While I was sending labels through SN story tags, the current labels(created while story is created) are being replaced. I see there is no limit to number of Labels in JIRA. So, What could be the issue? Can anyone help me out?
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I would guess that your "send" is telling Jira to replace labels rather than add them.
You'll need to change whatever it is that you are doing in a "send" such that it adds labels rather than replacing them (taking a guess at what your "send" is, it's probably just saying "change labels to <new labels>", which you should change to "get current labels, add some to the list, send the full list back to Jira")
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