KANWALJIT SINGH,CHANDIGARH vs. INCOME TAX OFFICER, ITO WARD 5(5), CHANDIGARH/, AYKAR BHAWAN,CHANDIGARH

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ITA 342/CHANDI/2026Status: DisposedITAT Chandigarh29 July 2026AY 2020-2124 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the claim for exemption under Section 10(10B) was a fresh claim and not a mistake apparent from the record, thus beyond the scope of Section 154 rectification. The assessee also failed to establish they were a 'workman' as per the Industrial Disputes Act.

What were the facts?

The assessee claimed exemption under Section 10(10C) for leave encashment and ex-gratia from VRS. Later, the assessee sought rectification under Section 154 to claim exemption under Section 10(10B) for the VRS amount, arguing it was retrenchment compensation.

What were the issues?

Whether a claim for exemption under a different section of the IT Act, not originally claimed, can be entertained through a rectification application under Section 154. Whether the compensation received under BSNL VRS qualifies as retrenchment compensation under Section 10(10B).

Which sections of the Income-tax Act were involved?

Section 154,Section 10(10C),Section 10(10B),Section 143(1),Section 139(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, CHANDIGARH

Before: SHRI LALIET KUMAR

For Appellant: Shri Rohan for Shri Ajay Jain, CA
For Respondent: Shri Vivek Vardhan, Addl. CIT Sr.DR
Hearing: 27.07.2026Pronounced: 29.07.2026

In both the appeals, the assessee is in appeal before the Tribunal against the separate order of the Commissioner of Income Tax (Appeals) [in short ‘the ld. CIT (A)’] dated 24.12.2025 passed for assessment year 2020-21 and 2021-22 respectively. Since the facts and issues in both the appeals are similar, therefore, both the appeals were heard together and are being disposed of by this common order for the sake of convenience and brevity.

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 2

ITA No. 342/CHD/2026

2.

The brief facts of the case are that the assessee, an

individual, filed his return of income for Assessment Year 2020-21

on 28.11.2020 declaring a total income of ₹22,14,140 after

claiming exemption of ₹17,73,438 under section 10 of the Act. Out

of the said exemption, a sum of ₹12,73,438 was claimed under

section 10(10AA) towards leave encashment and ₹5,00,000 under

section 10(10C) in respect of ex gratia received from BSNL under

the VRS-2019 Scheme. The return was processed under section

143(1) on 11.12.2020, accepting the returned income. 2.1 Subsequently, on 25.08.2025, the assessee filed an application under section 154 seeking rectification of the intimation issued under section 143(1). It was contended that the employer had erroneously treated the compensation as voluntary retirement compensation and consequently allowed exemption only to the extent of ₹5,00,000 under section 10(10C). According to the assessee, the amount received from BSNL was, in substance, retrenchment compensation paid under a scheme approved by the Central Government and was fully exempt under the second proviso to section 10(10B). Reliance was placed upon various decisions of the Chandigarh Benches of the Tribunal, including Harish Kumar, Dayal Singh, Suresh Pal Chauhan, and other

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 3 judicial precedents, besides CBDT Circular No.14 of 1955. The assessee accordingly requested that the intimation under section 143(1) be rectified by granting exemption under section 10(10B).

3.

The Assessing Officer rejected the rectification application under section 154. The order was affirmed by the learned CIT(A), against which the assessee is in further appeal before the Tribunal.

4.

The Assessing Officer held that the claim raised by the assessee was beyond the limited scope of section 154. According to the Assessing Officer, the assessee had consciously claimed exemption of only ₹5,00,000 under section 10(10C) in the original return and had, for the first time in rectification proceedings, sought exemption under an altogether different provision, namely section 10(10B), for a higher amount of ₹14,78,999. Such a revised claim could not be regarded as a "mistake apparent from the record".

5.

