Renu Moongia Vs ITO (ITAT Jaipur)
Retired in 2020, Relief Under the ₹25 Lakh Limit: ITAT Allows Full Leave Encashment Exemption
Full Exemption Despite Retirement Before the Enhancement
The Jaipur Tribunal allowed exemption for the entire ₹9,04,669 received as leave encashment by a retired LIC employee, relying on coordinate Bench decisions applying the enhanced ₹25 lakh ceiling under CBDT Notification No. 31/2023.
The assessee had retired on 30 June 2020, whereas the notification relied upon was issued on 24 May 2023. Nevertheless, following the favourable Tribunal precedents discussed in its order, the Bench directed the Assessing Officer to allow her claim. It also condoned an unusually long 1,277-day delay in filing the appeal.
CPC Restricted the Claim to ₹3 Lakh
After serving the Life Insurance Corporation of India for more than 30 years, the assessee superannuated and received leave encashment of ₹9,04,669, along with other retirement benefits.
She claimed exemption for the entire amount in her return. However, while processing the return under Section 143(1), CPC allowed only ₹3 lakh under Section 10(10AA)(ii) and disallowed the balance of ₹6,04,669.
The first appellate authority upheld this restriction and dismissed her appeal. Before the Tribunal, the assessee challenged that decision with reference to the subsequent notification enhancing the exemption ceiling. The Tribunal permitted her revised ground to be taken on record.
