PRATIBHA SANJAI SRIVASTAVA,AHMEDABAD vs. INCOME TAX OFFICER, WARD 7(2)(1), AHMEDABAD, AHMEDABAD

ITA 2565/AHD/2026Status: DisposedITAT Ahmedabad29 September 2026AY 2021-202210 pages
AI SummaryAllowed

What were the facts?

The assessee, Pratibha Sanjai Srivastava, is an individual who was retrenched from Bharat Sanchar Nigam Limited (BSNL) under a Government of India scheme. For Assessment Years 2020-21 and 2021-22, the assessee received an ex-gratia amount of Rs. 11,65,728/- from BSNL. Initially, the assessee treated this amount as taxable income and did not claim exemption under Section 10(10B) of the Income-tax Act, 1961, due to a lack of awareness of the relevant provisions. The assessee later sought exemption based on judicial pronouncements. The appeals were filed before the Ld. Addl./JCIT Commissioner of Income Tax(Appeal)-4, Chennai, who dismissed them on the grounds of delay without adjudicating on the merits. The assessee then filed appeals before the ITAT.

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) and proceeded to adjudicate the issue on merits. The Tribunal noted that the issue was covered by the decision of a co-ordinate bench in ITA No. 289/Ahd/2025 in the case of Goverdhan D Bhambhani Vs. ITO, and also referred to a CBDT Notification regarding Section 10(10AA) which was deemed to have come into force from April 1, 2023, stating no person is adversely affected. The Tribunal further relied on its own consolidated order dated 09.07.2026 in ITA No. 1273/Ahd/2026 in the case of Pravinkumar Ramibhai Patel Vs. ITO. The Tribunal held that the assessee is entitled to exemption under Section 10(10B) of the Act for the entire amount of retrenchment compensation (named as VRS compensation) and leave encashment, if any. The Assessing Officer was directed to grant the consequential relief. The Tribunal found no change in the factual matrix or legal position from the cited precedents. The appeals were allowed.

What were the issues?

1. Whether the Ld. CIT(A) erred in dismissing the assessee's appeal on the ground of limitation without condoning the delay and adjudicating on the merits, considering the delay was explained and supported by legal decisions. 2. Whether the ex-gratia payment of Rs. 11,65,728/- received by the assessee from BSNL under a retrenchment/VRS scheme is eligible for exemption under Section 10(10B) of the Income-tax Act, 1961. Assessee's Contentions: - The Ld. Counsel for the assessee argued that the delay in filing the appeal before the CIT(A) was due to lack of awareness and should have been condoned. The compensation received under the BSNL Voluntary Retirement Scheme, 2019, complies with Rule 2BA of the Income-tax Rules, 1962, and is therefore exempt under Section 10(10B). Reliance was placed on the ITAT Chandigarh Bench decision in Harish Kumar vs. ITO and other co-ordinate bench decisions. - The assessee contended that the ex-gratia payment is fully exempt under Section 10(10B) as it is in the nature of retrenchment compensation. - The assessee argued that no interest under Sections 234A, 234B, and 234C should be levied, and interest under Section 244A is eligible. - The taxable income should be computed after excluding the ex-gratia amount. Revenue's Contentions: - The Ld. Sr. D.R. supported the orders passed by the lower authorities and requested confirmation of the disallowance.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10AA),Section 234A,Section 234B,Section 234C,Section 244A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-

For Appellant: Shri Paras F Jain, AR
For Respondent: Ms Kalpana Singh, Sr. DR
Hearing: 23.09.2026Pronounced: 29.09.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

-

These two appeals have been filed by the assessee against the separate orders passed by the Ld. Addl./JCIT Commissioner of Income Tax(Appeal)-4, Chennai, both vide orders dated 06.07.2026. Since the issues involved in these two appeals are identical and common, we take the grounds of appeal raised in ITA No.2562/Ahd/2026 for A.Y 2020-21 for the purpose of adjudication and the decision rendered in the said appeal shall apply mutatis mutandis to ITA No.2565/Ahd/2026 for AY 2021-22. ITA Nos.2562 & 2565 /Ahd/2026 Asst. Years : (2020-21 & 2021-22) - 2–

2.

The assessee has raised the following grounds of appeal:

1.

The Ld. CIT(A) has grossly erred in

The order continues below.

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