Narendra Kumar Mishra Vs ITO (ITAT Indore)
The appeal concerned the assessment for AY 2020–21 arising from an assessment order passed under Sections 143(3) read with 144B of the Income-tax Act. The assessee, a differently-abled individual and a former employee of the Department of Telecommunications who was later absorbed into Bharat Sanchar Nigam Limited (BSNL), had retired during the relevant year and received ₹12,85,132 as leave encashment and ₹15,54,304 as ex-gratia under the Voluntary Retirement Scheme (VRS)-2019. In the original return filed under Section 139(1), the assessee declared total income of ₹26,01,978 and claimed exemption of ₹7,75,890 under Section 10(10AA) for leave encashment and ₹5,00,000 under Section 10(10C) for VRS compensation. Subsequently, in a revised return filed under Section 139(4), the assessee claimed full exemption of ₹12,85,132 under Section 10(10AA) for leave encashment while retaining the ₹5,00,000 exemption for VRS compensation.
During scrutiny proceedings, the Assessing Officer rejected the claim of full exemption on leave encashment and held that since the assessee had ceased to be a Central Government employee upon absorption into BSNL, the exemption limit applicable was ₹3,00,000 under Section 10(10AA)(ii). Accordingly, the AO allowed exemption only up to ₹3,00,000 and made an addition of ₹9,85,132. The first appellate authority upheld the addition, leading the assessee to file an appeal before the Tribunal. The appeal itself was filed with a delay of 547 days, which the assessee explained by citing medical difficulties, disability, and family health issues. The Tribunal found that the delay was caused by circumstances beyond the assessee’s control and constituted “sufficient cause” under Section 253(5). Referring to the principle laid down by the Supreme Court that substantial justice should prevail over technical considerations, the Tribunal condoned the delay and admitted the appeal.
