I don't know anywhere it is officially permitted for passengers, but anecdotally it still happens in some countries.

http://liveandletsfly.boardingarea.com/2016/07/27/smoking-on...

In practice Air India seems to allow it, especially on the older jets and longer flights. Unusally long lines immediately form at toilets and don't seem to subside throughout a several hour flight. The smell of cigarette smoke is attended to regularly with a good old spray of air freshener.