Pradipkumar Bhogilal Modi, Ahmedabad V. The ADIT (CPC), Bengaluru Present Juridiction The ITO, Ward-7(2)(1), Ahmedabad

ITA 83/AHD/2023

AI Insights

The case revolves around the denial of exemption on leave encashment amounting to Rs. 7,20,600 under Section 10(10AA) of the Income Tax Act, 1961, by the Assessing Officer and the CIT(A). The assessee, Pradipkumar Bhogilal Modi, contested the intimation under Section 143(1) which assessed his income at Rs. 14,25,640, including the disallowed leave encashment. The Tribunal examined the facts that the assessee was absorbed into Bharat Sanchar Nigam Ltd. (BSNL) from the Department of Telecommunication, which was originally part of the Central Government, and thus, the leave encashment should be exempted as per the provisions applicable to Central Government employees.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299942 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-07-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 07-02-2023
• Other Referred Cases: Babulal Patel
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 10(10AA); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . N o . 8 3 /A hd / 2 0 23 ( A s se ss m e nt Y e a r : 20 20- 21 ) Pr a di pk u ma r B ho g i lal M o d i, 13 / 15 3 , A b h il a s h a A p a rt m e n t , B / h. V ya s Wad i, N a va V a d a j , A h m e da ba d-3 8 0 01 3 V s.A D IT ( C P C ) B en ga lur u, Pr e se nt J ur is dic tio n I T O , War d - 7 ( 2) ( 1) , A h m e d a b ad [ P A N N o. AD I P M2 7 44 A ] (Appellant) .. (Respondent) Appellant by : Ms. Jyoti Rizwani, C.A. Respondent by : Ms. Saumya Pandey Jain, Sr. D.R. D a t e of H ea r i ng 17.07.2023 D a t e of P r o no u n ce me nt 19.07.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi on 14.12.2022 for A.Y. 2020-21. 2. The grounds of appeal raised by the assessee are as under: “1. The intimation issued u/s 143(1) of I.T. Act and confirmed by First Appellate Authority is bad in law and deserves to be uncalled for. 2. The assessing officer as well as first appellate authority has erred in law and on facts in disallowing exemption of Rs. 7,20,600/- on account of leave encashment u/s. 10(10AA) of the Act. The same deserves to be deleted. 3. The appellant craves to reserve his right to add, alter, amend or delete any ground of appeal during the course of hearing.” 3. The assessee filed his return of income declaring total income of Rs. 7,05,050/-. Intimation under Section 143(1) of the Income Tax Act, 1961 received by the assessee thereby assessing the total income at Rs. 14,25,640/- by making disallowance of exemption claim on account of leave encashment under Section 10(10AA) of the Act amounting to Rs. 7,20,600/-. ITA No. 83/Ahd/2023 Pradipkumar Bhogilal Modi vs. ITO Asst.Year–2020-21 - 2 - 4. Being aggrieved by the said order under Section 143(1) of the Act the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 5. The Ld. A.R. submitted that the assessee was initially appointed as General Engineer in the Department of Indian Post and Telegraph Department vide order dated 28.11.1983. Subsequently, the assessee was provisionally appointed as Junior Telecom Officer by the Department on 12.09.1990. The Ld. A.R. further submitted that the Government of India Department of Telecommunication issued Presidential Order dated 23.09.2019 thereby permanently absorbing the assessee in the Department of Telecommunication in Bharat Sanchar Nigam Ltd. (in short “BSNL”) w.e.f. 01.10.2000. The Ld. A.R. submitted that while absorbing into BSNL the period for leave encashment was calculated in respect of assessee’s working in the Department of Telecommunication and the same is fully exempted under Income Tax Act. The Ld. A.R. submitted that the Assessing Officer as well as the CIT(A) totally ignored this. 6. The Ld. D.R. submitted that the organization that is BSNL is a Public Sector Unit and therefore, the same is not exempted in respect of leave encashment. The Ld. D.R. relied upon the order under Section 143(1) and order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. The assessee was absorbed in the Department of Telecommunication in respect of BSNL vide Presidential Order dated 23.09.2019 which has given the permanent absorption effective from 01.10.2000. The assessee was ITA No. 83/Ahd/2023 Pradipkumar Bhogilal Modi vs. ITO Asst.Year–2020-21 - 3 - initially appointed on 28.11.1983 in the Department of Indian Post and Telegraphs and therefore, he was initially appointed in the Central Government which was affirmed in the certificate from the Accounts Officer of BSNL on 18.01.2023 that the leave encashment for 300 earned leave was of Department of Telecommunication originally that of Indian Post and Telegraph Department and therefore, the same cannot be treated as a PSU and the assessee is entitled for exemption under Section 10(10AA) of the Act. The CIT(A) as well as the Assessing Officer has not taken cognizance of these facts and wrongly denied the benefit of exemption of leave encashment under Section 10(10AA) of the Act. In fact, in Para 4.3 of the CIT-A’s order the decision of the Tribunal, Mumbai Bench in case of Babulal Patel has been quoted but the same was not at all consider. Therefore, the appeal of the assessee is allowed. 8. In result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 19/07/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 19/07/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad