TMI Blog2022 (6) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... Judicial Member For the Assessee : Shri Rishabh Ostwal, Adv. And Shri Deepak Ostwal, Adv. For the Revenue : Ms. Garima Sharma, Sr. DR ORDER PER ANUBHAV SHARMA, JM: The assessee has come in appeal against order dated 11.01.2016 in appeal no. 142/HSR/TFR/2013-14 for the assessment year 2011-12 passed by ld. CIT(A), Hisar (hereinafter referred to as the First Appellate Authority in short Ld. F.A.A. ) in appeal pending before it arising out of assessment order dated 28.01.2014 passed u/s 147/143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) by the assessing officer, Income Tax Officer, Ward-1, Hisar (hereinafter referred to as Ld. Assessing officer or in short Ld.AO ). 2. The facts in brief are appellant assessee filed return of income declaring total income of Rs. 8,42,880/-. The Ld. AO observed that assessee has claimed excess gratuity of Rs. 6,50,000/- u/s 10(10) of the Income Tax Act and the ld. AO was of the view that assessee is not entitled for this claim because as an employee of Hisar Agriculture University he cannot be considered to be State Government Employees or holder of the Civil post under the State. In appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 12, university is included in other authorities of the State 2.2 Service gratuity, Death-cum-Retirement Gratuity, Pension and Leave encashment are being paid/admissible as per the corresponding provisions of Punjab CSR Vol. II applicable to Haryana Govt, employees as amended from time to time. These rules are provided under the Act and Statutes of the Haryana and Punjab Agricultural Universities Act, 1970. Similar views that employees of the University are treated at par with the employees of the State Govt, were held by the Hon ble Punjab Haryana High Court in the case of Yash Pal Dhir Vs. R N Gasain (P H) 1992. It was held that the question, therefore, is whether holding of an appointment under the university is in connection with the affairs of the State. The official members are senior officers of the State Govt. and, therefore, I have no hesitation in holding that the petitioner who retired as a Comptroller of the University, was holding the appointment in connection with the affairs of the State. Hence, employees of the University are treated at par with the employees of the State Govt. 2.4 Provisions of Gratuity under the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only because the employees of said university are treated as government employees they cannot be said to be holding civil post under the state. 7. Giving thoughtful consideration the matter on record. The bench is of considered opinion that Ld. DR was unable to cite any factual distinction or provision of law then one which were considered in the Coordinate Bench s decisions cited above. In ITA No. 3713/Del/2016, based upon another order in ITA No. 1307/Del/2016 where in it was observed in para no. 4 of ITA No. 3713/Del/2016 as below : 4. I have heard the rival submissions and perused the relevant material on record. The controversy in this appeal can be viewed separately in respect of receipt of gratuity amount and leave encashment. In so far as the addition on account of gratuity received by the assessee amounting to Rs.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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5.2010 raised the ceiling of exemption from Rs.3,50,000/- to Rs.10 lac. Since the original amount was received by the assessee during the currency of an earlier year on his retirement, the exemption limit prevalent at that time at Rs.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 that the case of the assessee should be considered under subclause (i) of section 10(10) as a holder of civil post under a State. In order to construe any person as a holder of civil post under a State, two requirements must be fulfilled viz., first that the employee should be holding a civil post and, second, such civil post must be under a State. 6. The first condition is that the employee should be holding a civil post. The assessee was appointed as a Research Assistant in December, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Chief Justice of a High Court, having the power to issue rules, bylaws or regulations having the force of law. The above discussion manifests that CCSU is covered within the meaning of State . 8. As the assessee is found to be an employee holding a civil post under a State, in my considered opinion, 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). I, therefore, hold that the assessee is entitled to exemption u/s 10(10)(i) in respect of gratuity amount received in total upto Rs.10 lac, which covers a sum of Rs.6,50,000/- received during the year. Overturning the impugned order on this score, I allow exemption u/s 10(10)(i) to the arrears of gratuity received by the assessee at Rs.6,50,000/- during the instant year.. 8. Thus, respectfully following the settled proposition of law in regard to class of employees to which assessee also belongs, the Grounds are sustained and the appeal is allowed. The impugned order is set aside. The Ld. AO shall allow exe ..... 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