for the assessee submitted the list of the said decisions vide submission dated 25-11-2025 as under:- Latest decisions - Balasubramanian Venkatachalaperumal v. DCIT (Chennai Tribunal) - ITA 96/Chny/2026 dated 04.05.2026 for the A.Y. 2020-21 - Vattikundala Prsabhakara Rao v. ITO (Chennai Tribunal) - ITA 3852/Chny/2025 dated 12.06.2026 for the A.Y.2020-21 - Anil Kumar Shukla v. CIT(A)/CPC (Indore Tribunal) - ITA 76/Ind/2026 dated 24.04.2026 for the A.Y.2020-21 Earlier Coordinate Bench decisions: Sr No. Name of the Appellant and ITA No. Name of the Employer Asst. Year ITAT Bench Date of order 1. Mr. Ram Charan Gupta ITA No.408/JPR/2022 Bank employee 2020-21 Jaipur 27.06.2023 2. Mr. Satish Kumar Thakur ITA No.211/CHD/2023 Electricity Board Himachal Pradesh 2018-19 Chandigarh 12.09.2023 3. Mr. Mangala Ram Nimbark ITA No.542/JPR/2023 BSNL 2018-19 Jaipur 04.10.2023 ....
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....owing Grounds of Appeal: 1. That assessee retired from service of Punjab National Bank during the year and received leave encashment of Rs. 765404/-claimed exemption of such leave encashment amount of Rs. 765404 u/sec. 10 (10AA) of Income Tax Act, 1961. Thus the Ld CIT(A) has wrongly disallowed the same. 2. That in view of CBDT notification number 31/2023 dated 24/05/2023 even non-government employees are entitled u/sec. 10(10AA)(ii) of Income Tax Act, 1961 exemption upto Rs. 25.00 Lakhs maximum (Retrospectively). 3. Any other matter with prior permission of the chair. 5. None appeared on behalf of the assessee whereas the assessee filed written submission as follows: (1) Assessee retired from services of M/s Punjab National Bank in F.Y. 2019-20. (2) Received Rs. 7,65,404/- as "Leave Encashment" benefit in terms of sec 10(10AA) of Act. (3) Return of Income was filed on 25.12.20 claiming whole of such amount of Leave Encashment of Rs. 7,65,404/-u/sec. 10(10AA) of Act. (4) While processing the return u/sec. 143(1)(a) of Act dated 08.12.2021 the amount of such leave encashment of Rs. 7,65,404/-was restricted to Rs....
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.... is less; to claim u/sec. 10 (10AA) of Act. It is requested to kindly consider & grant relief. Under similar circumstances number 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 This issue of deduction u/s. materials available on record. 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 as follows: "7. We have heard the rival contentions and perused the material placed on record. The bench noted that the apple of discord in this case that the assessee has received a sum of Rs. 17,68,479/- as leave encashment which was claimed in the return of income filed as exempt u/s 10(10AA) of....