KANNAN NIRMALA,BANGALORE vs. ITO WARD (3)(3)1 BANGALORE, BANGALORE

ITA 2513/BANG/2026Status: DisposedITAT Bangalore07 August 2026AY 2020-2112 pages
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What were the facts?

Assessees, employees of BSNL, opted for VRS and received retrenchment compensation and leave encashment. They initially offered part of the compensation as taxable income and claimed limited exemption for leave encashment. Later, they sought exemption under Sections 10(10B) and 10(10AA) respectively, but their appeals were dismissed by the CIT(A) on grounds of limitation and maintainability.

What did the Tribunal hold?

The Tribunal held that the CIT(A) ought to have condoned the delays and entertained the appeals on merits. It further ruled that the retrenchment compensation is eligible for exemption under Section 10(10B) and the entire leave encashment is eligible for exemption under Section 10(10AA), following various coordinate bench decisions.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeals on grounds of limitation and maintainability, and whether the assessees are entitled to exemptions for retrenchment compensation and leave encashment.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10AA)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE

BEFORE SHRI BALAKRISHNAN S., ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

Assessment Appeal No. Appellant Respondent Year

Ravichandra, The Income Tax 1206, 3rd Main, 6th Cross, 2021-22 ITA Nos. 811 & Officer, Vivekananda Nagara, & 812/Bang/2026 Ward – 1(1), Mysore – 570 023. 2020-21 Mysore. PAN: AEIPR9766C

Kannan Nirmala, 305, Ankshu Maple 2nd Main, The Income Tax Bethel Nagar, ITA Nos. 2513 & Officer, 2020-21 & KR Puram, 2514/Bang/2026 Ward – 3(3)(1), 2021-22 Devasandra, Bangalore. Bengaluru – 560 036. PAN: ABKPN5140K

Ravinaik Thumati, Neelakanteshwara Nilaya, The Income Tax 2020-21 ITA Nos. 1965 & Kalasapur Road, Officer, & 1979/Bang/2026 Gadag, Gadag H.O., 582 101, Ward – 1, 2021-22 Karnataka. Koppal. PAN: ADJPT1173F

Rangenahally Kenchappa Rangaswamy, The Income Tax Anurgha, ITA No. Officer, Sampige Main Road, 2020-21 2244/Bang/2026 Ward – 1, Sarswathipuram, Tumakuru. Tumkur – 572 105. PAN: AHIPR9825M ITA Nos. 811/Bang/2026 & Others

Shri K. Sheshadri, CA (for ITA Nos. 1965, 1979/Bang/2026) Shri H. Shambhu Sharma, CA Assessee by : (for ITA Nos. 2244, 2513 & 2514/Bang/2026) Shri Madhusu

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