Gujarat High Court

Lt. Col. Nikhil Subodh Gajjar Retd vs Principal Commissioner Of Income Tax ... on 13 November, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

                                                                                                                    NEUTRAL CITATION




                         C/SCA/8993/2024                                          CAV JUDGMENT DATED: 13/11/2025

                                                                                                                     undefined




                                                                                Reserved On   : 14/10/2025
                                                                                Pronounced On : 13/11/2025

                                   IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                     R/SPECIAL CIVIL APPLICATION NO. 8993 of 2024


                      FOR APPROVAL AND SIGNATURE:


                      HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                      and
                      HONOURABLE MR. JUSTICE PRANAV TRIVEDI

                      ==========================================================

                                  Approved for Reporting                          Yes            No
                                                                                                 ✓
                      ==========================================================
                                     LT. COL. NIKHIL SUBODH GAJJAR RETD
                                                      Versus
                         PRINCIPAL COMMISSIONER OF INCOME TAX AHMEDABAD 3 & ANR.
                      ==========================================================
                      Appearance:
                      MR MOHIT R BALANI(12259) for the Petitioner(s) No. 1
                      MS MAITHILI D MEHTA(3206) for the Respondent(s) No. 1
                      NOTICE SERVED for the Respondent(s) No. 2
                      ==========================================================

                         CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                               and
                               HONOURABLE MR. JUSTICE PRANAV TRIVEDI


                                                           CAV JUDGMENT

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Heard learned advocate Mr. Mohit R.

Balani for the petitioner and learned

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

Senior Standing Counsel Ms. Maithili D.

Mehta for the respondent.

2. Rule returnable forthwith. Learned

Senior Standing Counsel Ms. Maithili D.

Mehta waives service of notice of rule on

behalf of the respondents.

3. By this petition under Article 227 of

the Constitution of India, the petitioner

has prayed for quashing and setting aside

the order dated 22.03.2024 passed under

section 119(2)(b) of the Income Tax Act,

1961 (For short "the Act").

4. Brief facts of the case are that the

petitioner was granted President's

Commission in the rank of second

lieutenant into Army with effect from

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

17.12.1977 and retired from the services

after serving the Armed Forces for 22.5

years on 31.05.2000. During the tenure of

his service, the petitioner was posted in

Uri(Jammu and Kashmir) in the year 1985

where the petitioner sustained serious

injuries to his spine due to a fall at

Mallangam pass located at 15000 ft. during

an operation carried out against the

enemy. The petitioner was thereafter

hospitalized and downgraded medically to

A3( Permanent) in March, 1987 by the Board

of Medical Specialists at 92 Base Hospital

at Srinagar.

5. It is the case of the petitioner that

due to the medical condition, the

petitioner was invalidated from attending

all future professional courses and

selection grade promotions with effect

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

from March, 1987 and therefore, he opted

and was granted premature retirement with

effect from 31.05.2000 on completion of

terms of engagement. It is also the case

of the petitioner that during his service

and after his retirement, the return of

income for salary/pension were filed

within the prescribed time under section

139(1) of the Act which included the

amount of pension remitted to him with

effect from January, 2006 to December,

2018.

6. It is the case of the petitioner that

the petitioner was not granted disability

pension at the time of retirement and the

same was granted after the orders of the

Army Headquarters in 2017 to the Military

Hospital for reassessment of medical

condition of the petitioner. Accordingly,

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

the medical condition of the petitioner

was checked by the Reassessment Board of

Army Medical Specialists at Military

Hospital, Ahmedabad and it was found that

the condition of the petitioner has not

improved and therefore, the petitioner was

granted 20% disability.

7. The Principal Controller of Defence

Accounts, Allahabad based on the medical

reassessment by Medical Board of Doctors

granted 30% disability pension for life to

the petitioner vide Disability Pension

Payment Order on 30.10.2018 with

retrospective effect from 01.01.2006.

8. It is the case of the petitioner that

the disability pension granted to the

petitioner is exempt as per the provisions

of Notification (F No. 878F-IT) dated

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

21.03.1992 issued under sections 60 and

60A of the Income Tax Act, 1922 which has

a force of law in accordance with the

provisions of section 297 of the Act.

9. Therefore, the petitioner by letter

dated 30.01.2019 requested the Principal

Commissioner of Income Tax-7, Ahmedabad

having the territorial jurisdiction over

the administration of assessments

pertaining to the petitioner to refund the

taxes paid in relation to disability

pension pertaining to Assessment Years

2006-2007 to 2018-2019.

10. The petitioner thereafter sent

multiple reminders on 25.03.2019,

15.04.2019 and 10.06.2019.

11. Respondent no.2 Income Tax Officer

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

Ward-7(1)(1), Ahmedabad vide letter dated

05.12.2019 informed the petitioner that

the pension which has been held as

disability pension on which tax was paid

by the petitioner could be claimed as

refund only by way of filing a revised

return or by filing a petition under

section 264 of the Act. It was also

informed that the disability pension which

is otherwise treated as exempt under the

provisions of the Act, is allowable to the

assesses who have been invalidated from

the services on account of disability and

attributable to or aggravated by such

service and not to those personnel who

have retired on superannuation or

otherwise. It was also pointed out to the

petitioner that as the petitioner had not

offered the income under the head 'salary'

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

while filing the revised return of income

for Assessment Years 2017-2018 and 2018-

2019, the petitioner was not eligible for

claiming any refund.

12. The petitioner, therefore, was

informed that as the petitioner had taken

voluntary retirement, the petitioner would

not be eligible for any tax exemption in

accordance with Circular No. 13/2019.

13. The petitioner, thereafter, by letter

dated 16.12.2019 informed respondent no.2

that case of the petitioner would fall

within the Circular No. 13/2019 as the

Board of Army medical authorities and

office of the Principal Controller of

Defence Accounts have found no improvement

in the medical condition of the petitioner

and have acknowledged that the petitioner

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

was invalidated and thereby eligible for

disability pension. It was contended by

the petitioner that the petitioner was

getting pension without any deduction of

Tax at Source.

14. As the petitioner did not receive any

response, the petitioner again by letter

dated 21.01.2020 reiterated the request

followed by reminder letters dated

20.09.2022, 15.12.2022, 07.02.2023,

17.05.2023, 30.06.2023, 06.10.2023 and

03.01.2024.

15. Respondent no.1 The Principal

Commissioner of Income Tax, Ahmedabad-3

however by impugned order dated 22.03.2024

rejected the application of the petitioner

on the basis that application dated

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

20.09.2022 filed by the petitioner for the

relevant years was barred by limitation

as per CBDT Circular No. 9/2015 which only

allows the respondent no.1 to condone the

delay for a period of six years from the

end of relevant assessment year.

16. Regarding the remaining Assessment

Years from 2016-2017 to 2018-2019,

respondent no.1 vide letter dated

27.03.2024 informed the petitioner that

claim of the refund of the petitioner was

not entertained in view of pendency of

challenge against Circular No. 13/2019 in

case of Col. Pradeep Mathur and others v.

Union of India before the Hon'ble Apex

Court.

17. Being aggrieved, the petitioner has

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

preferred this petition.

18. Learned advocate Mr. Mohit Balani for

the petitioner submitted that the

petitioner is entitled to refund as per

section 237 of the Act which provides that

if any person satisfies the Assessing

Officer that the amount of tax paid by him

or on his behalf or treated as paid by him

or on his behalf for any assessment year

exceeds the amount with which he is

properly chargeable for that year, he

would be entitled to a refund. It was

submitted that the respondent authorities

have failed to consider that the

petitioner was given disability pension in

the year 2018 only and therefore, the

petitioner has made the application for

refund of the tax paid in view of grant of

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

disability pension with effect from

1.01.2016 onwards and therefore, same

cannot be considered as time barred.

provides for form of claim of refund by

furnishing the return in accordance with

the provisions of section 139. It was

therefore, submitted that the respondent

authorities ought to have permitted the

petitioner to file the revised return to

claim the refund to which the petitioner

is entitled in view of provisions of

section 297 of the Act which corresponds

to section 60 of the Income Tax Act, 1922.