The Assessing Officer observed that rectification under section 154 is confined to patent and obvious mistakes, such as arithmetical, clerical or apparent legal errors and cannot be invoked for entertaining a fresh claim or deciding debatable questions of law. He further held that adjudication of the assessee's claim under section 10(10B) would require examination of the nature of compensation and applicability of the statutory

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 4 provisions, which travelled beyond the jurisdiction conferred by section 154.

6.

Without prejudice to the above, the Assessing Officer also examined section 10(10B) and held that the compensation received by the assessee was under the BSNL Voluntary Retirement Scheme and not on account of retrenchment consequent upon closure of the undertaking or transfer of its ownership or management. Since BSNL had neither closed down nor transferred its undertaking, the Assessing Officer concluded that the second proviso to section 10(10B) was inapplicable and rejected the rectification application.

7.

The learned CIT(A) concurred with the Assessing Officer that the assessee had originally claimed exemption only under section 10(10C) and had never claimed exemption under section 10(10B) in the return of income or by filing a revised return. The claim under section 10(10B) was raised for the first time during rectification proceedings and therefore constituted a fresh claim which could not be entertained in proceedings under section 154.

8.

The learned CIT(A) observed that although several judicial precedents relied upon by the assessee had recognised the BSNL VRS compensation as eligible for exemption under section 10(10B), those cases were distinguishable because, in those matters, the assessees had claimed exemption under section 10(10B) and the

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 5 issue was adjudicated on merits. According to the learned CIT(A), the present controversy was not regarding the eligibility of the compensation but whether such a fresh exemption claim could be introduced through rectification proceedings.

9.

The learned CIT(A) further held that the assessee neither claimed the exemption in the original return nor filed a revised return under section 139(5). Relying upon the judgment of the Hon'ble Supreme Court in Goetze (India) Ltd. v. CIT (284 ITR 323), the learned CIT(A) held that the Assessing Officer had no jurisdiction to entertain a fresh claim otherwise than through a revised return. The learned CIT(A) accordingly upheld the rejection of the rectification application and dismissed the appeal.

10.

The learned Authorised Representative submitted that both the Assessing Officer and the learned CIT(A) misdirected themselves in treating the assessee's request as a fresh claim. It was argued that the assessee had already disclosed the entire receipt in the original return and had merely claimed exemption under an incorrect provision owing to the employer's erroneous computation and legal understanding. Therefore, no fresh factual claim was being introduced; only the correct legal provision applicable to an already disclosed receipt was being invoked.

11.

The learned AR submitted that the issue regarding the nature

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 6 of compensation received under the BSNL Revival Scheme is no longer res integra in view of the consistent decisions of the Chandigarh Benches of the Tribunal in Harish Kumar, Dayal Singh, Suresh Pal Chauhan, Rajeshwar Sharma, Sarabjit Singh and other connected matters, wherein such compensation has been held to be retrenchment compensation eligible for exemption under the second proviso to section 10(10B). It was further submitted that even the Department has accepted similar claims in rectification proceedings in other cases.

12.

It was further argued that the powers under section 154 extend to rectification of an intimation issued under section 143(1), and where all primary facts already exist on record and only the correct legal consequence is required to be drawn, the omission constitutes a mistake apparent from the record. Reliance was also placed upon CBDT Circular No.14 of 1955, Jute Corporation of India Ltd., National Thermal Power Co. Ltd., Anchor Pressings (P.) Ltd., Ramco International, and other judicial precedents to contend that legitimate relief cannot be denied merely because the assessee had failed to claim the same under the correct provision in the return.

13.

