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2024 (1) TMI 270 - AT - Income TaxExcess gratuity u/s 10(10) - 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 as state Government employee or holder of civil post under the state - HELD THAT - Since the facts are similar to 2022 (6) TMI 748 - ITAT DELHI A.Y. 2011-12 vide order dated 15.06.2022 and the assessee is the employee of the same university, we set aside the order of learned CIT(A) and decide the issue in favour of the assessee. We direct the Assessing Officer to allow exemption under section 10(10) of the Act on the disputed amount of gratuity received by the assessee during the year.
Issues:
The issues involved in this case are: 1. Delay in filing the appeal and condonation of the same. 2. Claim of excess gratuity under section 10(10) of the Income-tax Act. 3. Interpretation of the provisions of section 10(10)(i) and 10(10)(iii) in relation to gratuity received by the assessee. 4. Comparison with similar cases and decisions of the ITAT. Delay in Filing Appeal and Condonation: The appeal was filed with a delay of 350 days, attributed to efforts before the CIT(A) to recall the order passed without providing adequate opportunity for the assessee to be heard, along with the mental illness of the assessee's son. The delay was condoned after hearing both parties and considering the reasons provided. Excess Gratuity Claim under Section 10(10): The Assessing Officer disallowed the claim of excess gratuity of Rs. 6,50,000 under section 10(10) of the Income-tax Act, stating that the assessee, as an employee of Hisar Agriculture University, cannot be considered a state government employee or holder of a civil post under the state. The CIT(A) upheld this disallowance, concluding that the appellant is not eligible for exemption under section 10(10)(i) and that the limit on gratuity amount allowable under section 10(10)(iii) applies. Interpretation of Section 10(10)(i) and 10(10)(iii): The ITAT analyzed the provisions of section 10(10)(i) and 10(10)(iii) in light of the assessee's case. It was determined that the assessee, as an employee holding a civil post under a State, is entitled to exemption under section 10(10)(i) for the gratuity amount received. The ITAT allowed the exemption under section 10(10)(i) for the arrears of gratuity received by the assessee. Comparison with Similar Cases and ITAT Decisions: The ITAT referred to a previous decision in a similar case where it was held that if a case falls under clause (i) of section 10(10), the entire amount of gratuity is exempt. In this case, the ITAT found that the assessee's case falls under clause (i) of section 10(10) as a holder of a civil post under a State, entitling him to exemption for the gratuity amount received. The ITAT set aside the order of the CIT(A) and allowed the appeal in favor of the assessee. Conclusion: The ITAT allowed the appeal of the assessee, directing the Assessing Officer to grant exemption under section 10(10) of the Act for the disputed amount of gratuity received during the year. The decision was pronounced in the open court on January 2nd, 2024.
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