ABHAY HIRALAL GANDHI,AHMEDABAD V. THE ITO, WARD-6(1)(1), AHMEDABAD

ITA 1955/AHD/2024

AI Insights

The case involves Abhay Hiralal Gandhi, a retired employee of the State Bank of India, who appealed against the rectification order passed by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeals). The dispute centered on the exemption claimed under section 10(10AA) of the Income Tax Act, 1961, for leave encashment upon retirement. Initially, the assessee claimed an exemption of Rs. 8,90,808, which was partially allowed, leading to a tax demand. The CIT(A) upheld the partial disallowance, stating that the assessee, being a retired employee of a public sector undertaking, did not qualify for full exemption as a government employee. Subsequently, a further rectification allowed the exemption as originally claimed, nullifying the demand and resulting in a minor refund. The tribunal dismissed the appeal as withdrawn following these developments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47098 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MAMTA SINGH
• Keywords: Rectification of order
• Section: 250; 154; 143(1); 10(10AA)

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद Ɋायपीठ “SMC“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD सुŵी सुिचũा काɾले, Ɋाियक सद˟ एवं ŵी मकरंद वसंत महादेवकर, लेखा सद˟ क े समƗ। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No. 1955/Ahd/2024 िनधाŊरण वषŊ /Assessment Year : 2019-20 Abhay Hiralal Gandhi I/5, Bhalchandra Flats, Nr. Vasna Bus Stand, Vasna, Ahmedabad, Gujarat - 380007 बनाम/ v/s. Income Tax Officer Ward- 6(1)(1), Ahmedabad ̾थायी लेखा सं./PAN: ACUPG7952R अपीलाथŎ/ (Appellant) Ů̝ यथŎ/ (Respondent) Assessee by : Ms. Kaushani Shah, AR on behalf of Shri Hardik Vora, AR Revenue by : Smt. Mamta Singh, Sr.DR सुनवाई की तारीख/Date of Hearing : 09/04/2025 घोषणा की तारीख /Date of Pronouncement: 11/04/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: This appeal is filed by the assessee against the order passed by the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”], dated 14.11.2024 for the Assessment Year 2019-20, confirming the rectification order passed by the Assessing Officer u/s 154 of the Act on 29.10.2021. ITA No.1955/Ahd/2024 Abhay Hiralal Gandhi vs. ITO A.Y. 2019-20 2 2. The brief facts of the case are that the assessee is an individual employed with the State Bank of India and retired during the year under consideration. In the return of income filed for the Assessment Year 2019-20 on 10.07.2019, the assessee had declared a total income of Rs. 10,99,280/- and claimed exemption of Rs. 8,90,808/- u/s 10(10AA) of the Act on account of leave encashment on retirement. The return was processed u/s 143(1) on 23.11.2019 accepting all the deductions and exemptions claimed. 3. Subsequently, the CPC, Bengaluru, passed a rectification order u/s 154 dated 29.10.2021 allowing exemption to the extent of Rs. 3,00,000/- only and disallowed the balance claim of Rs. 5,90,808/-, resulting in a demand of Rs. 1,88,580/-. Aggrieved by the said rectification order, the assessee preferred an appeal before the CIT(A). The learned CIT(A), vide order dated 14.11.2024, upheld the disallowance, holding that the assessee, being a retired employee of a public sector undertaking (SBI), could not be treated as a government employee for the purpose of claiming full exemption u/s 10(10AA) of the Act. The CIT(A) further observed that the claim of the assessee was prima facie not acceptable and hence no infirmity was found in the action of the Assessing Officer in disallowing the exemption under the rectification proceedings. 4. Aggrieved by the order o CIT(A) the assessee filed an appeal before us. 5. During the course of proceedings before us, the learned Authorised Representative (AR) filed a written application dated 08.04.2025 seeking withdrawal of the appeal, stating that subsequent to the impugned orders, the assessee had filed another rectification application u/s 154 on 12.10.2022. Pursuant to the said application, the Assessing Officer passed a rectification ITA No.1955/Ahd/2024 Abhay Hiralal Gandhi vs. ITO A.Y. 2019-20 3 order dated 25.10.2022 accepting the returned income as originally filed. Consequently, the demand was nullified and a refund of Rs. 1,010/- was determined. It was further submitted that while processing the refund, the earlier payment of Rs. 1,88,580/- made by the assessee on 18.11.2021 was not taken into account and a letter has already been submitted to the Assessing Officer seeking issuance of the due refund. 6. Considering the subsequent development and submissions made by the learned AR, the appeal is dismissed as withdrawn. However, the assessee is granted liberty to restore the appeal in accordance with law, in case any difficulty arises in the matter of refund or any other connected issue. 7. In the result, the appeal is dismissed as withdrawn, with liberty as per Para 6 hereinabove. Order pronounced in the Open Court on 11th April, 2025 at Ahmedabad. Sd/- Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 11/04/2025 S. K. Sinha, Sr. PS True Copy आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(A)/Pr.CIT-1, Vadodara 5. िवभागीय Ůितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad "