The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has denied exemption under Section 10(10AA) of the Income Tax Act, 1961 as the employee of Ajmer Vidhyut Vitran Nigam could not be regarded as a state or central government employee.
The appellant Devendra Kumar Gupta who had retired was an employee of Ajmer Vidyut Vitran Nigam Ltd. and had claimed an amount being leave encashment received as exempt under Section 10(10AA) of the Income Tax Act. However, the AO, and CPC while processing the return of income had not allowed the 100% exemption claimed by the appellant.
Monisha Choudhary, on behalf of the revenue strongly opposed the claim of the assessee holding the decision in the case of Kamal Kumar Kalia vs. Union of India that the employees of Public Sector Undertakings (PSU) and Nationalised Banks or other Institutions which were classified as ‘State’ could not be assumed the status of Central Government and State Government employees.
She further contended that the company Ajmer Vidyut Vitran Nigam Ltd was a State Government Public Sector Undertaking and the appellant was an employee of this State PSU. No evidence to the contrary had been furnished despite the opportunity granted, she added.
The two-member Bench of Sandeep Gosain (Judicial Member) noticed that the assessee had merely claimed that he was working as State Government Employee whereas the pension and other emoluments had been issued by Ajmer Vidhyut Vitran Nigam Ltd.
The said Ajmer Vidyut Vitran Nigam Ltd. was appearing as a Public Sector Undertaking on the official website of the Comptroller & Auditor General in cag.gov.in and also under Rajasthan PSU’s on the website indianpsu.com and other publicly available documents.
The Bench dismissed the appeal filed by the assessee.
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