UMA DUTT SHARMA,MUMBAI V. INCOME TAX OFFICER, WARD 2(1)(1), KANPUR, KANPUR

ITA 655/LKW/2025

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The case involves Uma Dutt Sharma, who retired from the State Bank of India and received Rs.9,04,635 as leave encashment, which he claimed as exempt under section 10(10AA)(ii) of the Income Tax Act. The Assessing Officer initially allowed only Rs.3,00,000 of the claim, disallowing the remaining Rs.6,04,635. The CIT(A) upheld this decision, leading Sharma to appeal to the Income Tax Appellate Tribunal. During the tribunal proceedings, a new CBDT notification was presented, which retrospectively increased the exemption limit for leave encashment to Rs.25 lakhs for non-government employees. The Tribunal, acknowledging the retrospective effect of the notification, set aside the CIT(A)'s order and directed a re-assessment in light of the new notification.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785123 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 21-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REVENUE DID NOT EXPRESS ANY; AMIT KUMAR
• Assessee Lawyers: SUNIL POWAR
• Keywords: Condonation of delay; Set aside; Retrospective amendment
• Section: 10(10AA)

Judgement Text

"I.T.A. No.655/Lkw/2025 Assessment Year:2019-20 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.655/Lkw/2025 Assessment year:2019-20 Uma Dutt Sharma A 402, Vidyanagar, Evershine Nagar, Malad West Mumbai. PAN:AKYPS2637P Vs. Income Tax Officer, Ward-2(1)(1), Kanpur. (Appellant) (Respondent) O R D E R (A) This appeal vide I.T.A. No.655/Lkw/2025 has been filed by the assessee for assessment year 2019-20 against impugned appellate order dated 08/02/2023 (DIN & Order No.ITBA/NFAC/S/250/2022- 23/1049551618(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. (B) This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of IT Act. The assessee has submitted application, duly supported by affidavit, for condonation of delay in filing of the appeal pleading that the delay was unintentional and beyond the control of the assessee and has requested to admit the appeal for hearing. The learned Sr. Departmental Representative for Revenue did not express any Appellant by Shri Sunil Powar, C.A. Respondent by Shri Amit Kumar, D.R. Printed from counselvise.com I.T.A. No.655/Lkw/2025 Assessment Year:2019-20 2 objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and the appeal is admitted for hearing. (C) The facts of the case, in brief, are that the assessee retired from service of State Bank of India in financial year 2018-19 and received Rs.9,04,635/- as leave encashment. The assessee filed his return of income on 23/07/2019 and claimed the whole amount i.e. Rs.9,04,635/- under section 10(10AA)(ii) of the Act as exempt. While processing the return filed by the assessee, the Assessing Officer restricted the same to Rs.3,00,000/- and disallowed remaining amount of Rs.6,04,635/-. Being aggrieved, the assessee carried the matter in appeal before the learned CIT(A). Vide impugned appellate order dated 08/02/2023, the learned CIT(A) has dismissed the assessee’s appeal. Now the assessee is in appeal before the Income Tax Appellate Tribunal. (D) During the course of hearing before the Tribunal, learned A.R. for the assessee submitted that CBDT has issued Notification No.31/2023/F/ No.200/3/2023-ITA-I dated 24th May, 2023 whereby the benefit in terms of section 10(10AA)(i) &(ii) has been extended to non government employees, by raising the limit to Rs.25 lakhs and that too with retrospective effect. Learned A.R. for the assessee also submitted that learned CIT(A) has erred in not following the said notification dated 24/05/2023 of CBDT with retrospective effect. He submitted that the matter regarding assessee’s claim under section 10(10AA) of the Act may be restored back to the file of the Assessing Officer with the direction to pass fresh order on this specific issue, giving due consideration to the aforesaid CBDT Notification dated 24th May 2023; and after providing reasonable opportunity to the assessee. Printed from counselvise.com I.T.A. No.655/Lkw/2025 Assessment Year:2019-20 3 Learned Departmental Representative left the matter to the discretion of the Bench. (D) Both sides have been heard. Materials available on record have been perused. From perusal of the records it is found that CBDT has issued Notification No.31/2023/F/ No.200/3/2023-ITA-I dated 24th May, 2023 whereby the benefit in terms of section 10(10AA)(i) &(ii) has been extended to non government employees, by raising the limit to Rs.25 lakhs and that too with retrospective effect. When the assessment order was passed, this notification was not in existence. However, since the aforesaid notification of CBDT is effective from retrospective effect, the appellate order of learned CIT(A) is set aside and the Assessing Officer is directed to pass fresh order on this specific issue in accordance with law, keeping in view the aforesaid CBDT notification dated 24th May, 2023; after due verification of relevant facts and after providing reasonable opportunity to the assessee. (D) In the result, the appeal of the assessee stands allowed for statistical purposes. (Order pronounced in the open court on 14/11/2025) Sd/. (ANADEE NATH MISSHRA) Accountant Member Dated:14/11/2025 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T. Printed from counselvise.com "