Retired govt employee claims Rs 20 lakh gratuity tax exemption; I-T Dept imposes Rs 2.2 lakh penalty; ITAT Cochin rules in her favour

A retired state employee successfully challenged a Rs 2.2 lakh penalty imposed for claiming a higher gratuity tax exemption. The Income Tax Appellate Tribunal ruled that the employee's claim, though incorrect, was based on a bona fide belief and all facts were disclosed. The tribunal deleted the penalty, citing no misreporting of income and extending immunity benefits.