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Ram Kanwar Rana Versus ITO, Ward-3, Hisar

2016 (6) TMI 687 - ITAT DELHI

Denial of exemption in respect of the amount received by the assessee towards arrears of gratuity - Held that:- As the assessee is found to be an employee holding a civil post under a State, the provisions of section 10(10)(i) are fully attracted in this case entitling him to exemption for the amount under consideration. Once a case falls under clause (i) of section 10(10), the same cannot be brought within the purview of clause (iii) of section 10(10). Therefore, hold that the assessee is entit .....

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and the view taken in respect of arrears of gratuity u/s 10(10) should be followed for arrears of leave encashment u/s 10(10AA). The ld. DR supported this proposition. As both the sides are consensus ad idem on the position that the view taken in the context of section 10(10) as applicable to leave gratuity be followed here in the context of section 10(10AA) in the context of leave encashment, thus desisting from independently examining the later provision. In view of the fact it is held the ass .....

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the CIT(A) on 23.12.2015 in relation to the assessment year 2010-11. 2. The only issue pressed by the ld. AR in this appeal is against the denial of exemption in respect of the amount received by the assessee towards arrears of gratuity at ₹ 6,50,000/- and arrears of leave encashment amounting to ₹ 1,88,720/-. 3. Briefly stated, the facts of the case are that the assessee was an employee of Chaudhary Charan Singh Haryana Agricultural University, Hisar (hereinafter called CCSU) and re .....

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and ₹ 3 lac, respectively, in the case of the assessee, which limit stood exhausted in the earlier year at the time of their receipt. He further noticed that exemption limit was enhanced to ₹ 10 lac for the persons retiring from service on or after 24.5.2010. Since the assessee retired before this cut-off date, the AO opined that the extended benefit of exemption was not available to the assessee. He jettisoned the claim of the assessee for exemption u/s 10(10) of the Act and held th .....

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hat the assessee was not a holder of civil post under the State Government and hence not eligible for exemption u/s 10(10)(i). Further, the assessee was held to be not covered u/s 10(10)(ii) as he did not receive any gratuity under the Payment of Gratuity Act, 1972. That is how, he held that the employees of the CCSU were covered u/s 10(10)(iii) of the Act, for which there is a limit on the exempt gratuity amount, which stood exhausted by the assessee in earlier year. Since the assessee was empl .....

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uity received by the assessee amounting to ₹ 6,50,000/- is concerned, it is found that the case of the assessee is that this amount falls u/s 10(10)(i) of the Act. On the contrary, the Revenue has treated it as a case falling u/s 10(10)(iii). In order to appreciate the rival contentions in right perspective, it will be apposite to set out the relevant parts of section 10, as under :- (10) (i) any death-cum-retirement gratuity received under the revised Pension Rules of the Central Governme .....

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ment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence services ; (ii)….. (iii) any other gratuity received by an employee on his retirement or on his becoming incapacitated prior to such retirement or on termination of his employment, or any gratuity received by his widow, children or dependants on his death, to the extent it does not, in either case, exceed one-half month's salary for each year of completed service, calculat .....

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amount of such gratuity or gratuities was not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this 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. 5. A careful perusal of the above provision indicates that if a case falls under clause (i) of section 10(10), the entire amount of death-cumreti .....

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prevalent at that time at ₹ 3,50,000/- was used by the assessee. It is nobody s case that the extended limit of exemption can be applied to the assessee, because of his retirement which took place much before the cut-off date. To be more specific, the question is as to whether the extant case falls under clause (i) or clause (iii) of section 10(10). If a case does not fall under clause (i), it will automatically go to clause (iii). On a specific query from the Bench, the ld. AR submitted t .....

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eventually rose to the post of Head of Department, Plant Breeding Department at the time of his retirement. Page 32 of the paper book is copy of the assessee s Pension Payment Order, which depicts the assessee s designation as Sr. Scientist, Department of Plant Breeding. On the Pensioner s Portion of this document, there is a reference to Rule 10, 11 and note thereunder of Civil Services Rules (CSR) V.II. As the assessee s pension has been computed under Civil Services Rule, it goes to show tha .....

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o independent agricultural universities in place of the hitherto Punjab Agricultural University, were established. Section 5 of this Act sets out the name of CCSU as the agricultural university to function within the territories of State of Haryana. This proves that the CCSU was established by an Act of Parliament. Page 29 of the paper book is a document which shows that the assessee is a State University covered under University Grants Commission (UGC). It is undisputed that the entire funding .....

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therwise requires, the State includes the Government and Parliament of India and the Government and the legislature of each of the States either local or other authorities within the territory of India or under the control of the Government of India. The expression other authorities has been interpreted in Umesh v. Singh A 1967 Pat. 3(9) F.B. as including: a Board, a University, the Chief Justice of a High Court, having the power to issue rules, bylaws or regulations having the force of law. The .....

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