It was submitted that sub-section (29) of

section 297 of the Act provides for

disability pension as exempt income.

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

20. Learned advocate Mr. Balani invited

the attention of the Court to Circular

No.9/2015 which prohibits entertaining an

application for claim of refund/loss

beyond six years from the end of relevant

assessment year and submitted that the

Circular No.9/2015 would not be applicable

in the facts of the case as the petitioner

is entitled to the refund of the tax paid

as disability pension received by the

petitioner is falling under exempt income

and therefore, the petitioner is not

liable to pay any tax on such disability

pension.

21. In support of his submission, reliance

was placed on the decision of Hon'ble

Delhi High Court in case of Sun

Pharmaceutical Industries Ltd. v. Income

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

taxmann.com 469 (Delhi) wherein it is held

as under:

"53. To summarise, sub-section (2) to Section 239 was a provision ascribing a period of limitation for instituting claims for refund. The same came to be omitted with effect from 01 September 2019.

                                               This     legislative       act     is
                                               demonstrative     of    the     clear
                                               legislative    intent     to    avoid
                                               prescribing    strict     limitation
                                               periods    within    which     refund

applications may be preferred and may be considered as having been validly instituted. This more so in light of the stand of the CBDT itself which in its numerous circulars spoke of tax erroneously deducted not being liable to be viewed as a legitimate collection of an impost sanctioned by law."

22. Reliance was also placed on the

decision of Hon'ble Madhya Pradesh High

Court in case of Colonel Ashwani Kumar Ram

Singh v. Principal Commissioner of Income

Tax reported in (2020) 115 taxmann.com 193

(Madhya Pradesh) wherein it is held as

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

under:

"13. It is true that the Commissioner of Income Tax is empowered to condone a delay up to six years and beyond that, the Central Board of Direct Taxes is empowered to condone the delay and in those circumstances, the application submitted by the petitioner for refund of tax for the assessment year 2007 - 08 to 2015 - 16 has been partially allowed and refund has been ordered only in respect of assessment year 2012 - 13 to 2015

- 2016 without interest.

14. Heavy reliance has been placed upon a circular issued by the Central Board of Direct Taxes dated 09.06.2019. Reliance has been placed by the learned counsel for the respondent upon paras - 3 and 6 of the CBDT circular. The aforesaid paragraph reads as under:-

"3. No condonation application for claim of refund / loss shall be entertained beyond six years from the end of the assessment year for which such application / claim is made. This limit of six years shall be applicable to all authorities having powers to condone the delay as per the

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

above prescribed monetary limits, including the Board. A condonation application should be disposed of within six months from the end of the month in which the application is received by the competent authority, as far as possible.

6. A belated application for supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided other conditions as referred above are fulfilled. The powers of acceptance / rejection within the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/ CsIT in case of returns claiming refund and supplementary claim of refund would be subject to the following further conditions:

(i) The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act.

(ii) No interest will be admissible on belated claim of refunds.

(iii) The refund has arisen as a result of excess tax

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

deducted/collected at source and/or excess advance tax payment and/or excess payment of self-assessment tax as per the provisions of the Act."

15. Meaning thereby, there is a power with the Central Board of Direct Taxes to condone the delay.

                                               There     appears        to     be     no
                                               justification      in     forcing     the

petitioner to file an application before Central Board of Direct Taxes. Once the power is there and it was not the petitioner, who was at fault in the matter, this Court, in the peculiar facts and circumstances of the case, is of the considered opinion that the delay can be condoned by this Court also, and therefore, the delay in filing the application for refund of tax is hereby condoned. It is not a case where the assessee was sleeping over his right, it is a case where the assessee was fighting with the department for his legitimate right of grant of disability pension, as he was disabled officer and his original application was allowed only on 03.08.2017 and the order was passed by the Ministry of Defence on 17.11.2017 granting him disability pension w.e.f.

01.01.2006 and with quite

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

promptitude he has submitted an application for refund of tax.

