PIYUSHKUMAR MANEKLAL PARMAR,AHMEDABAD vs. ITO, WARD 7(2)(1), AHMEDABAD, AHMEDABAD

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 836/Ahd/2026 (िनधा�रण वष� / Assessment Year : 2021-22) बनाम Prashantkumar Kantilal ITO / Ward-7(2)(1), Parikh Vs. A-501, Arjun Exoica, B/H Ahmedabad Arjun Tower, B/S Payal Party Plot, Ghatlodia S.O., Ahmedabad, Gujarat - 380061 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ABUPP3143L (Appellant) .. (Respondent) & आयकर अपील सं./I.T.A. Nos. 810 & 811/Ahd/2026 (िनधा�रण वष� / Assessment Years : 2020-21 & 2021-22) Bharatkumar Natvarlal बनाम ITO / Patel Ward-1, Vs. 17, Sai Bunglows, Visnagar Patan Chowkdi, Unjha, Mahesana, Unjha Umiya Mataji S.O, Unjha, Gujarat - 384170 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ACDPP6724D (Appellant) .. (Respondent) & आयकर अपील सं./I.T.A. Nos. 793 & 794/Ahd/2026 (िनधा�रण वष� / Assessment Years : 2020-21 & 2021-22) बनाम Piyushkumar Maneklal ITO / Parmar Ward-7(2)(1), Vs.

ITA No.836 Ahd 2026 & 4 Ors. [ Prashantkumar Kantilal Parikh & Ors.] - 2 – B-208, Poojan Appartment, Ahmedabad Behind Swaminarayan Templ, Nr. Shyam Shikhar Complex, Ahmedabad City, Ahmedabad, Bapunagar S.O., Ahmedabad, Gujarat - 380024 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ADZPP3300J (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Vipul Gohil, A.R. ��यथ� क� ओर से/Respondent by : Shri Amit Pratap Singh, Sr. DR Date of Hearing 23/07/2026 Date of Pronouncement 30/07/2026 (आदेश)/ORDER The captioned five appeals have been filed by three different assessees against the separate orders of the Ld. Commissioner of Income Tax (Appeals) (hereinafter referred to as “CIT(A)”) relate to different Assessment Years (A.Y.). Since, the facts and issues involved in all appeals are identical, hence, the captioned appeals were heard together and are being disposed of by this common order.

ITA No.836/Ahd/2026

ITA No.836 Ahd 2026 & 4 Ors. [ Prashantkumar Kantilal Parikh & Ors.] - 3 – “1. The Ld. CIT(A) has erred in law and on facts in refusing to condone the delay in filing the appeal without appreciating that the delay occurred solely due to the Appellants bonafide ignorance regarding the availability of exemption under Section 10(10B) and lack of legal knowledge. These circumstances constitute a reasonable cause within the meaning of Section 249(3) of the Income-tax Act, 1961. The Ld. CIT(A) failed to apply the settled legal principles laid down by the Hon’ble Supreme Court in Collector, Land Acquisition vs. Katiji and N. Balakrishnan vs. M. Krishnamurthy, wherein it has been held that substantial justice must prevail over technicalities and that the length of delay is immaterial when the explanation is bona fide. 2. The Ld. CIT(A) has erred in holding that the Appellant is making a new claim, ignoring that appellate authorities have plenary powers to grant all legitimate reliefs, even if not claimed in the return, as mandated by CBDT Circular No. 14 of 1955 and upheld by various judicial precedents including decisions of the Hon’ble Supreme Court and High Courts. 3. The Ld. CIT(A) has erred in dismissing the appeal at the threshold without appreciating that the Appellants case is factually identical to Harish Kumar vs. ITO (ITA No. 42/CHD/2025), where compensation received under the same BSNL VRS-2019 was held fully exempt under Section 10(10B). The Ld. CIT(A) failed to adjudicate the merits despite the existence of a legitimate, legally sustainable, and directly applicable claim under Section 10(10B). 4. The Ld. CIT(A) has passed the impugned order without granting reasonable opportunity of hearing and without issuing statutory notice under Section 250 of the Act during appellate proceedings. The order is thus vitiated for breach of natural justice and is bad in law.” 4. The assessee was a salaried employee working with BSNL. The Government introduced a Voluntary Retirement Scheme (VRS), which the assessee opted for and was duly accepted by BSNL. It is submitted that the amount received under the scheme has been disclosed in the return of income, and due tax has been paid, despite the fact that the same was exempt from tax. It is further submitted that the VRS was meant for the retrenchment of senior/old-age employees who were unable to adapt to new technology. Accordingly, the assessee contended that the entire

ITA No.836 Ahd 2026 & 4 Ors. [ Prashantkumar Kantilal Parikh & Ors.] - 4 – amount of Rs.40,79,945/- received under the scheme was fully exempt from tax under the relevant provisions. The compensation amount received under the scheme was offered to tax in the return of income due to lack of awareness regarding the exemption available under section 10(10B) of the Income-tax Act, 1961. The employer had also deducted tax at source on the said amount. No exemption was claimed in the original or revised return of income. The CPC, Bengaluru issued an intimation under section 143(1) for the said year without granting any exemption, and no rectification or appeal was initiated at that time. It was only upon learning about the recent judgment of the Hon’ble ITAT Chandigarh Bench in the case of Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025, dated 30.05.2025) that the assessee became aware that the compensation received under the BSNL VRS-2019 scheme is eligible for exemption under section 10(10B), subject to compliance with Rule 2BA. The assessee, therefore, preferred appeal before the CIT(A) against the order of CPC and made the claim of exemption u/s 10(10B) for the first time. However, the Ld.CIT(A) dismissed the appeal of the assessee being barred by limitation and also refused to entertain new claim made for the first time before him.

