Gopalakrishnan Sriram Vs ITO (ITAT Chennai)
Summary: The appeal concerned the exemption available under section 10(10AA)(ii) of the Income-tax Act, 1961, in respect of leave encashment received by a non-government employee on retirement. The assessee, Gopalakrishnan Sriram, had retired from Indian Bank during financial year 2019-20 and received Rs.12,27,232/- towards leave encashment. For AY 2020-21, he filed his return on 10.09.2020 declaring total income of Rs.24,36,260/- after claiming exemption of Rs.3,00,000/- under section 10(10AA)(ii). The return was processed by CPC, Bengaluru under section 143(1) on 13.12.2020.
Subsequently, the monetary ceiling for non-government employees was enhanced from Rs.3,00,000/- to Rs.25,00,000/- by Notification No.31/2023 dated 24.05.2023. The assessee therefore sought the benefit of the enhanced limit for the leave encashment received on retirement. Before the ld.CIT(A), the assessee contended, among other things, that the notification and its explanatory memorandum warranted retrospective application and relied upon decisions including Vijay Kumar Jain and Anil Kumar Khattri. The ld.CIT(A), however, held that Notification No.123/2002/F.No.200/23/98-ITA-I dated 31.05.2002 was applicable to AY 2020-21 and confirmed restriction of the exemption to Rs.3,00,000/-.
Before the Tribunal, the assessee submitted that Notification No.31/2023 enhanced the limit for non-government employees to Rs.25,00,000/- and that the measure was beneficial and curative. Reliance was placed on coordinate Bench decisions including Balasubramanian Venkatachalaperumal, Thummalapalli Dasarathy and Vattikundala Prsabhakara Rao. The Revenue opposed the claim on the ground that Notification No.31/2023 was effective from 01.04.2023 and therefore could not govern AY 2020-21.
