Rajiv Roy, J. – The writ petition has been preferred: –

for issuance of writ of mandamus and other appropriate writ(s), order(s) or direction(s) declaring that part of the Section 10(10AA) of the Income Tax Act, 1961 (henceforth for short ‘the Act’) by operation of which a cap has been placed on exemption from income tax from the leave encashment amount at the time of retirement of the employees other than government employees, particularly as such cap has not been placed on the amount receivable as leave encashment at the time of retirement in respect of government employees, as ultra vires to the Constitution of India and remove the unconstitutional part by applying the Doctrine of Severability so that the beneficial portion of the enactment is saved, the intent of the Legislature to provide relief to the retirees in their twilight days is not frustrated and the enactment after severance does not suffer from unconstitutionality as prayed for by the petitioner.

2. The facts leading to the writ petition are as follows:

3. The petitioner joined the State Bank of India (henceforth for short ‘the S.B.I.’) in the year 1981 and after putting in more than 36 years of service retired on 31.08.2017.

4. According to the writ petition filed prior to his retirement, he made a case that once retired, he was entitled to Rs. 6,70,000/- but after deduction of income tax he will be getting only a sum of Rs. 4,70,000/- approximately as rest of the amount will be liable to tax. However, had he been in the State or Central Government Services, no deduction on account of income tax would have been made from the leave salary payable to the petitioner at the time of his retirement and he would have been entitled to receive the entire sum.

5. According to him, it is only because of the operation of Section 10(10AA) of the Income Tax Act, 1961 (henceforth for short ‘the Act’) which discriminates between the similarly placed group of employees that he would lose so much money. Section 10 (10AA) of ‘the Act’ read as follows: –

CHAPTER III

INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME:

Incomes not included in total income

10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included (10AA) (i) any payment received by an employee of the Central Government or a State Government as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise;

(ii) any payment of the nature referred to in sub-clause (i) received by an employee, other than an employee of the Central Government or a State Government, in respect of so much of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise as does not exceed ten months, calculated on the basis of the average salary drawn by the employee during the period of ten months immediately preceding his retirement whether on superannuation or otherwise, subject to such limit as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government:

Provided that where any such payments are received by an employee from more than one employer in the same previous year. the aggregate amount exempt from income-tax under this sub- clause shall not exceed the limit so specified:

Provided further that where any such payment or payments was or were received in any one or more earlier previous years also and the whole or any part of the amount of such payment or payments was or were not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this sub-clause shall not exceed the limit so specified, as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.

Explanatio