MNIT Employee, being a Govt Employee, Eligible for Full Exemption of Earned Leave Encashment on Retirement: ITAT

MNIT - Employee - Govt - Employee - Encashment - Retirement - ITAT - TAXSCAN

The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) has held that the Malviya National Institute of Technology (MNIT) employee being a government employee would be eligible for full exemption of earned leave encashment at the time of retirement. 

The assesse Narender Singh Yadev was an employee of Malviya National Institute of Technology, Jaipur which was a Govt. Institution and was retired on superannuation and raised claim for seeking pension under Section 10(10AA) (ii) of the Income Tax Act 1961 on account of leave encashment of salary. 

However, the Commissioner of Income Tax (CIT(A)) while relying upon the decision of Hon’ble Delhi High Court in the case of Kamal Kumar Kalia vs Union of India denied the exemption to the assessee by holding that since the assessee was not a Govt. employee, he was not entitled to get full exemption on leave encashment under Section 10(10AA)(ii) of the Act. 

Ashok Kanodia, appeared on behalf of the assessee and Monisha Choudhary, appeared on behalf of the revenue.

The Division Bench of Sandeep Gosain, (Judicial Member) and Rathod Kamlesh Jayantbhai, (Accountant Member) allowed the appeal observing that, as per the documents, Malviya National Institute of Technology, Jaipur (Raj) was a Govt. Institution, therefore, the assessee was entitled for full exemption of earned leave encashment on retirement.

“The CIT(A) while rejecting the claim of the assessee has solely relied upon the decision of Hon’ble Delhi High Court in the case of Kamal Kumar Kalia vs Union of India (supra). However, the para materia contained in the said judgement of the facts are altogether different from the facts of the present case as in the case of Kamal Kumar Kalia vs Union of India,” the Bench further held.

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