Gyanendra Panwar Vs ADIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal and directed grant of full exemption on leave encashment under Section 10(10AA). The assessee, a retired employee of Bank of Baroda, received ₹9,26,904 as leave encashment. While processing the return under Section 143(1), CPC restricted the exemption to ₹3,00,000, applying the old monetary ceiling applicable to non-government employees. The Tribunal noted that Notification No. 31/2023 dated 24.05.2023 enhanced the exemption limit to ₹25,00,000 with effect from 01.04.2023 and clarified that no person would be adversely affected. Since the amount received was well within the revised ceiling, the Tribunal held that CPC erred in applying the obsolete limit. The delay in filing the appeal was condoned considering medical and personal circumstances. The Tribunal directed CPC/AO to grant full exemption, reiterating that beneficial and remedial amendments must be applied appropriately.
Facts: The assessee retired from Bank of Baroda, a public sector undertaking bank, and received leave encashment of ₹9,26,904 at the time of retirement. While processing the return under section 143(1), the CPC restricted the exemption under Section 10(10AA) to ₹3,00,000 on the ground that the employer was other than a Central or State Government. The assessee contended that in view of Notification No. 31/2023 enhancing the exemption limit to ₹25,00,000, the entire amount received was exempt.
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