VILAS SHANKAR KHOT,MUMBAI vs. ITO, WARD 1(1), KOLHAPUR, KOLHAPUR

ITA 3243/PUN/2026Status: DisposedITAT Pune25 September 2026AY 2020-202113 pages
AI SummaryAllowed

What were the facts?

The appeals by various assessees (ex-employees of BSNL) are against orders of the Addl./JCIT(A) for Assessment Years 2020-21 and 2021-22. The assessees received compensation under the BSNL Voluntary Retirement Scheme – 2019 (BSNL VRS-2019). Initially, they offered the compensation to tax after claiming an exemption of Rs. 5,00,000/- under Section 10(10C) of the Income Tax Act, 1961. Subsequently, before the Addl./JCIT(A), they raised a new claim that the entire compensation was a capital receipt, not liable to tax, and fully exempt under Section 10(10B) of the Act. The Addl./JCIT(A) dismissed some appeals on merits for entertaining new claims, others due to delay, and some on merits after condoning delay.

What did the Tribunal hold?

The Tribunal held that the compensation received under the BSNL VRS-2019 is in the nature of retrenchment compensation and falls under the provisions of Section 10(10B) of the Income Tax Act, 1961, making it a capital receipt exempt from tax. The Tribunal respectfully followed the decisions of its Coordinate Benches in similar cases, such as 'Rajendra Himmatrao Patil vs. ITO' and 'Sanjay Bajarang Todali and others'. The reasoning was that the compensation is for forced retirement under a revival plan and is akin to retrenchment compensation. The Tribunal also noted that the benefit of Section 10(10B) is applicable to all employees covered by such schemes, not restricted to 'workmen'. The impugned orders of the Ld. Addl./JCIT(A) were set aside. The assessees were directed to submit revised computations of income to their respective Jurisdictional Assessing Officers to claim the exemption under Section 10(10B), after which the revenue authorities would verify and grant any refund due. The common issue raised in the grounds of appeal was allowed.

What were the issues?

1. Whether compensation received under the BSNL VRS-2019 by ex-employees of BSNL is in the nature of retrenchment compensation and is a capital receipt fully exempt under Section 10(10B) of the Income Tax Act, 1961? Assessee's Contention: The compensation received under the BSNL VRS-2019 is a capital receipt and is fully exempt from tax under Section 10(10B) of the Act. The assessee relied on various decisions of the Co-ordinate Benches of the Tribunal, including 'Shraddha Pralhad Arote & Others vs. ITO', 'Meghmala Sudhir Pathak & Others vs. ITO', 'Sanjay Bajarang Todali & Ors vs. ITO', 'Ravindra Kumar Saxena & Anr', 'Raju Goral & Ors vs. ITO', 'Prakash Dhondiram Gavali vs. ITO', 'Tanaji Kedari Sapkar vs. ITO', and 'Avinash Arvind Kulkarni & Anr vs. ITO'. They also cited the decision in 'Harish Kumar vs. ITO' and 'Rajendra Himmatrao Patil vs. ITO'. The assessee argued that the benefit of Section 10(10B) is applicable to all employees covered by the scheme, not just 'workmen', citing 'Hindustan Photo Film Workers Welfare Centre vs. Govt. of India'. Revenue's Contention: The Ld. DR supported the order of the Ld. Addl./JCIT(A) but could not provide any contrary material to controvert the submissions of the Ld. AR.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 249(3)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER Sr ITA No.

Appellant Respondent Date of A.Y.

No order of the Addl / JCIT(A)s 1 3220/PUN/2026 Manojkumar Dattatray ITO, Ward 1206.2026 2020-21 Billade 2(1), Nashik C/o Padvekar Law Chambers, 408, Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400020 PAN: ACJPB2789A 2 3221/PUN/2026 -do- -do- 12.06.2026 2021-22 3 3222/PUN/2026 Dinkar Sopan Savairam ITO, Ward- 12.06.2026 2020-21 C/o Padvekar Law 2(1), Solapur Chambers, 408, Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400020 PAN: ADKPS2150G 4 3223/PUN/2026 -do- -do- 12.06.2026 2021-22 5 3224/PUN/2026 Dinkar Dnyandev ITO, Ward 15.06.2026 2021-22 Shipekar 1(1), C/o Padvekar Law Kolhapur Chambers, 408, Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400020 PAN: ACGPS3110F 6 3225/PUN/2026 Bhagoji Rajaram ITO, Circle 1, 22.06.2026 2020-21 Mangalekar Kolhapur C/o Padvekar Law Chambers, 408, Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400020 PAN: AAWPM3974H 7 3226/PUN/2026 -do- -do- 22.06.2026 2021-22 8 3237/PUN/2026 Sarjerao Nivrutti ITO, Ward-1, 22.06.2026 2020-21 Kumbhar Ichalkaranji C/o P

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