Himanshu Natvarlal Mehta, Navsari V. Income Tax Officer, Ward-2, Navsari

ITA 330/SRT/2022

AI Insights

The case involves Himanshu Natvarlal Mehta, a retired employee of Bank of Baroda, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals), which confirmed the addition of Rs. 4,76,980 to his income. This amount was initially claimed as an exemption under Section 10(10AA) of the Income Tax Act, 1961, for leave encashment upon retirement, which was partially disallowed by the lower tax authorities. The assessee argued that the issue was debatable and referenced a pending writ petition in the Delhi High Court that could influence the outcome. The Tribunal decided to restore the matter to the Assessing Officer, pending the decision of the Delhi High Court on the similar legal question.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301576 (ITAT-SURAT)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-04-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 14-11-2022
• Other Referred Cases: Kamal Kishore Kalia & Ors. Vs Union of India & Ors. W.P.(C) 11846/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Revised return
• Section: 10(10AA)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 330/Srt/2022 (Assessment Year 2019-20) (Physical hearing) Himanshu Natvarlal Mehta, 44, Chhapra Road, Shakti Nagar, Navsari-396445. PAN No. AAQPM 4972 K Vs. I.T.O., Ward-2, Navsari. Appellant/ assessee Respondent/ revenue Assessee represented by Shri Suresh K. Kabra, AR Department represented by Shri Vinod Kumar, Sr. DR Date of hearing 19/04/2023 Date of pronouncement 19/04/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 29/09/2022 for the Assessment Year (AY) 2019-20. The assessee has raised following grounds of appeal: “1. The ld. CIT(A) erred in passing the order without giving reasonable opportunity to the appellant. 2. On the facts/the circumstances of the case and law, the ld. CIT(A) erred in confirming the addition of Rs. 4,76,980/- of Section 10(10AA) for encashment of leave being the debatable issue due to the admission of writ petition in Delhi High Court in case of Kamal Kumar Kalia & Ors. Vs Union of India & Ors. W.P.(C) 11846/2019. 3. The ld. CIT(A) has not made any direction in his order regarding acceptance/rejection of form No. 8 filed by me being the matter pending and the facts are similar to the case stated in point no. 2 above. ITA No. 330/Srt/2022 Himanshu Natvarlal Mehta Vs ITO 2 4. The appellant craves leave to amend, alter or delete any of the above grounds of appeals.” 2. Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that the assessee is a retired employee of Bank of Baroda which is a public sector undertaking of Government of India. The assessee is its computation of income claim exemption under Section 10(10AA) of the Income Tax Act, 1961 (in short, the Act) of Rs. 7,76,984/- on account of leave encashment on his superannuation/ retirement. The lower authorities restricted the claim of exemption under section 10(10AA) to the extent of Rs. 3.00 lacs, thereby disallowed Rs. 4,76,984/-, and added to the income of assessee. The ld. AR of the assessee submits that in a recently the Hon'ble Finance Minster while presenting Budget for financial year 2023-14, in the Parliament has declared that limit of Rs. 3.00 lacs for tax exemption on leave encashment on retirement of non-government salaried employee was last fixed in the year 2002, when the highest basis paid in the government was Rs. 33,000/- per month. In line with the increase in government employees’ salary, the Hon'ble Finance Minster proposed to increase this limit to Rs. 25.00 lacs. However, till now, no such notification is issued either by the Government of India or by the Central Board of Direct Taxes. ITA No. 330/Srt/2022 Himanshu Natvarlal Mehta Vs ITO 3 3. The ld. AR of the assessee further submits that the Hon'ble Delhi High Court in case of Kamal Kishore Kalia & Ors. Vs Union of India & Ors. in Writ Petition (Civil) No. 11846/2019 has admitted a similar question of law which is directly and substantially involved in the grounds of appeal raised by the assessee. The Hon'ble Delhi High Court vide order dated 05/04/2020 has admitted such question of law and directed the Government of India/Union of India to file their reply on such question. The ld. AR of the assesse submits that his appeal may be restored to the file of Assessing Officer with the direction to follow the mandate of decision of Hon'ble Delhi High Court in Kamal Kishore Kaila & Ors. Vs Union of India & Ors. (supra) as and when order is passed in the said Writ Petition. The assessee has already filed undertaking in the Form No.8 declaration under Section 158A of the Act, undertaking that he will be abide by the final decision on question of law referred by the Hon'ble Delhi High Court. 4. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that for seeking relief under Section 158A of the Act, there will be parity in the question of law and facts and the facts in case of assessee may be at variance. The ld. Sr. DR for the revenue on merit, supported the order of ld. CIT(A). 5. I have considered the submissions of both the parties and find that the assessee in the revised return of income, the assessee claimed deduction ITA No. 330/Srt/2022 Himanshu Natvarlal Mehta Vs ITO 4 under Section 10(10AA) of the Act of Rs. 7,76,984/- on account of leave encashment on his superannuation from Bank of Baroda. The lower authorities restricted the claim to the extent of RS. 3.00 lacs as prescribed limit of exemption under Section 10(10AA) of the Act. Now before me, the ld. AR of the assessee filed his undertaking in Form No. 8 and submitted that similar issue, the Hon'ble Delhi High Court has already admitted a question of law and he will abide by the outcome of such decision in Kamal Kishore Kalia & Ors. Vs Union of India & Ors. (supra). Considering the submission of ld. AR of the assessee, I find merit in the limited submission of the ld. AR of the assessee, therefore, the issue/grounds of appeal raised by the assessee is restored back to the file of Assessing Officer to grant give effect of this order as per the order of Delhi High Court in Kamal Kishore Kalia & Ors Vs Union of India & Ors. (supra) and allow relief to the assessee. With this limited direction, the grounds of appeal raised by assessee is allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purpose. Order announced in open court on 19 th April 2023 at the time of hearing. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 19/04/2023 *Ranjan ITA No. 330/Srt/2022 Himanshu Natvarlal Mehta Vs ITO 5 Copy to: 1. Assessee 2. Revenue / assessing officer 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat