The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) ruled that an HRA exemption claim cannot be arbitrarily disallowed by the Assessing Officer when it is supported by valid documentary evidence.
The Tribunal observed that when a taxpayer submits a valid rent agreement, rent receipts, and Form 16, the tax authorities must properly examine the evidence on record rather than reject the claim based on assumptions or without adequate verification.
The taxpayer, Sumit Maloo, asserted exemption of Rs 2.54 lakh u/s 10(13A) against rent of Rs 2.91 lakh paid during the year. He said that he was residing in rented premises in Mumbai for employment.
The exemption has not been permitted by the assessing officer, and the CIT(A) verified the disallowance.
The representative of the taxpayer said that a rent note, rent receipts that have the landlord’s details and PAN, and Form 16 issued by the employer had already been provided. The Form 16 exhibited that the employer had permitted the exemption of Rs 2.54 lakh u/s 10(13A).
The orders of the lower authorities have been supported by the revenue counsel.
The two-member bench, Annapurna Gupta (Accountant Member) and Kuldip Singh (Judicial Member) said that, “So far as disallowing of exemption claimed by the assessee u/s 10(13A) of the Act to the tune of Rs. 2,54,000/- being amount paid by the assessee on account of rent of Rs. 2,91,000/- is concerned, the assessee has duly furnished rent note, rent receipt bearing name and address of PAN of the landlord available at page 10, 21 to 24 along with form 16 issued by the employer, wherein employer allowed deduction of Rs. 2,54,000/- u/s 10(13A) of the Act on account of rent payment.”
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The tribunal added that, “All these documents relied upon the assessee are self speaking but AO as well as Ld. CIT(A) has not discussed these documents rather arbitrarily disallowed the amount. We are of the considered view that this deduction is admissible to the assessee, however subject to verification by the AO.”
The tribunal deemed the HRA exemption valid, conditional on AO verification. The HRA issue was one among several disputed deductions addressed in the appeal, which was partly granted.
| Case Title | Sumit Maloo vs. ITO |
| Case No. | ITA No: 752/JPR/2026, Assessment Year: 2019-20 |
| Assessee Represented | Sh. Yogesh Parwal |
| Revenue Represented | Mrs. Arti R |
| Jaipur ITAT | Read Order |
