Mangla Ram Nimbark Vs ITO (ITAT Jaipur)
The appeal before the Income Tax Appellate Tribunal (ITAT), Jaipur, concerned the assessee’s claim for exemption of leave encashment amounting to ₹6,87,030 under Section 10(10AA)(i) of the Income Tax Act for Assessment Year 2018-19. The assessee challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), which had upheld the disallowance of ₹3,87,030 from the claimed exemption.
The assessee contended that he was originally an employee of the Department of Telecommunications (DOT), a Central Government organization, and was subsequently absorbed into Bharat Sanchar Nigam Limited (BSNL) with effect from 1 October 2000 pursuant to a Government notification. Upon retirement from BSNL on attaining superannuation, the assessee received leave encashment of ₹6,87,030, comprising ₹4,25,959 relating to service rendered with DOT and ₹2,61,071 relating to service rendered with BSNL. The entire amount was claimed as exempt under Section 10(10AA)(i) in the return of income. An application under Section 154 was filed before the Assessing Officer after the claim was not accepted while processing the return, but the claim was rejected.
The assessee thereafter appealed before the CIT(A). The CIT(A) upheld the action of the Assessing Officer and confirmed the addition of ₹3,87,040 made through the order passed under Section 154, holding that there was no merit in the appeal. Consequently, the exemption claim to that extent remained disallowed.
