SHAILESHKUMAR DWARIKAPRASAD YADAV,MEHSANA vs. ITO WD 1 PATAN, PATAN

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD

BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER

आयकर अपील सं./I.T.A. Nos. 902 & 903/Ahd/2026 (िनधा�रण वष� / Assessment Years : 2020-21 & 2021-22)

बनाम Shaileshkumar ITO / Dwarikaprasad Yadav Ward-1, Patan Vs. A1 Type 2, Ladwad Road, Mahesana H.O, Mahesana, Gujarat - 384001 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AACPY5098E (Appellant) .. (Respondent)

& आयकर अपील सं./I.T.A. No. 904/Ahd/2026 (िनधा�रण वष� / Assessment Year : 2024-25)

बनाम Surendrasinh Parbatsinh ITO / Ward-1, Mehsana Solanki Vs. 150 Lucky Park Society, Modhera Road, Mahesana I/E, Mahesana, Mahesana IES S.O, Mehsana, Gujarat - 384002 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AEOPS0464C (Appellant) .. (Respondent)

&

ITA No.902 to 906/Ahd/2026 . [Shaileshkumar D. Yadav & Ors.] - 2 – आयकर अपील सं./I.T.A. Nos. 905 & 906/Ahd/2026 (िनधा�रण वष� / Assessment Years : 2020-21 & 2021-22)

Surendra Hiraman Pal बनाम ITO / 102 A, Avdhut Row House Ward-1, Mehsana Vs. Society, Nr. Saibaba Temple, Sobhasan B.O, Rupal, Mahesana, Gujarat - 384001 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AHWPP9338D (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Vipul Gohil, A.R. ��यथ� क� ओर से/Respondent by : Shri Ashish K Pandey, Sr. DR

28/07/2026 Date of Hearing Date of Pronouncement 30/07/2026 (आदेश)/ORDER Per Sanjay Garg, Judicial Member:

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.902 to 906/Ahd/2026 . [Shaileshkumar D. Yadav & Ors.] - 3 – ITA No.904/Ahd/2026

“1. The learned CIT(A) has erred in law in holding that the claim of exemption under section 10(108) could not be entertained merely because it was not made in the original return of Income. The learned CIT(A) failed to appreciate that appellate authorities are fully empowered to entertain and adjudicate a fresh legal claim even if not raised in the return, as held by the Hon'ble Supreme Court in Jute Corporation of india Ltd. v. CIT and NTPC Ltd. v. CIT and by the Hon'ble Bombay High Court in CIT v. Pruthvi Brokers & Shareholders Pvt. Ltd... The reliance placed on Goetze (India) Ltd. v. CIT is misconceived, as the said judgment restricts only the powers of the Assessing Officer and does not curtail the jurisdiction of appellate authorities. The impugned order is therefore contrary to settled law and liable to be set aside. 2. The learned CIT(A) has erred in directing the appellant to approach the authority under section 119(2)(b) for condonation and filing of a fresh return. The said direction is legally untenable, as section 119(2)(b) pertains to administrative condonation by the Board and does not divest the CIT(A) of his statutory appellate powers under section 251 to adjudicate a lawful exemption claim on merits. The impugned direction amounts to abdication of jurisdiction and is liable to be quashed. 3. The learned CIT(A) has failed to consider and apply CBDT Circular No. 14 (XL-35) of 1955, which obligates tax authorities to grant legitimate reliefs even if not specifically claimed by the assessee. The refusal to consider a lawful exemption solely on technical grounds of non-claim in the return is contrary to binding administrative instructions and defeats the principles of equity and justice. 4. The learned CIT(A) has dismissed the appeal without adjudicating the substantive claim of exemption under section 10(108) on merits, thereby passing a non-speaking and legally unsustainable order. The impugned order is contrary to the scheme of the Act and violative of principles of natural justice and is therefore liable to be set aside. 5. The learned CIT(A) has erred in law and on facts in failing to appreciate that compensation received under the duly approved BSNL VRS-2019 scheme satisfies the conditions prescribed under Rule 28A and is eligible for exemption under section 10(108). The issue now stands consistently decided in favour of the assessee by coordinate benches of the Hon'ble ITAT in Jayeshkumar Tulsidas Sutaria v. ITO, Suman Nandlal Raval v. ITO and

ITA No.902 to 906/Ahd/2026 . [Shaileshkumar D. Yadav & Ors.] - 4 – Harish Kumar v. ITO, wherein BSNL VRS-2019 compensation has been held eligible for exemption under section 10(108). The impugned order, being contrary to consistent judicial precedent, deserves to be reversed.” 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 amount of Rs.23,96,705/- 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

ITA No.902 to 906/Ahd/2026 . [Shaileshkumar D. Yadav & Ors.] - 5 – 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.

“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

ITA No.902 to 906/Ahd/2026 . [Shaileshkumar D. Yadav & Ors.] - 6 – 7. We note that the issue under consideration is squarely covered by the above referred decisions of the Co-ordinate Benches of this Tribunal. The Co-ordinate Bench of this Tribunal in ITA Nos. 2387 & 2388/Ahd/2025 for AYs 2020-21 & 2021- 22 vide order dated 17.02.2026, has held as under:

“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 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

ITA No.902 to 906/Ahd/2026 . [Shaileshkumar D. Yadav & Ors.] - 7 – 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. 7. In the result, both the appeals of the assessee are allowed.”

ITA No.902 to 906/Ahd/2026 . [Shaileshkumar D. Yadav & Ors.] - 8 – ITA Nos. 902, 903, 905 & 906/Ahd/2026

This Order pronounced on 30/07/2026 Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30/07/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. 5. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,

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