" IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** 203 Date of Decision: 09.02.2026 1. CWP-23225-2010 AVINASH CHAND PURI AND ORS. ...Petitioners Versus STATE OF PUNJAB AND ORS. ...Respondents 2. CWP-571-2011 MUKESH CHANDER DIWAN AND ORS. ...Petitioners Versus PUNJAB SCHOOL EDUCATION BOARD AND ORS. ...Respondents CORAM:- HON'BLE MR. JUSTICE JAGMOHAN BANSAL HON'BLE MR. JUSTICE YASHVIR SINGH RATHOR Present:- Mr. Raj Kumar Garg, Advocate with Mr. Paramjit Kumar, Advocate for the petitioners Mr. Arun Jindal, Addl. A.G. Punjab Mr. Vaibhav Gupta, Advocate for Income Tax Department (in CWP-23225-2010) Mr. Ranjit Singh Kalra, Advocate with Ms. Mona Yadav, Advocate for respondent-PSEB *** JAGMOHAN BANSAL, J. (ORAL) 1. As common issues are involved in the captioned petitions, with the consent of both sides, the same are hereby disposed of by this common order. For the sake of brevity and convenience, facts are borrowed from CWP-23225-2010. Printed from counselvise.com DEEPAK BISSYAN 2026.02.10 10:55 I attest to the accuracy and integrity of this document CWP-23225-2010 and CWP-571-2011 -2- 2. The petitioners through instant petition under Articles 226/227 of the Constitution of India are seeking setting aside of order dated 10.12.2010 whereby petitioners were directed to deposit income tax on gratuity received over and above Rs.3.5 lakh. 3. The petitioners are retired employees of Punjab School Education Board (for short ‘PSEB’). They received gratuity on their superannuation. They were governed by Punjab School Education Board (Payment of Gratuity) Regulations, 1989 framed by respondent with respect to gratuity. In the said regulations, it was provided that Punjab Civil Service Rules would be applicable for the matters which are not covered by the aforesaid regulations. The petitioners were paid gratuity of Rs.3.5 lakh at the time of their retirement. The respondent adopted 5th Pay Commission report of State of Punjab and accordingly increased ceiling of gratuity from Rs.3.5 lakh to Rs.10 lakh. The enhancement took place w.e.f. 01.01.2006, resultantly employees who had retired on or after 01.01.2006 became eligible for enhanced amount. Central Government in exercise of powers conferred by Section 10(10)(iii) of Income Tax Act, 1961 issued notification dated 11.06.2010. As per said notification, exemption beyond Rs.3.5 lakh is available to employees who retired on or after 24.05.2010. In view of aforesaid notification, the respondent issued notices to petitioners. By said notices, the respondent asked the petitioners to deposit income tax on enhanced amount of gratuity. 4. By order dated 02.02.2026, the Income Tax Department was asked to clarify whether any proceeding with respect to TDS on differential amount of gratuity has been initiated against PSEB or demand has been Printed from counselvise.com DEEPAK BISSYAN 2026.02.10 10:55 I attest to the accuracy and integrity of this document CWP-23225-2010 and CWP-571-2011 -3- raised from petitioners. Mr. Gupta, learned counsel for the Income Tax Department submits that as per his instructions, the Department has no record with respect to TDS to be deducted prior to 2010. The Department has not raised any demand from petitioners. 5. Learned counsel for the petitioners submits that till date no recovery has been affected from the petitioners. 6. As Income Tax Department has neither raised demand from petitioners nor initiated proceedings against PSEB alleging short payment of TDS, this Court finds that petitions have become academic, thus, no findings are required to be recorded. 7. Disposed of. The petitioners would be at liberty to move an appropriate application, if cause survives. 8. Pending application(s), if any, also stands disposed of. (JAGMOHAN BANSAL) JUDGE (YASHVIR SINGH RATHOR) JUDGE February 09, 2026 Deepak DPA Whether Speaking/reasoned Yes/No Whether Reportable Yes/No Printed from counselvise.com DEEPAK BISSYAN 2026.02.10 10:55 I attest to the accuracy and integrity of this document "