Dashrath Kumar Sen Vs ACIT (ITAT Jaipur)
The appeal before the Income Tax Appellate Tribunal (ITAT), Jaipur, arose from an order of the National Faceless Appeal Centre (NFAC) dated 12 August 2024 relating to Assessment Year 2020-21. The dispute concerned the assessee’s claim for exemption of leave encashment amounting to ₹9,60,409 under Section 10(10AA) of the Income Tax Act. The assessee, a retired employee of Bharat Sanchar Nigam Limited (BSNL), had claimed exemption of the entire leave encashment amount in a revised return. However, during scrutiny assessment under Section 143(3) read with Section 144B, the Assessing Officer restricted the exemption to ₹3,00,000 and added the balance amount of ₹6,60,409 to the assessee’s income.
The assessee had initially filed an original return declaring total income of ₹17,78,210 after claiming various deductions and exemptions. Subsequently, a revised return was filed declaring total income of ₹11,17,810 and claiming a higher exemption, including the leave encashment amount of ₹9,60,409. The case was selected for complete scrutiny due to reduction of income in the revised return and the claim of refund. After examining the original and revised returns, the Assessing Officer concluded that the assessee, being a BSNL employee, was entitled only to the exemption limit applicable to employees of public sector undertakings, namely ₹3,00,000 under Section 10(10AA)(ii), and disallowed the excess claim.
