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2024 (6) TMI 1230 - HC - Income TaxIssues: Retired employees seeking revision of income limit for taxing purposes on earned leave salary under Section 10AA (ii) of the Income Tax Act with retrospective effect. Analysis: The petitioners, retired employees of the 5th respondent, filed writ petitions seeking a mandamus to review the income limit for taxing earned leave salary under Section 10AA (ii) of the Income Tax Act. The Act allows exemption on encashment of earned leave salary, subject to the limit specified by the Central Government. The last notification on this matter was issued in 2002, and no revision was made despite subsequent pay revisions. The latest notification in 2023 set the upper limit at Rs. 25 lakhs. The Court noted that the power to issue such notifications lies with the Executive, and it cannot mandate retrospective revisions. The Court cited the doctrine of separation of powers and limitations on its authority in policy matters, emphasizing that the Executive should decide on such revisions. The Revenue's Standing Counsel mentioned a Delhi High Court case where revision was directed, but the Government only issued the notification in 2023, applicable from 01.04.2023. Despite sympathy for the petitioners, the Court stated it cannot mandate the revision of the upper limit for employees who retired before the latest notification. The Court highlighted that such policy decisions fall within the Executive's domain. The writ petitions were disposed of, allowing the petitioners to approach the Government for their requested reliefs, leaving the decision to the Executive. Any pending interlocutory applications were dismissed.
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