ITA No.836 Ahd 2026 & 4 Ors. [ Prashantkumar Kantilal Parikh & Ors.] - 5 – received from the Central Government under a scheme approved by the Government. It was submitted that the said amount is fully exempt from tax under section 10(10B) of the Income-tax Act, 1961, and, therefore, the assessee is entitled to full tax exemption. The Ld. Counsel for the assessee further relied upon the following decisions of Coordinate Benches of the ITAT in support of the claim of exemption.

“1. ITA No. 42/Chd/2025 AY 2021-22 in the case of Harish Kumar V/s. ITO Chandigarh dated 30.05.2025. 2. ITA Nos.2387 & 2388/Ahd/2025 in the case Jayeshkumar Tulsidas Sutaria dated 17.02.2026 3. ITA No.2389 & 2390/Ahd/2014 in the case of Suman Nandlal Raval dated 18.02.2026

“4. Aggrieved by the orders of the Assessing Officer, the assessee carried the matter in appeal before the Ld.CIT(A), who dismissed the appeal of the assessee by observing as follows: "... The Appellant was employed with Bharat Sanchar Nigam Limited (BSNL), a Government of India enterprise. BSNL had notified the Voluntary Retirement Scheme (VRS) 2019 on 04.11.2019, which was duly approved and implemented by the employer. The Appellant opted for this scheme and accordingly received compensation under the VRS, as per the terms laid out by BSNL. The compensation amount received under the scheme

ITA No.836 Ahd 2026 & 4 Ors. [ Prashantkumar Kantilal Parikh & Ors.] - 6 – was offered to tax by the appellant in the return of income due to lack of awareness about the availability of exemption under Section 10(108) of the Income Tax Act. 1961. The employer had also deducted TDS on the said amount. No exemption was claimed in the original or revised return for the year by the appellant. The CPC, Bengaluru issued an intimation u/s 143(1) for the said year without granting any exemption, and no rectification or appeal was initiated at that time. The issue on this appeal pertains to exemption u/s 10(10B) of the Income Tax Act The appellant in his written submission has stated that it was only upon learning about the recent judgment of the Hon'ble ITAT Chandigarh, in the case of Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025, dated 30.05.2025), that the Appellant came to know that the compensation received under the BSNL VRS 2019 scheme is eligible for full exemption u/s. 10(10B), subject to Rule 2BA compliance. The grievance raised in the grounds of appeal does not emanate from the order appealed against. It is not a case where the appellant claimed exemption u/s.10(10B) and it was denied by the Assessing Officer. The appellant having omitted to claim relief in the return of income can claim the relief by filing the revised return. In cases where the time limit for filing the revised return has expired, the appellant may seek condonation of delay from the jurisdiction PCIT and then proceed with filing the revised return. The issue raised in grounds of appeal does not emanate from the order of intimation u/s.143(1), Hence, the appeal is dismissed..." 5. Aggrieved by the orders of the Ld.CIT(A, the assessee is in further appeal before us. 6. The Ld. Counsel for the assessee submitted that due to lack of awareness of the legal provisions at the time of filing the return of income, the assessee inadvertently offered the compensation received under BSNL VRS-2019 to tax. Subsequently, based on the decision of the Hon'ble ITAT Chandigarh Bench in Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025 dated 30.05.2025), wherein compensation under the same BSNL VRS-2019 scheme was held to be exempt under section 10(10B), the assessee now seeks exemption of such compensation. We find that the assessee filed the claim before the Ld. CIT(A) and since the income of the assessee is not taxable, the assessee is eligible for the refund of the TDS.

ITA No.836 Ahd 2026 & 4 Ors. [ Prashantkumar Kantilal Parikh & Ors.] - 7 – 7. In the result, both the appeals of the assessee are allowed.” 8. Since, there is no change in the legal proposition and the factual matrix of the case, respectfully following the decision of the Co-ordinate Bench, the issue raised by the assessee in the present appeal is decided in favour of the assessee. It is held that the assessee is entitled to exemption u/s 10(10B) of the Act upon entire amount of retrenchment compensation (though named as VRS Compensation) and leave encashment, if any. The AO is directed to accordingly give the relief to the assessee.

ITA Nos. 810, 811, 793 & 794/Ahd/2026

This Order pronounced on 30/07/2026

Sd/- (SANJAY GARG) JUDICIAL MEMBER Ahmedabad; Dated 30/07/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to :

ITA No.836 Ahd 2026 & 4 Ors. [ Prashantkumar Kantilal Parikh & Ors.] - 8 – अपीलाथ� / The Appellant 1. 2. ��यथ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, 5. ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad