आयकर अपीलीय अधिकरण “एस एम सी” न्यायपीठ पुणे में ।

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं . / ITA No.1781/PUN/2025 धििाारण वर्ा / Assessment Year : 2020-21 Sudhakar Gundappa Paldewar, Commissioner of Flat No. 210, Solitaire pride Income Tax (Appeals), Beside Vidut arcade, Bachupally Vs. New Delhi B.O., Bachpalle, K.V.

Rangareddy, Telengana, Hyderabad-500090 PAN : AAMPP4397H अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Sudhakar Gundappa Paldewar Department by : Shri Milind Debaje- JCIT Date of hearing : 26-08-2025 Date of 31-10-2025 Pronouncement : आदेश / ORDER PER ASTHA CHANDRA, JM :

The appeal filed by the assessee is directed against the order dated

27.09.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2020-21.

2. There is a delay of 238 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, condone the said delay and proceed to decide the appeal.

3. Briefly stated, the facts of the case are that the assessee is a retired employee of PSU Bank i.e. State Bank of India. In his return of income filed for the relevant AY 2020-21, the assessee claimed exemption u/s 10(10AA)(i) treating himself to be an employee of the Government before his retirement instead of exemption u/s 10(10AA)(ii) and thus claimed the refund of Rs.1,96,170/- The return of the assessee was processed u/s 143(1) of the Income Tax Act, 1961 (the “Act”) wherein the Ld. Centralized Processing Centre (“CPC”)/Assessing Officer (“AO” made an upward adjustment of Rs.5,45,848/- restricting the exemption to Rs.3,00,000/- and bringing the balance encashment of unutilized Earned Leave to tax, thus, reducing the quantum of refund to Rs.1,31,291/- as against the refund of Rs.1,96,170/- claimed by the assessee in his ROI. The assessee filed a rectification application u/s 154 wherein the Ld. CPC/AO vide its order dated 06.10.2022 determined the balance payable at Rs.Nil and rejected the excess claim of Rs.75,715/-.

4. Aggrieved by such order of the Ld. CPC/AO u/s 154 of the Act, the assessee filed an appeal before Ld. CIT(A)/NFAC who dismissed the appeal of the assessee upholding the action of the Ld. CPC/AO in rejecting the claim of deduction u/s 10(10AA)(i) of the Act by observing as under:-

5.3 The principal contest of the appellant is that, though employees of PSUs and nationalized banks cannot be treated as government employees, they have to be given enhanced exemption in par with the Central Government employees, since factor determined by the notification dated 31.05.2002 was, as per the conditions that prevailed then, was that the determining Rs. 3,00,000/- was based on the maximum basic pay of highest paid government employee being the Cabinet Secretary to the Union of India. Since, the notification has not been modified in consonance with the Increase in basic pay of the Cabinet Secretary, which is at present Rs. 2.5 Lakhs at present, the appellant should not be deprived because of the inaction on part of the authorities to have failed to modify the notification suitably.

5.4 The narration of the factors which ought to determine the quantification of allowance/deduction uls. 10(10AA)(ii) linking the same to the pay of the Cabinet Secretary is appreciated/However in the absence of Gazette notification by CBDT. providing approval to the basis for quantification of deduction u/s 10(10AA)(il), made out by the Appellant, the same cannot be entertain