Balasubramanian Venkatachalaperumal Vs DCIT (ITAT Chennai)
In Balasubramanian Venkatachalaperumal Vs DCIT, the Chennai ITAT considered whether a retired ONGC employee was entitled to exemption of the entire leave encashment amount of Rs.19,05,997/- under Section 10(10AA)(ii) of the Income Tax Act for Assessment Year 2020-21 by applying the enhanced exemption limit of Rs.25 lakh introduced through CBDT Notification No.31/2023 dated 24.05.2023.
The assessee had retired from ONGC during FY 2019-20 and received leave encashment of Rs.19,05,997/-. While filing the return of income, the assessee claimed exemption of the entire amount under Section 10(10AA)(ii). However, CPC Bengaluru, while processing the return under Section 143(1), restricted the exemption to Rs.3 lakh as per the earlier notification applicable to non-government employees and added the balance amount to taxable income. The CIT(A) upheld the action of CPC on the ground that PSU employees could not be equated with government employees and that no notification granting parity existed during the relevant assessment year.
Before the Tribunal, there was a delay of 1,165 days in filing the appeal. The assessee explained that the appeal was not filed earlier because, at the relevant time, no effective relief appeared available under the prevailing legal position. Subsequently, CBDT Notification No.31/2023 and various Tribunal decisions created a basis for seeking relief, leading to the delayed filing.
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