The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the claim of exemption under Section 10(10)(i) of the Income Tax Act, 1961 in respect of gratuity and leave encashment shall be allowed when the assessee is an employee holding a civil post.
The counsel submitted that the issues are squarely covered by the decision of the Tribunal in the case of Ram Kanwar Rana Vs. ITO and in the case of Manohar Lal Batra Vs. ITO. He contended that both were the employees of the Hisar Agricultural University and the Coordinate Bench after considering the submissions have allowed the claim of the assessee.
The Departmental Representative submitted that the Assessing Officer (AO) has relied upon the notification issued by the Central Board of Direct Taxation (CBDT) that the employees of the University are not employees of the State. Therefore, the monetary limit as available to the government employees would not be extended to the employees of the University.
The Two-member bench comprising of Shamim Yahya (Accountant member) and Kul Bharat (Judicial member) held that it was demonstrated that the Cabinet Committee on Security (CCS) conduct rules are applicable to the employees of Hisar Agriculture University and they are treated at par with the Scientists of Indian Council of Agricultural Research (ICAR). Under these undisputed facts, there was no reason to take a different view on the matter. The AO was directed to delete the impugned addition. Thus, the appeal of the assessee was allowed.
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