SUNITA JAIPRAKASH GAIDHANI,MUMBAI vs. ITO,WARD-2(1), NASHIK, NASHIK

ITA 3261/PUN/2026Status: DisposedITAT Pune23 September 2026AY 2020-202115 pages
AI SummaryAllowed

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Pune Bench, heard 29 appeals filed by various assessees against orders passed by the Additional/Joint CIT(A) (NFAC) for Assessment Years 2020-21 and 2021-22. The appeals challenged the denial of exemption for amounts received by employees of Bharat Sanchar Nigam Limited (BSNL) under the BSNL Voluntary Retirement Scheme (VRS), 2019. The assessees contended that these amounts were in the nature of retrenchment compensation and thus eligible for exemption under Section 10(10B) of the Income Tax Act, 1961. The Revenue argued that the payments were under a Voluntary Retirement Scheme and thus potentially covered by Section 10(10C). The ITAT had previously dealt with similar issues in the case of Prathibha Jagdish Unawane Vs. ITO.

What did the Tribunal hold?

The Tribunal held that the amounts received by the employees of BSNL under the Voluntary Retirement Scheme, 2019, were in the nature of retrenchment compensation and constituted a capital receipt exempt from tax under Section 10(10B) of the Income Tax Act, 1961. The Tribunal reasoned that this issue was squarely covered by its own previous decision in the case of Prathibha Jagdish Unawane Vs. ITO, as well as decisions from other coordinate benches and the ITAT Ahmedabad. The Tribunal emphasized that the substance of the transaction, rather than its form, determined its nature, and that payments made under such schemes, especially when employees are facing potential dislocation, should be viewed pragmatically as termination of employment with compensation. The impugned findings of the CIT(A) were set aside. The assessees were directed to submit revised computations of income to their respective Jurisdictional Assessing Officers, claiming exemption under Section 10(10B), and the Revenue authorities were to grant refunds after due verification. The common issue raised in the grounds of appeal was allowed.

What were the issues?

1. Whether the amount received by employees of BSNL on account of retirement under the BSNL Voluntary Retirement Scheme, 2019, is in the nature of retrenchment compensation and a capital receipt, eligible for exemption under Section 10(10B) of the Income Tax Act, 1961. Assessee's Contentions: The assessees argued that the amounts received under the BSNL VRS, 2019, constituted retrenchment compensation and were capital receipts, making them eligible for exemption under Section 10(10B) of the Act. They relied on previous decisions of the ITAT Pune Bench and other coordinate benches that had consistently held such payments to be exempt. They also pointed out that in some cases, the CIT(A) had condoned delays and allowed similar claims. Revenue's Contentions: The Revenue supported the orders of the CIT(A), arguing that the sums received were not retrenchment compensation but amounts received under a Voluntary Retirement Scheme, for which Section 10(10C) might be applicable. The Revenue did not present any contrary decisions from higher authorities.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 250

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE ‘SMC’ BENCH, PUNE

BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER Sl. ITA No. Assessee Respondent A.Y. No. 1-2 No.3261/PUN/2026 Sunita Jaiprakash ITO, 2020-21 No.3262/PUN/2026 Gaidhani, Ward—2(1), 2021-22 C/o. Padvekar Law Nashik Chambers, 408, Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400 020 Maharashtra PAN : ABBPG2003P 3-4 No.3263/PUN/2026 Ravindra Gopal ITO, 2020-21 No.3264/PUN/2026 Chandgadkar, Ward-1(1), 2021-22 C/o. Padvekar Law Kolhapur Chambers, 408, Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400 020 Maharashtra PAN : AIBPC8697C 5-6 No.3284/PUN/2026 Liladhar Ulhas ITO, 2020-21 No.3285/PUN/2026 Chaudhari, Ward-1(4), 2021-22 C/o. Padvekar Law Jalgaon Chambers, 408, Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400 020 Maharashtra PAN : AAJPC8330J 7-8 No.3286/PUN/2026 Laxmikant Dabral, ITO, 2020-21 No.3287/PUN/2026 C/o. Padvekar Law Ward-4, 2021-22 Chambers, 408, Panvel Maker Bhavan No.3, 21, New Marine Lines, Mumbai – 400 020 Maharashtra PAN : ABWPD6369C 9-10 No.3308/PUN/2026 Gajiram Bhaguji ITO, 2020-21 No.3309/PUN/2026 Palde, Ward—2(1), 2021-22 C/o. CA Aanup Ashok Nashik Laddha,

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 10(10B)

All 1,303 judgments and leading authorities on Section 10(10B) →

Recent GST High Court judgments

Search GST case law →