KULKARNI JAGADISH,BALLARI vs. INCOME TAX OFFICE, BANGALORU

ITA 1642/PUN/2026Status: DisposedITAT Pune30 September 2026AY 2020-2110 pages
AI SummaryAllowed

What were the facts?

The assessee, an employee of Bharat Sanchar Nigam Limited (BSNL), opted for the BSNL Voluntary Retirement Scheme, 2019, and received ex-gratia compensation. The assessee claimed exemption under sections 10(10C) and 10(10AA) in their return of income. The CPC restricted the claim under section 10(10AA). The claim that the entire compensation was a capital receipt not liable to tax under section 10(10B) was made for the first time before the CIT(A). The CIT(A) dismissed the appeals for both assessment years (2020-21 and 2021-22) due to delay in filing, without adjudicating the merits. The assessee appealed to the ITAT. The assessee did not appear before the Tribunal, but filed written submissions. The Revenue supported the CIT(A)'s orders.

What did the Tribunal hold?

The Tribunal held that the Learned CIT(A) should have condoned the delay in filing the appeals, as substantial justice is more important than procedural delay, citing the Bombay High Court's decision in Vijay Vishin Meghani vs DCIT. The Tribunal noted that identical issues concerning BSNL employees' VRS compensation had been decided in favour of the assessee by the ITAT Pune Bench, which relied on decisions from other ITAT Benches and the Madras High Court. The Tribunal found that the compensation received under the BSNL VRS-2019 scheme falls under the provisions of section 10(10B) of the Act and not section 10(10C), and is in the nature of a capital receipt exempt from tax. The Tribunal also addressed the Revenue's contention regarding eligibility for section 10(10B) by referring to the Madras High Court's decision in CIT (TDS) vs. Hindustan Photo Film Workers Welfare Centre, which held that the benefit under section 10(10B) is applicable to all employees covered by the scheme. The impugned findings of the CIT(A) were set aside. The assessee was directed to place a revised computation of income before the respective Jurisdictional Assessing Officers claiming exemption under section 10(10B), after which the Revenue authorities would grant any entitled refund after due verification. The common issue raised in the grounds of appeal was allowed.

What were the issues?

1. Whether the amount received from BSNL on account of voluntary retirement through the BSNL Voluntary Retirement Scheme, 2019, is liable to tax? (Question of law) Assessee's contentions (as per written submissions and reliance on various ITAT and High Court decisions): The compensation received under the BSNL VRS-2019 scheme is eligible for exemption under section 10(10B) of the Income-tax Act, 1961, as it is in the nature of retrenchment compensation. The assessee relied on decisions from ITAT Benches (Chandigarh, Ahmedabad, Pune) and the Madras High Court in cases involving similar BSNL VRS schemes, arguing that such compensation is a capital receipt and exempt from tax. The assessee also contended that the delay in filing appeals before the CIT(A) should have been condoned, citing substantial justice over procedural delay and a Bombay High Court judgment. The assessee argued that the claim was made due to lack of awareness of legal provisions and that the compensation is not taxable. Revenue's contentions: The Revenue supported the orders of the CIT(A). The Revenue argued that the claim should have been made in a revised return as it was not made in the original return. The Revenue also contended that for amounts received under VRS, 2019, the assessee is only eligible for exemption to the extent of Rs. 5.00 lakh as provided under section 10(10C) of the Act.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 10(10AA),Section 250,Section 143(1),Section 249(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Respondent: Smt. Sonal L Sonkavde, Addl. CIT

PER BENCH : These two appeals filed by the assessee against the order of the Learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Nashik [Ld. Addl./JCIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AYs 2020-21 and 2021-22 on 27.03.2026. 2. None appeared on behalf of the assessee. We have heard Ld. DR and perused the records. Since common issues have been raised in both the appeals, we proceed to adjudicate these appeals by way of this consolidated order for the sake of convenience, both these appeals were heard together.

3.

The common issue raised in both the appeals is that whether the amount received from Bharat Sanchar Nigam Limited (BSNL) on account of the volu

The order continues below.

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