RAGHAV KHIMJIBHAI SAVALIYA,RAJKOT vs. ACIT/JCIT (APPEALS), GURUGRAM, HARYANA

ITA 1041/RJT/2026Status: HeardITAT Rajkot01 October 2026AY 2021-226 pages
AI SummaryRemanded

What were the facts?

Ten appeals were filed by different assessees against orders passed by the National Faceless Appeal Centre (NFAC)/CIT(A), which arose from orders passed by the Assessing Officer under section 143(3) read with section 144B of the Income Tax Act, 1961. The assessees, employees of BSNL, received compensation under the BSNL Voluntary Retirement Scheme-2019, announced by the Department of Telecommunications. The assessees claimed this compensation was exempt from income tax under Section 10(10B) of the Act, being retrenchment compensation received from the Central Government under a scheme approved by it. The Assessing Officer rejected this claim and made additions to the income of the respective employees. The assessees' appeals before the CIT(A) were unsuccessful, leading to these appeals before the Tribunal.

What did the Tribunal hold?

The Tribunal noted that the assessees' appeals related to retrenchment compensation/retirement schemes of BSNL employees. It observed that the CIT(A) had dismissed the appeals without considering the BSNL Scheme approved by the Central Government. The Tribunal found this to be factually incorrect and a violation of the principle of natural justice, as the scheme was not examined in the right perspective. Therefore, the Tribunal granted the assessees another opportunity to plead their cases before the CIT(A). The orders of the CIT(A) were set aside, and the issues were remanded to the CIT(A) for fresh consideration. The assessees were given liberty to produce sufficient evidence to the satisfaction of the CIT(A). For statistical purposes, all appeals were allowed.

What were the issues?

1. Whether the compensation received by the assessees, employees of BSNL, under the BSNL Voluntary Retirement Scheme-2019, qualifies for exemption under Section 10(10B) of the Income Tax Act, 1961, as retrenchment compensation approved by the Central Government. Assessee's contention: The compensation received is for loss of employment, constituting a capital receipt and is fully exempted under Section 10(10B) of the Act. The CIT(A) erred by not examining the scheme framed by the Central Government for BSNL employees and misdirected himself in law and facts. The matter should be restored to the CIT(A) for examination of the scheme and adjudication. The assessee also relied on Section 10(10AA) for leave encashment and cited CBDT Notification No. 31/2023. Revenue's contention: The Revenue did not raise any objection to the matters being remitted back to the file of the CIT(A) for examination of the BSNL employee scheme framed by the Central Government and subsequent adjudication.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10AA),Section 143(3),Section 144B,Section 250

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Heard together (2 matters)

ITA No. 1072/RJT/2026
ITA No. 1114/RJT/2026

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय अिधकरण, राजकोट "यायपीठ, राजकोट । In The Income Tax Appellate Tribunal, “SMC” Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member आयकरअपीलसं/.ITA No. 1072/RJT/2026 "नधा"रणवष"/ Assessment Year: 2020-21 Bhimji Bhikhabhai Tukadiya ITO WD 2(3), PORBANDAR Deep City Near Gandhi Park, Income Tax Office, 2nd Storey, Vs. Yug Bajaj & Prashant Pan Kuber Landmark, Opp Sadhna Street, Porbandar, Studio, S.V.P. Road, Porbandar, Porbandar Gujarat 360575 Gujarat-360575 "थायीलेखासं /. जीआइआरसं /. PAN/GIR No.: AATPT2832Q (अपीलाथ"/Appellant) (""यथ"/Respondent) "नधा"रतीक"ओरसे/Assessee by : Shri Kumar Pandya, Ld.AR राज"वक"ओरसे/Revenue by : Shri Ganesh Iyer, Ld. Sr. DR

आयकरअपीलसं/.ITA No. 1114/RJT/2026 "नधा"रणवष"/ Assessment Year: 2021-22 Ramesh Mohanbhai Vara ITO WD 1, JND/ Gujarat-362015 Junagadh, Gujarat-362001 "थायीलेखासं /. जीआइआरसं /. PAN/GIR No.: ABEPV3767G (अपीलाथ"/Appellant) (""यथ"/Respondent)

आयकरअपीलसं/.ITA No. 1115 & 1116/RJT/2026 "नधा"रणवष"/ Assessment Year: 2020-21& 2021-22 Ajitkumar Navalshankar Pandya ITO WD

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