16. This Court in the case of Colonel Madan Gopal Singh Negi v/s CIT (II) (W.P. No.29017/2018) vide judgment dated 28.02.2019, in similar circumstances has held as under:-

"In the considered opinion of this Court, as the income of the petitioner was exempted, the department does not have any other choice except to refund the amount and the disabled Army Officer cannot be made to run from pillar to post on account of various technicalities as stated in the writ petition. This Court is aware of its limitation of not Travelling and Traversing into the prohibited territory of "Legislating through Court orders" however this Court feels duty bound to state the obvious, more so when the "Call of Duty" of a Judge inspite him to Underline the requirement of brushing aside the "Administrative Technicality" while Dispensing Justice. Our Army Soldiers, Naval Officials and Fighter are Day and Nights protecting Our Territorial Borders from Enemy Infiltration and Attacks and even while putting their life to the greatest risk, are

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

keeping all Citizens safe and Secure and making Our life free from all such Dangers, where they don't think of "Technicalities" while Fighting with Enemies at the Front, as to whether pulling the Trigger of their Gun would invite a "Court of inquiry"

and from this practical perspective this Court wants to express its concern for not putting too much of technicalities in such matters by those who are invested with Administrative Powers to deal and decide the affairs of the Personnel of Indian Armed Forces.

                                                       The     Court      records     and
                                                       reiterates       its     absolute

commitment to adherence of Rule of Law in its strictest terms, without carving out any exception to it, however it intends to convey its concern for the welfare of the "War Heros" who marvels at the Borders and within the Country, should not be unnecessarily Harassed or Troubled, for Technical adherence to some archaic administrative procedures having no thoughtful purpose sought to be achieved, while denying Legitimate Relief to

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

the Members of the Armed Forces."

17. In light of the aforesaid and in the considered opinion of this Court, as this Court has already condoned the delay, the respondent is directed to process the claim of the petitioner and to grant a refund for which he is lawfully entitled within a period of sixty days from the date of receipt of certified copy of this order.

18. In the matter of grant of interest, the CBDT circular will not come in way of the petitioner, as the petitioner is not at fault in the matter. The respondent shall also pay the interest in respect of the entire amount right from 2007 - 08 to 2015 - 16, as the statute i.e. Income Tax Act, 1961 does not debar an assessee, keeping in view the peculiar facts and circumstances of the case, for grant of interest."

23. Reliance was also placed on the

decision of Hon'ble Punjab and Haryana

High Court in case of Col. Jaswinder Pal

Singh v. Principal Commissioner of Income

Tax reported in (2023) 152 taxmann.com 103

(Punjab & Haryana) wherein in similar

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

facts, relying up the decision of Hon'ble

Delhi High Court in case of Sun

Pharmaceutical Industries Ltd (supra) and

the decision of Hon'ble Madhya Pradesh

High Court in case of Colonel Ashwani

Kumar Ram Singh (supra), the Court allowed

the writ petition and the amount of tax

paid by the petitioner for the relevant

years was ordered to be refunded along

with interest at the rate of 9% per annum.

24. Reliance was also placed on the

decision of Hon'ble Apex Court in case of

Principal Commissioner of Income Tax v.

Jaswinder Pal Singh reported in (2024) 466

ITR 249 dismissing the SLP arising out of

decision of Punjab and Haryana High Court

in case of Col. Jaswinder Pal Singh

(supra). It was therefore, submitted that

the impugned order be quashed and set

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

aside.

25. On the other hand, learned Senior

Standing Counsel Ms. Maithili D. Mehta for

the respondent reiterated the contents of

the impugned order and submitted that

Circular No.13/2019 dated 24.06.2019 is

sub-judice before the Hon'ble Apex Court.

It was also submitted that the petitioner

is not entitled to pension as claim of

refund made by the petitioner is beyond

the period of limitation.

26. Having heard the learned advocates for

the respective parties and considering the

facts of the case, it is apparent that

petitions with similar facts have already

been entertained by Hon'ble Delhi High

Court, Hon'ble Madhya Pradesh High Court

and Hon'ble Punjab & Haryana High Court

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

and SLP against the decision of Hon'ble

Punjab and Haryana High Court has also

been dismissed by the Hon'ble Apex Court.