The ld. AR had also filed the written submission on 28.07.2026. The summary of the written submission is as under :

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 7 “Submissions of the Learned Authorised Representative (AR) for the Assessee a. The learned Authorised Representative (AR) submitted that the impugned appellate order deserves to be set aside as the learned Addl./JCIT(A) decided the appeal without affording an effective opportunity of hearing through video conferencing, thereby violating the principles of natural justice. It was contended that despite the assessee's request, no effective hearing was granted before deciding the appeal. b. On merits, the learned AR submitted that the assessee was a permanent employee of the Department of Telecommunications who stood absorbed in Bharat Sanchar Nigam Limited (BSNL) under Rule 37A of the CCS (Pension) Rules, 1972. During the relevant assessment years, the assessee opted for the BSNL Voluntary Retirement Scheme (VRS)-2019, which formed part of the revival package approved by the Union Cabinet for restructuring BSNL through reduction of employee strength with budgetary support from the Government of India. The compensation received by the assessee was, in substance, retrenchment compensation and not an ordinary voluntary retirement payment. c. The learned AR submitted that while filing the original return of income, the assessee inadvertently claimed exemption of ₹5,00,000 under section 10(10C), as reflected in Form No.16 issued by the employer, instead of claiming the benefit available under the second proviso to section 10(10B), under which the entire compensation received was eligible for exemption. The error was purely legal and bona fide, arising from quoting an incorrect

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 8 statutory provision, whereas all the primary facts relating to the receipt of compensation were fully disclosed in the return of income itself. d. It was further argued that the Assessing Officer erred in rejecting the rectification application under section 154 by holding that the issue did not constitute a mistake apparent from the record. According to the learned AR, once all material facts were already available on record and the claim involved only the application of the correct legal provision to admitted facts, the mistake was clearly rectifiable under section 154. Reliance was placed on the judgment of the Hon'ble Supreme Court in T.S. Balaram, ITO v. Volkart Brothers (82 ITR 50), the decision of the Hon'ble Punjab & Haryana High Court in PCIT v. Venus Remedies Ltd., the Hon'ble Delhi High Court in Pawan Kumar Aggarwal v. CIT and CIT v. Sam Global Securities Ltd., and the decision of the Kolkata Bench of the Tribunal in Justice Dilip Kumar Seth, wherein it has been held that a mistake arising from an incorrect legal claim, without introduction of new facts, is capable of rectification under section 154. e. The learned AR further submitted that the issue is no longer res integra and stands concluded by a series of decisions rendered by various Benches of the Tribunal in cases involving BSNL employees who had received compensation under the BSNL VRS-2019 Scheme. Particular reliance was placed upon the decisions of the Chandigarh Bench in Harish Kumar v. ITO, Dayal Singh v. ITO, Bijender Singh Dhankhar v. ITO, and Martin Ekka v. ITO, besides decisions of the Hyderabad, Chennai, Ahmedabad, Pune, Mumbai, Bangalore, Panaji and

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 9 Guwahati Benches, all of which have consistently held that the compensation received under the BSNL VRS-2019 Scheme is eligible for exemption under section 10(10B), notwithstanding the fact that exemption had either not been claimed or had been wrongly claimed under section 10(10C) in the original return. It was submitted that these decisions uniformly recognise the payment as retrenchment compensation or capital receipt arising on account of loss of employment and direct grant of exemption under section 10(10B). f. The learned AR also referred to the Office Memorandum dated 23.10.2019 recording the approval of the Union Cabinet for the revival package of BSNL and MTNL, highlighting that the scheme envisaged reduction of employee cost through a Government-approved retrenchment package financed through budgetary support. It was argued that the substance of the scheme clearly demonstrates that the payment was retrenchment compensation covered by section 10(10B), and not a conventional voluntary retirement benefit governed by section 10(10C). g. The learned AR further contended that even assuming the claim under section 10(10B) was not made in the original return, the appellate authorities possess ample jurisdiction to entertain an additional legal claim for determining the correct tax liability of the assessee. Reliance was placed upon the decisions of the Hon'ble Supreme Court in Jute Corporation of India Ltd. v. CIT, National Thermal Power Co. Ltd. v. CIT, and Wipro Finance Ltd. v. CIT, as well as the judgments of the Hon'ble Bombay High Court in Pruthvi Brokers &

