UMESH CHANDRA,BAREILLY vs. ITO-2(2), BAREILLY, BAREILLY

ITA 796/LKW/2026Status: DisposedITAT Lucknow25 September 2026AY 2021-225 pages
AI SummaryRemanded

What were the facts?

The assessee, Umesh Chandra, an employee of Bharat Sanchar Nigam Limited (BSNL), received Rs.36,82,971/- as compensation upon opting for Voluntary Retirement (VRS) for the assessment year 2021-22. In his return, he claimed this amount as exempt under Section 10(10C) of the Income Tax Act, 1961. The Centralized Processing Centre (CPC), Bangalore, processed the return under Section 143(1) and disallowed the exemption, citing Section 10(10B) instead. The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi, which dismissed the appeal in limine due to a delay in filing before the first appellate authority. The assessee then appealed to the ITAT.

What did the Tribunal hold?

The Tribunal, while noting that none appeared for the assessee and an adjournment application was rejected, decided to grant the assessee one more opportunity in the interest of substantial justice. The Tribunal restored the file to the NFAC, Guwahati, with directions to give the assessee an opportunity to explain the delay in filing the appeal. If deemed appropriate, the delay should be condoned, and the appeal admitted for hearing on merits. The assessee was cautioned to comply with the directions, failing which the NFAC could pass an ex-parte order. The Tribunal did not decide the merits of the exemption claim under Section 10(10B) or the procedural issue of dismissal in limine, as the matter was remanded for fresh adjudication.

What were the issues?

1. Whether the NFAC erred in dismissing the appeal in limine without adjudicating on merits, thereby violating principles of natural justice, as argued by the assessee. The revenue did not record any argument on this point. 2. Whether the NFAC and CPC erred in disallowing exemption under Section 10(10B) of the Act for Rs.36,82,971/- received as compensation under an approved BSNL VRS, as argued by the assessee. The assessee contended that the compensation was eligible for exemption under Section 10(10B) and that the initial claim under Section 10(10C] was an error due to lack of professional advice. The revenue relied on the orders of the authorities below and argued for dismissal of the appeal.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW

Before: SHRI. SUDHANSHU SRIVASTAVA

For Respondent: Shri Sudhakar Shukla, D.R

This appeal has been preferred by the Assessee against the order dated 08.05.2026, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2021-22. 2.0 The brief facts of the case are that the assessee was an employee of Bharat Sanchar Nigam Limited (BSNL). During the year under consideration, the assessee had opted for Voluntary Retirement (VRS) and under the scheme of the voluntary retirement, the assessee had received an amount of Rs.36,82,971/- as compensation. In the return of income filed by the assessee for the year under consideration on 03.01.2022, the assessee had claimed this amount of Rs.36,82,971/- as ITA No.796/LKW/2026 exempt under section 10(10C) of the Act. The Centralized Processing Cen

The order continues below.

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