Satish Chandra Tyagi Vs CIT (Appeals) (ITAT Delhi)
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals), dated 28.08.2024, arising from a rectification order under section 154 of the Income Tax Act, 1961 for Assessment Year 2019–20. The core issue in dispute was the denial of deduction under section 10(10AA) in respect of leave encashment and its restriction to the earlier exemption limit of ₹3,00,000.
The assessee contended that the Central Board of Direct Taxes (CBDT), through Notification No. 31/2023 issued by the Ministry of Finance, had revised the exemption limit for leave encashment under section 10(10AA) to ₹25,00,000. Since the amount of leave encashment claimed by the assessee was ₹8,37,542, which was below the revised threshold, the assessee argued that the full amount should be allowed as exempt. The assessee challenged the order of the CIT(A), which had upheld the disallowance made by the Central Processing Centre (CPC) restricting the exemption to ₹3,00,000.
During the proceedings, the assessee, appearing in person, submitted written arguments supporting the claim for full exemption based on the revised CBDT notification. The Departmental Representative relied on the orders of the lower authorities.
The Tribunal examined the matter in light of existing judicial precedents from various benches, including Chandigarh, Pune, Jaipur, and Delhi. It noted that similar issues had been adjudicated in earlier cases, particularly in the case of Neelam Gupta (ITA No. 81/Del/2025), where the Tribunal had allowed the exemption under section 10(10AA) in light of the revised CBDT notification.
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