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 10 Shareholders Pvt. Ltd., the Delhi High Court in Jai Parabolic Springs Ltd., and the CBDT Circular No.14(XL- 35) dated 11.04.1955, to contend that appellate authorities are duty-bound to grant lawful relief even if the claim was omitted or incorrectly made in the return of income. h. It was further argued that the decision of the Hon'ble Supreme Court in Goetze (India) Ltd. merely restricts the powers of the Assessing Officer and does not curtail the jurisdiction of the appellate authorities or the Tribunal to entertain a legal claim arising from the facts already on record. Since the assessee was not introducing any new factual material but merely seeking application of the correct statutory provision, the appellate authorities were fully empowered to grant the exemption. i. Lastly, the learned AR submitted that taxing an amount which is legally exempt merely because an incorrect provision was quoted in the return would amount to collection of tax without authority of law, contrary to Article 265 of the Constitution of India. It was, therefore, prayed that the compensation received by the assessee under the BSNL VRS-2019 Scheme be held to be exempt under section 10(10B), the orders of the lower authorities be set aside, and consequential relief, including refund of excess tax along with statutory interest, be directed to be granted in accordance with law. 14. The learned CIT-DR strongly supported the orders of the lower authorities. It was submitted that the return originally filed

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 11 by the assessee contained a conscious claim under section 10(10C), and the assessee, after expiry of the statutory period for filing a revised return, sought to substitute the original claim by invoking section 10(10B). Such substitution amounts to making an altogether new claim, which cannot be entertained in rectification proceedings under section 154.

15.

It was further contended that the jurisdiction under section 154 is extremely limited and is confined to correction of mistakes apparent from the record. Determining the applicability of section 10(10B), examining the BSNL Scheme, and adjudicating whether the compensation constitutes retrenchment compensation or voluntary retirement compensation involve substantial legal analysis and an appreciation of the facts. Such issues are clearly debatable and therefore fall outside the scope of section 154.

16.

The learned CIT-DR also submitted that the learned CIT(A) rightly relied upon the decision of the Hon'ble Supreme Court in Goetze (India) Ltd., holding that the Assessing Officer cannot entertain a fresh claim except through a revised return. It was accordingly submitted that the orders of the Assessing Officer as well as the learned CIT(A) deserve to be upheld.

17.

I have carefully considered the rival submissions, examined the orders of the authorities below and perused the material

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 12 available on record. The controversy before me is considerably narrower than the elaborate arguments advanced on behalf of both sides. The issue is not whether the compensation received by the assessee under the BSNL Revival Scheme is, on merits, exempt under section 10(10B) of the Act. Neither am I required to examine the correctness of the various decisions rendered subsequently by different Benches of the Tribunal on the taxability of such compensation.

18.

The sole question arising for our consideration is whether, in the facts of the present case, the assessee could invoke the rectificatory jurisdiction under section 154 for substituting the exemption originally claimed under section 10(10C) with an altogether different claim under section 10(10B).

19 . The material facts are undisputed. The assessee, while filing the original return of income on 28.11.2020, disclosed the entire amount of ex-gratia compensation received from BSNL. Out of the total compensation, exemption of ₹5,00,000 was consciously claimed under section 10(10C), and the balance amount of ₹9,78,999 was voluntarily offered to tax. The return was processed under section 143(1) exactly in the manner in which it was furnished by the assessee, and no adjustment whatsoever was made by the Central Processing Centre. Nearly five years thereafter, the assessee filed an application under section 154,

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 13 contending that the compensation was, in fact, exempt under the second proviso to section 10(10B) and, consequently, sought the withdrawal of the income voluntarily offered to tax in the original return.

20.

The first and foremost question, therefore, is whether an assessee who has consciously made a particular claim in the return of income can subsequently invoke section 154 to substitute the original claim by another statutory claim on the ground that the earlier claim was made under an erroneous understanding of law.

21.