Hon'ble Punjab & Haryana High Court in

case of Col. Jaswinder Pal Singh (supra)

while considering similar issue has held

as under:

"6. Learned counsel for the petitioner has referred to the judgment of Delhi High Court in Mahavir Singh Narwal vs. Union of India and another, 2004 SCC OnLine Del 348. In that case, the Delhi High Court was examining Rule 173 of the Disability Pension applicable to armed forces in Low Medical Category are to be treated as "invalid" from service for the purpose of disability pension.

7. Keeping in view the aforesaid judgment, the Disability Pension Rules would be applicable in the case of the petitioner as well and Board's Circular No. 13/2019 dated 24.06.2019 (Annexure P-15) cannot be made applicable to deny the benefit to the petitioner who has been given disability pension. Moreover, the said circular has been challenged by the disabled soldiers in Hon'ble Supreme Court directing the parties to maintain status quo vide order dated

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

30.08.2019 (Annexure P-16). Pursuant thereto, the Principal Controller of Defence Accounts (Pensions) again issued Circular No. 210 dated 20.02.2020 (Annexure P-17) that such income tax exemption would not be admissible to the persons such as the petitioner. However, keeping in view the order dated 30.08.2019 passed by the Supreme Court, the Circular No. 210 dated 20.02.2020 (Annexure P-17) was subsequently withdrawn vide another Circular No. 211 dated 03.03.2020 (Annexure P-18).

8. Issuance of Circular No. 13/2019 dated 24.06.2019 (Annexure P-15), Supreme Court order dated 30.08.2019

dated 20.02.2020 (Annexure P-17) and Circular No. 211 dated 03.03.2020 ( Annexure P-18) are not disputed by the respondent in the reply.

9. It is a sad situation to see that ex-army person had to once again approach the authority vide letter dated 08.02.2021 (Annexure P-19) for sanction to file revised returns for the financial year 2009-10 to 2015-16 as the revised returns have been filed within 20 days of the receipt of the amount on implementation of the court's orders whereby he has been granted arrears of disability pension and filing the revised returns was within the time stipulated in CBDT Circular 2009/2015 (Annexure P-20). The petitioner again approached the

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

authority through CPGRAMS portal of Government of India vide grievance dated 22.11.2021 (Annexure P-21) and even this was rejected vide reply received on 27.02.2022 (Annexure P-

22). The relevant portion of the impugned order dated 21.01.2021 (Annexure P-13) is reproduced as under:-

"1. The submission of the applicant have been considered by the undersigned. In view of documents produced and explanations offered, it is found that the assessee retired on 30.11.2008 and the disability pension was sanctioned to him consequent to the order of the Hon'ble Armed Force Tribunal after his superannuation and he has not been invalided from service on account of bodily disability attributable to or aggravated by such service. Moreover, keeping in view of the facts and circumstances of the case and further clarification by the Board in Circular No. 13/2019 dated 24.06.2019, assessee's pension element and disability element of pension is not exempted from Income Tax. Therefore, the condonation of delay in filing the return of income for the A.Y. 2017-18 is hereby rejected."

10. Thereafter, corrigendum dated 01.12.2021 has been passed on

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

01.12.2021 (Annexure P-14) that the assessment years be read as A.Y. 2010- 11 to 2016-17 instead of A.Y. 2017-18 as mentioned in order dated 21.01.2021 (Annexure P-13). The impugned order dated 21.01.2021 (Annexure P-13) has been passed on the basis of Circular No. 13/2019 dated 24.06.2019 which is the subject matter of consideration before the Hon'ble Supreme Court and the Hon'ble Supreme Court vide order dated 30.08.2019 (Annexure R-1) directed the parties to maintain status quo.

