MAKARAND PRABHAKAR ABHYANKAR,MUMBAI vs. ITO, CIRCLE 1, KOLHAPUR

ITA 1497/PUN/2026Status: DisposedITAT Pune05 October 2026AY 2021-20226 pages
AI SummaryAllowed

What were the facts?

The assessee, Makarand Prabhakar Abhyankar, is an individual and a retired employee of DoT, subsequently absorbed in BSNL. For Assessment Year 2021-22, the assessee's return of income included Rs. 40,55,328/- received under the BSNL VRS-2019 scheme. This amount was inadvertently taxed. Upon learning from a union meeting that this compensation was exempt under Section 10(10B) of the Income Tax Act, 1961, the assessee filed a first appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal, noting it was filed belatedly and that no such claim was made in the original return, which had been processed by the CPC. The assessee is now appealing this dismissal to the ITAT.

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal. It respectfully followed a previous decision by a coordinate bench in ITA No. 1496/PUN/2026, which dealt with similar claims for AY 2020-21 for the assessee and other similarly situated employees. That decision, in turn, relied on the case of Prathibha Jagdish Unawane Vs. ITO. The Tribunal held that the compensation received by employees from BSNL under the Voluntary Retirement Scheme, 2019, is in the nature of retrenchment compensation and is exempt under Section 10(10B) of the Income Tax Act, 1961. The Ld. CIT(A)'s order was set aside. The assessee was directed to place a revised computation of income before the Jurisdictional Assessing Officer, who was instructed to re-compute the tax liability and grant any refund after verification. The Tribunal found force in the assessee's argument that a similar claim had already been allowed for the preceding assessment year.

What were the issues?

1. Whether the Ld. CIT(A) erred in holding that the assessee was making a new claim not made in the return of income, and whether appellate authorities have the power to grant lawful reliefs not originally claimed, considering CBDT Circular No. 14 (XL-35) of 1955 and judicial precedents. 2. Whether the Ld. CIT(A) erred in dismissing the appeal without adjudicating on merits, despite the assessee's case being covered by decisions in Harish Kumar v. ITO (ITA No. 42/Chd/2025) and Jayeshkumar Tulsidas Sutaria vs. Income-tax Officer ([2026] 183 taxmann.com 587 (Ahmedabad - Trib.)), which held compensation under BSNL VRS-2019 to be exempt under Section 10(10B). 3. Whether the Ld. CIT(A) failed to appreciate that the compensation received under the approved BSNL VRS-2019 scheme is eligible for exemption under Section 10(10B), considering judicial precedents like Harish Kumar v. ITO. 4. Whether the assessee is entitled to a refund of excess tax paid due to incorrect professional advice. Assessee's Contentions: The assessee argued that appellate authorities have wide powers to grant relief even if not claimed in the return, citing CBDT Circular No. 14 (XL-35) of 1955 and Supreme Court/High Court precedents. They contended that the BSNL VRS-2019 compensation is exempt under Section 10(10B) and that similar claims for AY 2020-21 were allowed by a coordinate bench. They relied on the decisions in Harish Kumar v. ITO and Jayeshkumar Tulsidas Sutaria vs. Income-tax Officer. Revenue's Contentions: The judgment does not record specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 143(1)

AI-generated summary — verify with the full judgment below

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

Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE

For Appellant: Shri Tanzil Padvekar (Virtual)
For Respondent: Ms. Bhavya I.V
Hearing: 21.07.2026Pronounced: 05.10.2026

PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 13.02.2026 passed by Ld. Addl./JCIT(A)-5, Chennai [‘Ld. CIT(A)’] for the assessment year 2021-22. 2. The appellant has raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in holding that the Appellant was making a new claim which was not made in the return of income, without

2 appreciating that the appellate authorities possess wide and plenary powers to grant lawful reliefs even if such claims were not made in the return of income. The Ld. CIT(A) failed to follow the b

The order continues below.

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