In my considered opinion, the answer has necessarily to be in the negative. Section 154 confers a limited power of rectification. It does not confer a power of review. The jurisdiction can be exercised only where there exists a mistake apparent from the record, namely, a mistake which is patent, obvious and self- evident and whose correction does not require a long-drawn process of reasoning or re-examination of the issues. The provision is intended to correct manifest errors in the order or intimation passed by the authority; it is not intended to permit either the Revenue or the assessee to revisit a concluded matter merely because a different legal view subsequently appears to be more favourable.

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 14 22. The scheme of the Act itself reinforces this distinction. Section 139(5) specifically provides the statutory mechanism for correcting an omission or a wrong statement in the return of income by filing a revised return within the prescribed time. The Legislature has, therefore, consciously created a separate remedy where the assessee discovers that the original return does not correctly reflect the legal or factual position. Once the statutory period for filing the revised return expires, the return attains finality subject only to proceedings specifically authorised under the Act. Section 154 cannot be employed as a substitute for the remedy provided under section 139(5), for otherwise the statutory limitation prescribed for revising the return would become wholly redundant.

23.

Equally important is the nature of an intimation issued under section 143(1). Such an intimation merely processes the return furnished by the assessee and makes only those adjustments which are expressly permissible under clauses (i) to (vi) of section 143(1)(a). Where an assessee voluntarily offers a receipt to tax, the CPC merely accepts the return as filed. No adjudication is undertaken regarding the correctness of the claim except to the limited extent authorised by the statute. Consequently, if the alleged mistake originates in the return itself, it cannot be said that the intimation under section 143(1) contains

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 15 any apparent mistake requiring rectification. What the assessee seeks in the present case is not correction of an error committed by the processing authority, but alteration of the very return furnished by him. Such an exercise falls outside the scope of section 154.

24.

I am also unable to accept the submission that the present case merely involves quoting a wrong statutory provision. The original return reflected a conscious claim under section 10(10C) and simultaneously offered the balance compensation to tax. By the rectification application, the assessee seeks not merely the correction of a provision number, but the substitution of the entire legal foundation of the claim, resulting in the withdrawal of income voluntarily offered to tax. Such substitution necessarily requires examination of the true nature of the compensation, interpretation of the BSNL Revival Scheme, applicability of section 10(10B), consideration of judicial precedents and determination of the legal character of the receipt. These are matters requiring adjudication and cannot be characterised as patent or as a self-evident mistake apparent from the record.

25.

The learned Authorised Representative has placed considerable reliance upon various decisions of the Chandigarh Bench and other Benches of the Tribunal holding that compensation received under the BSNL Revival Scheme is exempt

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 16 under section 10(10B). Even assuming those decisions correctly declare the legal position, the jurisdiction under section 154 must be examined independently. The existence of a favourable judicial precedent on the merits of the exemption does not by itself answer the anterior jurisdictional question whether such a claim could be entertained in rectification proceedings after the assessee had consciously adopted a different statutory provision in the original return.

26.

I also find substance in the reasoning adopted by the authorities below that acceptance of the assessee's contention would virtually obliterate the distinction maintained by the Legislature between a revised return, rectification proceedings and appellate proceedings. Every assessee who subsequently discovers a more beneficial interpretation of law would seek to reopen a completed intimation under section 143(1) by invoking section 154. Equally, whenever a subsequent judicial pronouncement favours the Revenue, the Department would also be entitled to reopen completed proceedings through rectification. Such an interpretation would destroy the principle of finality which underlies every fiscal statute and would convert the limited jurisdiction under section 154 into a general power of review, a consequence which the Legislature has consciously avoided.

27.

