Case Law Details
Sujata Gupta Vs ITO (ITAT Jaipur)
The appeal before the Income Tax Appellate Tribunal (ITAT), Jaipur, arose from an order dated 17 January 2024 passed by the CIT(A), which had dismissed the assessee’s appeal against an order issued under Section 143(1) of the Income Tax Act on 2 February 2023. The assessee, a retired employee of State Bank of Bikaner & Jaipur (SBBJ), challenged the denial of exemption on leave encashment received upon superannuation.
Before considering the merits, the Tribunal dealt with a substantial delay in filing the appeal. The appeal was presented on 13 June 2025, well beyond the prescribed limitation period. The assessee sought condonation of delay, stating through an affidavit that, being a 62-year-old retired woman, she had consulted several tax professionals before deciding to file the appeal. The Tribunal noted that the affidavit remained unchallenged and accepted the explanation. Consequently, the delay in filing the appeal was condoned.
On merits, the assessee submitted that she had received ₹14,24,413 as leave encashment on retirement and was entitled to exemption under Section 10(10AA) of the Act. Reliance was placed on CBDT Notification No. 31/2023 dated 24 May 2023, which increased the exemption limit for non-government employees to ₹25 lakh. It was argued that the notification was beneficial in nature and should be applied retrospectively, and that the CIT(A) had erred in not extending the benefit while upholding the assessment order.
During the hearing, the Departmental Representative did not dispute the issuance of Notification No. 31/2023 or the enhancement of the leave encashment exemption limit to ₹25 lakh.
The Tribunal observed that the notification dated 24 May 2023 constituted beneficial instructions for non-government employees. In light of the notification, the Tribunal held that both the assessment order and the appellate order could not be sustained. Accordingly, the orders were set aside, the appeal was allowed, and the Assessing Officer was directed to give effect to the Tribunal’s decision.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
Appellant-assessee, who claims to have got superannuated from M/s State Bank of Bikaner & Jaipur (SBBJ) , has challenged order dated 17.01.2024, passed by Learned CIT(A), whereby her appeal filed there, while challenging order dated 02.02.2023, passed u/s 143(1) of the Income Tax Act (hereinafter referred to as “the Act”), has been dismissed.
2. The impugned order is dated 17.01.2024. Present appeal came to be presented on 13.06.2025 i.e. much beyond prescribed period of limitation.
Along with the appeal, the assessee-appellant filed an application seeking condonation of delay in filing of the appeal.
Accordingly, Ld. AR for the appellant-applicant has firstly advanced arguments on the point of condonation of delay.
The only contention raised by ld. AR for the applicant is that the assessee is an old lady of 62 years, who could not present the appeal within the prescribed period of limitation, as she contacted many tax consultants before making up her mind to go for appeal challenging the impugned order. Accordingly, Ld. AR for the applicant-appellant has urged that the delay in filing of the appeal may be condoned.
3. Alongwith the application, the applicant-appellant submitted to her affidavit. Since that was an unattested affidavit, duly affidavit of the applicant has been subsequently presented.
4. As noticed above, the applicant-appellant was in the services of the Bank and the matter pertains to retrial benefit i.e. leave encashment, received by her, on her superannuation. When the applicant-appellant states on oath that she contacted many legal experts, which led to delay in filing of the appeal, we deem it a fit case to believe her deposition on affidavit, particularly, when said deposition goes unchallenged. Consequently, delay in filing of the appeal is hereby condoned.
5. The only submission put forth by Ld. AR for the appellant is that an amount of Rs. 14,24,413/- was received by the appellant by way of leave encashment benefit in terms of section 10(10)AA of the Act, and that notification dated 24.05.2023 was issued by CBDT whereby the benefit was extended to non government employees by raising the limit to Rs. 25 lakhs and that too with retrospective effect. Therefore, Ld. AR has contended that by not applying the said notification dated 24.05.2023 with retrospective effect, Learned CIT(A) has erred in confirming the assessment order, and argued that the appeal deserves to be allowed.
6. In the course of arguments, Ld. DR for the department has not disputed issuance of notification no. 31/2023/F.No.200/2023-ITA-I dated 24.05.2023 and that the above said limit as regards leave encashment was raised to Rs. 25 lakhs.
7. In view of the notification dated 24.05.2023, which is a piece of evidence in the form of beneficial instructions meant for non government employees, the assessment order and the impugned order, passed by Learned CIT(A) deserve to be set aside.
Result
8. As a result, this appeal is allowed. Assessing Officer to give effect to this decision.
File be consigned to the record room after the needful is done by the office.
Order pronounced in the open court on 31/07/2025.
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