11. The petitioner has also placed on record judgment passed by Madhya Pradesh High Court in W.P. No. 29017/2018 titled as Madan Gopal Singh Nagi vs. Commissioner of Income Tax II (2019) 419 ITR 413 (Annexure P-2) wherein the Madhya Pradesh High Court was examining the case of the tax on disability pension and reference was made to Circular dated 02.07.2001 whereby the Board after re-examining the issue decided to reiterate that entire disability pension i.e. "disability element" and "service element" of a disabled officer of the Indian Armed Forces continues to be exempted from income tax. The relevant portion of the said Circular is reproduced as under:-

"3. The matter has been re- examined in the Board and it has been decided to reiterate that the entire disability pension i.e. "disability element" and

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

"service element" of a disabled officer of the Indian Armed Forces continues to be exempt from income tax."

12. Keeping in view the above Circular, the above said writ petition i.e. W.P. No. 29017/2018 was allowed and the respondents were directed to refund the entire amount of income tax they had recovered, which was the exempted amount and which the petitioner had paid in respect of disability pension. The said judgment has attained finality.

13. The petitioner has further placed on record another judgment of Madhya Pradesh High Court passed in W.P. No. 8858/2019 titled as Colonel Ashwani Kumar Ram Singh (Retd.) vs. Principal Commissioner of Income Tax, decided on 29.08.2019 (Annexure P-3) wherein again by referring to the case of the Colonel Madan Gopal Singh Nagi (Annexure P-2), a direction was given to grant refund to the petitioner on the tax paid by him on the disability pension within a period of 60 days from the date of receipt of the certified copy of the order and the respondents were further given direction to pay interest in respect of the entire amount.

14. In the present case as well, no explanation has been given as to why as per the Circular dated 02.07.2001 as referred to in the case of Colonel Madan Gopal Singh Nagi (Annexure P-2),

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

once the disability pension was exempted from income tax then why this benefit has not been given to the petitioner. More so, the Board's Circular No. 13/2019 dated 24.06.2019 has been challenged by the disabled soldiers which has been stayed by the Hon'ble Supreme Court by passing the following order on 30.08.2019:-

"Learned advocate for the respondents prays for and is granted three weeks' time to file affidavit in reply. Rejoinder, if any, be filed within a week thereafter.

Pending further consideration, the parties shall maintain status quo in the matter.

List on 18.10.2019."

15. Since the parties were directed to maintain status quo, which means that no recovery of income tax could be effected from the Army officer. Another aspect which required to be considered is that the Delhi High Court in Mahavir Singh Narwal vs. Union of India and another, 2004 SCC OnLine Del 348 has already examined Rule 173 of the Disability Pension which has not been amended till date. The relevant portion of that judgment is reproduced hereunder:-

"6. On careful perusal of the aforesaid rule it is manifestly clear that invalidated from service is necessary condition for grant of disability

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

pension. What has to be seen for entitlement for disability pension is whether an individual at the time of his release was in a low medical category than that in which he was recruited if it was so then such person will be treated as invalidated from service. It is the admitted case of the parties that at the time of recruitment the petitioner did not have any disability. It is also admitted case of the parties that the petitioner got disability on account of stress and strain of military service and his category was initially lower down temporary to CEE on 21st September, 1978 for a period of 6 months and after the Release Medical Board examined the petitioner on 11th April, 1979, it found the disability to be 30% aggravated by stress of military service and he was down graded to permanent low medical category. Once the petitioner was in low medical category according to Rules 1 and 2 of Appendix II of Pension Regulations 173 he shall be treated as invalidated from service. It seems that on careful consideration of the Pension Regulations 173, read with Rules 1 and 2 of Appendix II, the respondents themselves

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

have recommended for grant of disability pension to the petitioner vide their letters dated 3rd April, 1986 and subsequently on 11th April, 1986 which is as under:-

DISABILITY PENSION CLAIM: EX- NO. 3157896 SEP MAHAVIR SINGH NARWAL.

1. Further to this Headquarters letter of even number dated 03 Apr 86.

2. The disability pension claim in respect of Ex No. 3157896 Sep Mahavir Singh Narwal has been re-examined threadbare by the competent authority. During the course of examination it is seen that the individual was placed in temporary low medical category "CEE" for six months with effect from 21 Sep

78.Having been placed in low medical category he had applied for discharge on compassionate grounds on 19 Feb 79.

3. He was discharged from service on 24 Apr. 79 after completion of all the medical formalities which are applicable in case of disposal of permanent low medical category personnel.

4. It has been opined by the competent authority that his discharge from service cannot be legally termed as of "on compassionate grounds at his

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

own request". But it should be considered as disposal of low medical category personnel because of non availability of suitable sheltered appointment for him. Therefore the cause and clause of his discharge from service requires change to facilitate him to get disability pensionary benefits.

5. In view of foregoing, necessary action may therefore be taken to change the cause and clause of discharge and to initiate disability pension papers immediately. Actions taken by intimated to this Headquarters latest by 30 Apr. 86 and later a monthly progress report by 5th of each month by submitted till finalisation of his disability pension cause.

6. All previous letters issued on the subject will be treated as cancelled.

SD/- (P.N. Reddy) Varishth Civilian Staff Adhikari/SCS Shayak Adjutent General/AAG PS4 for Adjutant General.

7. The arguments advanced by the learned counsel for the respondents that these letters were not issued by the competent authority is not of

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

any relevance for grant of disability pension. What is relevant is whether the mandate of Pension Regulation 173 read with Rules 1 and 2 of Appendix II has been taken into consideration or not. Merely because a person has attained discharge on compassionate ground although his disability has been acquired on account of stress and strain of military service will not be a ground to reject the claim of disability pension, it has been invalidated act in terms of Appendix II of Rule 173. We allow the writ petition and direct the respondent to grant disability pension to the petitioner on the basis of assessment of 30% disability as opined by the Release Medical Board in the year 1979 upto date. For future disability pension the respondent may conduct another medical board to assess the percentage of disability of the petitioner. Arrears of disability pension be paid to the petitioner within a period of 8 weeks. If the same are not paid within 8 weeks the petitioner shall be entitled to the interest at the rate of 9% on the amount of arrears. With these directions the writ petition is allowed."

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

16. Keeping in view the above, this writ petition is allowed and the amount of income tax paid by the petitioner for the relevant years be refunded to him alongwith interest @ 9% p.a. within a period of one month from the date of receipt of certified copy of this order alongwith costs of Rs.1 lac. Thereafter, compliance report of the order be sent to this Court by the concerned authority."

27. Hon'ble Madhya Pradesh High Court in

case of Colonel Ashwani Kumar Ram Singh

(supra) has considered the Circular dated

09.06.2015, more particularly, para nos. 3

and 6 of the Circular which empowers the

CBDT to condone the delay.

28. It appears that the respondent

authority without considering the facts of

the case has mechanically applied its mind

while passing the order under section

119(2)(b) of the Act observing as under:

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

"4. In light of relevant provisions of the Act and CBDT Circular referred supra, facts of assessee's case are examined It is observed that assessee has retired from defence service in May 2000 and was assessed by a medical board to be eligible for disability pension. The final approval letter of disability case was issued by PCDA Authorities in October 2018 However, assessee filed application for condonation of delay u/s. 119(2)(b) of the Income Tax Act, 1961 for A. Y 2007-08 to A.Y 2018-19 on 20.09.2022 As per the Para 3 of the above referred circular the period of A.Ys. 2007-08 to 2015-

16, falls under category of more than six years after the end of relevant assessment year, the same cannot be entertained in view of circular no. 09/2015 dated 09.06.2015

5. Considering the elaborate facts discussed herein above, considering CBDT Circular No 9/2015 referred supra, claim of assessee for condonation of delay cannot be granted in this case Therefore, the application of the assessee for condonation of delay to filing return of income for A.Ys. 2007-08 to 2015-16 is hereby rejected being beyond six years from the end of relevant

NEUTRAL CITATION

C/SCA/8993/2024 CAV JUDGMENT DATED: 13/11/2025

undefined

assessment year and such application is disposed off."

29. From the above observations made in

the impugned order, it is clear that

respondent no.1 has not at all considered

the facts of the case and the impugned

order is passed only referring to Circular

No. 9/2015 which would not be applicable.

In the facts of the case, when it is not

in dispute that disability pension