The appellate decisions relied upon by the assessee,

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 17 permitting additional legal claims before appellate authorities, also do not advance the assessee's case. The powers of the Commissioner (Appeals) and the Tribunal under sections 250 and 254 are substantially wider than the limited rectificatory jurisdiction conferred under section 154. The decisions in Jute Corporation of India Ltd., National Thermal Power Co. Ltd., Pruthvi Brokers & Shareholders Pvt. Ltd., and similar authorities recognise the wide appellate powers to determine the correct tax liability. They do not dilute the statutory limitations governing proceedings under section 154. Likewise, the decision in Goetze (India) Ltd. only concerns the powers of the Assessing Officer in assessment proceedings and neither enlarges nor restricts the independent jurisdiction exercisable under section 154. I am therefore of the considered view that the present application under section 154 is, in substance, an attempt to substitute the original claim consciously made in the return of income by another claim founded upon a different legal basis after expiry of the period prescribed for filing a revised return. Such substitution is in the nature of a review, not a rectification. Since no mistake apparent from the record exists in the intimation issued under section 143(1), the essential jurisdictional condition for invoking section 154 is absent.

28.

Now I will deal with the decisions relied upon by the Ld.AR of

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 18 the Hon'ble Delhi High Court in Pawan Kumar Aggarwal v. CIT, Sam Global Securities Ltd., and the judgment of the Hon'ble Punjab & Haryana High Court in PCIT v. Venus Remedies Ltd., to contend that the Assessing Officer ought to have exercised the jurisdiction under section 154 of the Act and granted the exemption claimed by the assessee.

29.

I have carefully examined the ratio laid down in the aforesaid judgments. In my considered view, none of the decisions advances the case of the assessee in the peculiar facts obtaining in the present appeal. The controversy involved herein is materially distinguishable from the issues considered by the Hon'ble High Courts in the aforesaid cases.

30.

In the present case, the assessee, while filing the original return of income, consciously claimed exemption under section 10(10C) of the Act in respect of the ex-gratia amount received under the BSNL Voluntary Retirement Scheme approved by the Department of Telecommunications vide Scheme dated 29.10.2019. The return was accordingly processed under section 143(1) on the basis of the claim so made by the assessee himself. Subsequently, by invoking the provisions of section 154, the assessee sought to substitute the very statutory provision under which exemption had originally been claimed by contending that the correct provision applicable was section 10(10B) of the Act and

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 19 not section 10(10C).

31.

Without expressing any opinion on the ultimate merits of the claim under section 10(10B), I find that the judgments relied upon by the learned Authorised Representative were rendered in altogether different factual and legal contexts. In those cases, the issue related to grant of a statutory exemption or deduction which had either not been claimed or had been omitted on account of an inadvertent mistake, and the appellate authorities were held competent to examine such claims so as to determine the correct tax liability of the assessee. The Hon'ble High Courts, relying upon the decisions of the Hon'ble Supreme Court, observed that the Revenue should not derive an undue advantage from the ignorance or inadvertence of the assessee and that the appellate authorities possess wide powers to consider such claims on merits.

32.

However, the present controversy does not arise in appellate proceedings exercising plenary powers. Rather, it arises in proceedings under section 154, the scope whereof is extremely limited and confined to rectification of a mistake apparent from the record. The assessee is not merely seeking enhancement of the exemption already claimed but seeks substitution of one statutory provision by another. The applicability of section 10(10B) in place of section 10(10C) necessarily requires examination of the

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 20 statutory scheme, the nature of compensation received, the legal character of the payment and the fulfilment of the conditions prescribed under section 10(10B). Such an exercise, in my considered view, clearly travels beyond the limited jurisdiction conferred under section 154.

33.

It is also pertinent to notice that before the authorities below, it was never the case of the assessee that the Assessing Officer had committed any apparent mistake while processing the return under section 143(1). Rather, the foundation of the rectification application was that the claim originally made by the assessee under section 10(10C) ought to have been made under section 10(10B), particularly in view of the subsequent judicial pronouncements rendered by the Chandigarh Benches of the Tribunal. Thus, the alleged error does not emanate from the intimation issued under section 143(1), but from the manner in which the assessee himself structured the claim in the original return of income. Such a grievance, in my opinion, falls outside the four corners of section 154, which is intended to rectify mistakes apparent from the record and not to review or substitute claims consciously made by an assessee in the return of income.

