Prakash Dhondiram Gavali Vs ITO (ITAT Pune)
Summary: The appeal was filed by Prakash Dhondiram Gavali against the order dated 16.01.2026 passed by the Ld. Addl./JCIT(A)-2, Gurugram for Assessment Year 2021-22. The dispute concerned the exemption claimed under Section 10(10AA) of the Income Tax Act, 1961 in respect of leave encashment received on retirement and the validity of the rectification under Section 154.
The assessee had joined the Department of Telecommunication, Central Government of India, on 06.04.1984. Subsequently, when Bharat Sanchar Nigam Limited (BSNL), a public sector undertaking, came into existence, he was transferred and absorbed in BSNL on 01.10.2000. He retired from BSNL on 31.05.2020. At retirement, he received total leave encashment of Rs.6,48,620/-. The employer specifically bifurcated the amount into Rs.4,15,117/- relating to the period during which the assessee served as a Central Government employee in the Department of Telecommunication and Rs.2,33,503/- relating to the period of service in BSNL as an employee of a public sector undertaking.
The assessee claimed exemption under Section 10(10AA) for the leave encashment. However, the CPC, by order dated 22.03.2022, restricted the exemption to Rs.3,00,000/-. The assessee thereafter filed a rectification application under Section 154 on 12.08.2025. The CPC rejected the rectification application by order dated 20.08.2025 and retained the earlier position.