34.

The learned Authorised Representative has also placed reliance upon the judgment of the Hon'ble Punjab & Haryana High

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 21 Court in PCIT v. Venus Remedies Ltd. I have carefully gone through the said judgment. In that case, the assessee had filed its return declaring income under the normal provisions as well as book profit under section 115JB. During scrutiny assessment, the returned income was accepted. Thereafter, the assessee moved an application under section 154 pointing out that a revenue expenditure had inadvertently not been claimed, although all the relevant facts and material were already available on record. The Hon'ble High Court held that the omission had occurred on account of an incorrect application of law to admitted facts already forming part of the assessment record and, therefore, the rectification application was maintainable.

35.

The factual matrix before me is entirely different. Here, the dispute is not confined to an arithmetical omission or an incorrect application of an undisputed statutory provision. The controversy is whether the compensation received by the assessee falls within section 10(10B) or section 10(10C). Determination of this issue necessarily requires examination of the nature of the scheme, the legal status of the employee, the conditions prescribed under the Industrial Disputes Act, 1947 and the statutory requirements incorporated in section 10(10B). Such issues cannot be characterised as mistakes apparent from the record. Consequently, the ratio of Venus Remedies Ltd. does not govern

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 22 the controversy before me.

36.

The remaining judgments relied upon by the learned Authorised Representative relate principally to the substantive entitlement of employees receiving compensation under the BSNL Voluntary Retirement Scheme to exemption under section 10(10B). I consciously refrain from expressing any opinion on the correctness of those decisions because the present appeal does not require adjudication of the substantive entitlement under section 10(10B). The issue before me is confined to the jurisdictional question whether such a claim could have been entertained in proceedings under section 154.

37.

Even otherwise, the applicability of section 10(10B) cannot be examined in the abstract. The provision specifically contemplates compensation received by a "workman" within the meaning assigned under the Industrial Disputes Act, 1947. The expressions "employer" and "workman" occurring in the Explanation to section 10(10B) derive their meaning from the Industrial Disputes Act itself. Therefore, before any exemption under section 10(10B) can be granted, it is imperative to establish, on the basis of relevant facts and evidence, that the assessee satisfies the statutory definition of a "workman" and that the compensation received is in the nature of retrenchment

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 23 compensation as contemplated by the said provision.

38.

In the present case, I find that neither before the Assessing Officer nor before the learned CIT(A) was any material placed on record to establish that the assessee was a "workman" within the meaning of the Industrial Disputes Act. During the course of hearing also, the learned Authorised Representative was specifically called upon to demonstrate how the assessee satisfied the statutory definition of a "workman". Although elaborate written submissions were filed, no material was produced to establish the said foundational requirement. On the contrary, the documents placed on record, including the salary particulars and compensation details, prima facie indicate that the assessee was drawing emoluments substantially higher than the wage ceiling prescribed under the Industrial Disputes Act, as applicable during the relevant period. I hasten to clarify that this is only a prima facie observation confined to the present proceedings. Since the appeal itself fails on the jurisdictional issue relating to the scope of section 154, I refrain from recording any final finding on the assessee's substantive entitlement under section 10(10B), leaving that issue open to be examined in appropriate proceedings, if otherwise permissible in law. 39. Accordingly, I hold that the authorities below were justified in concluding that the claim raised by the assessee did not

ITA No.342 & 343/CHD/2026 A.Y.2020-21 & 2021-22 24 constitute a mistake apparent from the record capable of rectification under section 154 of the Act. Therefore, the orders passed by the Assessing Officer and affirmed by the learned CIT(A) do not call for any interference.

40.

I, accordingly hold that the Assessing Officer rightly

declined to entertain the assessee's application under section 154

and the learned CIT(A) committed no error in affirming the same.

The appeal is, therefore, dismissed.

41.

In the result, the appeals of the assessee are dismissed

Order pronounced on 29th July,2026.

Sd/-

(LALIET KUMAR) JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

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